November 13, 2016
Direct from Orlando and the World Economic Conference (WEC) 2016
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Timing Revision of Waterfall event in Gold going below $1,000
I arrived at the WEC on Wednesday November the 9th. On Thursday, during the morning session Martin Armstrong (MA or Marty) said this:
“Gold is still in a downward trend and by January 2018, we can expect a Turning Point in Gold to take place”. Well I nearly fell of my chair because, as you all know I have been saying in previous FDNN letters that the Turning Point to the downside in Gold would occur before the end of the 1st Quarter of 2017.
So, when the Question period came, I asked this question: “Marty, my interpretation from reading you Blog was that the Turnaround in Gold would come before the end of the 1st Quarter of 2017 - - and not in 2018”?
Marty: “I also feel that the low might occur in the 1st Quarter of 2017 but, that will not be confirmed until the yearend numbers for Gold are in at the end of 2016.”
So, there you have it folks, directly from the creator of Socrates (SOC) and its ultimate interpreter Martin Armstrong.
Quotes from MA on GOLD at the November 10 to 14, 2016 WEC
“1) We are not in a Gold ‘Bubble Stage’ right now; 2) Investors worldwide need to be all in first; 3) I don’t believe Gold will go below the 1980 low of $875.00; 4) I expect that once Gold is going to $875 people will start to get bullish [and they will start to buy]; 5) I don’t see a dramatic low when we go below the $1,000 area - - maybe $100,00 or there abouts lower; 6) No matter what you do [he meant what the promoters do] you cannot cheer Gold up.”
Day Trading this Week
On Thursday evening at a Cocktail Party for Institutional attendees Martin Armstrong indicated to a major Fund Manager that he was very bearish on Silver and Gold for Friday the 11th of November. I know that that Fund Manager who has offices worldwide did very, very well indeed on Friday. They went Short and bought back before the Market close, for a fantastic profit.
I expect to get a heads-up from Marty today at the WEC to benefit the Day Trading efforts this coming week for myself and those investors who have given me ‘Trading Authority’ in their respective accounts.
I am always hesitant when I am being asked what investments I have in my Investment Portfolio by investors who look to mimic my Portfolio. I reply by first asking “How old are you, are you retired, where do you live, what are your objectives” and so on.
I need to know what the investor’s status is and what his objectives are before I can answer the posed question. All investors have or require different objectives and thus have different Asset Allocations.
Although, I am 79 years old, my objective is totally aggressive but, very wrong for most people my age and thus, I am not the appropriate role model for advanced aged investors the reason being that: 1) I don’t want to retire because, I just enjoy the challenge of the chase; and 2) I just enjoy making big money.
So, let’s talk about Asset Allocation:
Martin Armstrong has a comprehensive 33 page Asset Allocation Report titled “Surviving the Future” and “What Lies Ahead”. If that Report becomes available for purchase then I suggest you buy it.
“When it comes to strategic asset allocation, we must keep in mind that the typical model is predicated upon the idea that one cannot forecast the future.
Of course, when deflation rears its head, all bets are off as losses typically mount when the purchasing power of cash rises and asset classes fall in currency terms.
Can value investing hold water in the face of negative rates and deflation? This too is a vital question that must be addressed.
Establishing an appropriate asset mix is a dynamic process, and it plays a key role in determining your portfolio's overall risk and return. The [SOC] ‘Reversal System’ defines key points that mark the lines where asset allocation would need altering. Employing our ‘Reversal System’ will help tremendously to avoid catastrophic losses as best as possible.
When looking at the asset allocation approach, the object is to effectively capture the majority of the trend, not to participate in every single move, which is trading rather than investment. Typically, the less one trades normally, the greater the profit. We can see by taking this distant approach that the numbers are always predefined. You are either long or short in a given asset class. In contrast, the 30‐year chart demonstrates aggressive speculation. This is adding positions with every reversal elected, and as such, you can accumulate a large position. However, this is not an approach that would be advisable for asset allocation, for this requires a lot more attention. These examples are only trading on a monthly basis and do not reflect day trading.
Your portfolio's asset mix should reflect your goals at any point in time. If you are a long term passive investor then reassess your strategy perhaps only yearly.
We need to forever weigh and revise our Asset Allocation for Stocks, Bonds, Real Estate and Cash (stay away from Government Bonds they are too risky and I don’t trust governments).
The best advice: get rid of public debt and stay with blue‐chip corporate debt - nothing public.
Asset allocation is entirely predicated upon your currency base. Many people get the asset correct, but then lose money on the currency even if hedged.
We will be changing this asset allocation come January 2017. It does appear we are reaching a focal point where the trends may begin to shift. The point at which the current asset allocation should be reduced would be a monthly closing on the Dow Jones Industrial Index beneath 17331. A September closing below 17063 would warrant reducing stock allocation to 10% and shifting to cash.
Next year 2017 will be an important year for a Directional Change. Therefore, we must pay attention to the year‐end closing for 2016, for certainly a closing below 10365 will signal a drop into 2017 that may lead to a 2018 low. We need a closing above the 2015 high of 12109 to imply a rally back to the 13300 level, which appears rather difficult. Nevertheless, keep in mind that this is all about public confidence.
Therefore, we have key currencies to consider, US dollar, Canadian dollar, pound, and Swiss franc. Many people get the asset correct, but then lose money on the currency even if hedged. Next, we must take into consideration how the sector fits within the trend (deflation or inflation). Third, we must introduce time. Therefore, we have to get all three correct to outperform the average. Our dollar denominated asset allocation has not really changed since 2011. That was the peak in gold and the breakout to the upside in equities.
Our basic asset allocation mix can be an active process to varying degrees or strictly passive in nature.
This overview provides only a general guideline on how investors may use asset allocation as a part of their core strategies.
If you do not have the time and trading skill, then you should step back and take longer‐term approach by using the monthly Reversal System. Pay attention to the monthly reversals in the Dow and gold for example. These will signal if it is time to flip the asset allocation until 2017.”
Erwin Pletsch presenting at the WEC yesterday morning:
“You must get the currency allocation mix correct before embarking on asset allocation. That is, If the currency mix is wrong no degree of asset management will overcome a collapsing currency”.
Excellent advice indeed.
No Points to Ponder this Week
Because, I have to go downstairs to be in time for the Martin Armstrong presentation this morning, I will skip my Points to Ponder for this week. Today, I am sure Marty will dazzle us with the latest version of the SOC generated Trader Level 2.0.
I also expect that he will give us some advanced heads-up on Gold, Silver, the Dow, the S&P and Forex to benefit our Paid-for subscribers for the week of November 14.
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