Slope Of Hope with Tim Knight

Mainstream Media's Priorities

Apple at $1000/share? Oh, at LEAST!

Most of you have probably already seen the bullgasm happening over at Barron's. Here's their cover for the week:

Mass Media Mantra: "Stocks are Cheap!"

In this lifetime, 99.5% of the people talking about equities have a vested interest in assets being bid higher. Being bullish is just what everyone does. It's the realm of normal. The bastion of the masses.

Usually it works. But just keep in mind that all the articles you are seeing about how cheap stocks are is hardly an - - umm - - objective viewpoint.

Just try to find the mass media warning you about how overpriced stocks were in early 2000 or mid-2007. That's a dry hole. And, to that point, I offer the value-priced CRM:

Excursus on Willy Wonka and the Chocolate Factory

I tend to have strong feelings about things. There's not a lot of grey in my world. Things are very black or very white.

One of the many areas in which this is true is the movie Willie Wonka and the Chocolate Factory. This has been a favorite of mine for my entire life. I take great umbrage at the fact that Johnny Depp created a new version of this story - with the notable exception of one cool song. I am loyal to the 1971 version to the bitter end (sort of like how I think the Alastair Sims version of Christmas Carol is the only one worth watching).

Marc Top-Ticks the Market. Bubble? Nawwwwww........

From the New York Times a month ago. The guy looks like a bit of a pinhead in retrospect.

Hel-looooo Contrarian Trade.....

Getting Cramered - What a Downer! (by Goatmug)

Have you ever been in on a really hot fad like owning OP shorts, parachute pants, or even a wearer of those cool yellow Lance Armstrong wrist bracelets when you are shocked to learn that the biggest loser or dork is wearing them too?  Suddenly the trinket or item isn't so cool huh?  Remember that feeling, cause that is how I felt when I saw this video from Business Insider featuring one of the most famous investors that have a knack for making terrible calls at the worst of times.  (Bear Stearns anyone?).

Jim basically says that silver is hot and the demand for silver is insane and his comments are a real downer.
http://www.nbc.com/saturday-night-live/video/debbie-downer/32806

WARNING #1
I would agree with Jim as I noticed this week that the markup over spot for Silver American Eagles at one of the lowest mark up dealers (that I've bought a lot from) is now at $3.60 per ounce over spot!  This actually changed from just one week ago when they were  at $2.60 over spot.  (mind you I'm talking purchases of more than 500 ounces at a time for this price).    I thought it odd on their website because they said they would not sell Silver Eagles because they felt that the mark up was too high.  I guess they felt the pressure.  So, if there is this kind of pressure to buy at any price, we know that we should probably be looking for an exit.  These kind of manias can go on longer than we think, but this is a BIG WARNING that people are buying at any cost. 

So, we have warning #1 - we see dealers marking up the cost to buy AND there is still a crazy demand (say bubble with me).

WARNING #2
As I mentioned earlier today in the post about Fed Governor's comments about inflation, copper is looking sick and it will take down the rest of the commodities complex with it.  Silver and gold will not be immune to a copper crash.  Please review the post on inflation and Bullard's comments at MINISTRY OF DISINFORMATION - BULLARD SPEAKS.

WARNING #3 - (AND PROBABLY THE SCARIEST OF THEM ALL)
Jim Cramer is actively commenting and favorable on a position in physical silver.  This should cause you to call your precious metal dealer and arrange for UPS delivery to them right now.

There may be room to run on silver, but most of all, it seems to be getting a bit crowded.  BE CAREFUL!

GOATMUG

 www.goatmug.blogspot.com

Perhaps There's Hope Now

Well, I never thought I'd see this day..........I offer the following from today's New York Times:

The last time they featured Prechter, back in July, he was calling for an incredible collapse. It turns out - - agonizingly, painfully, and horribly from my point of view - - last July was in fact a fantastic time to buy every stinking stock in sight.

Perhaps the fact that he's saying he was wrong........which, seriously, I don't think I've ever heard from Gainesville.........is a good sign. As for being prudent: prudent don't pay the bills. EWI's warnings over a year ago that silver was about to plunge compelled me to sell my 1000 oz. brick at $9/ounce. I'd rather have been imprudent and own it today at $31.

Everything is Just Super!

Holiday Patterns (by Springheel Jack)

It's been very boring watching the market grind steadily higher this week, and I'm wondering now whether we'll see any correction next week. We're overdue a visit to the SPX daily 20SMA and I'm expecting to see a return to that soon, but quite a number of significant milestones were passed this week, and I'm wondering now whether we'll see 1280 before correcting. I've marked up the current rising wedge on the daily SPX, and also the main SPX rising channel since March 2009, onto my daily 20SMA chart to give a good idea of exactly where SPX is now within that bigger picture:

On the much smaller picture ES has broken down into the lower half of the recent rising channel. I'm expecting to see a return to the bottom of the channel today and will be watching that for a break. If we see a break down that should signal a deeper correction next week:

The Vix has been signalling an imminent correction all week and is still signalling that imminent correction. The key support trendline was hit on Friday and then again yesterday. Here it is on the weekly chart:

I've been having a careful look at USD today and on the EURUSD chart we have been consolidating sideways all month within the main declining channel. The blue support trendline on the EURUSD chart is being tested as I write and a break of that should signal that a more aggressive wave down is starting. That would have a very good chance of carrying equities down some way with it:

GBPUSD looks somewhat different, but is also in a declining channel from the early November high. A falling wedge has formed which may limit further downside. I have two alternative lower trendlines for the wedge but an upside breakout through the upper trendline would look very bullish and would signal an earlier than expected reversal:

I posted triangles on silver and gold earlier in the week and silver is still in that triangle though gold has broken down within a falling wedge. I'm looking for a break down on both and a break up would look very bullish both for for them and also for equities. Here's the triangle on silver:

One thing that has made me much less confident about an imminent correction on equities is watching the very strong action on financials. XLF blew straight through my 15.9 target yesterday and my next target is in the 16.3 area. If it makes it there then I'd be seeing a move to rising wedge resistance in the 1280 SPX area as likely. We'll see what happens today.

This is my last daily post before Christmas so everybody have a great Christmas, and for the non-christians, have a great holiday. :-)