Jim Cramer is Confused About Nascent Market/Dollar Congruence - Here's the Answer

Jim Cramer, my former colleague at another financial publisher and who I respect, said on his TV show Tuesday night that “he had no answer” for why the stock market was now rising alongside U.S. dollar appreciation. Well, I have that answer. It’s all about an important change in the economy. For the whole story see Jim Cramer has a Question - I have the Answer.

Security Sector	05-23-16 to 05-25-16 Close to Close
SPDR S&P 500 (NYSE: SPY)	+2.0%
SPDR Dow Jones (NYSE: DIA)	+2.0%
PowerShares QQQ (Nasdaq: QQQ)	+2.7%
iShares Russell 2000 (NYSE: IWM)	+2.7%
Vanguard Total Stock Market (NYSE: VTI)	+2.1%
Financial Select Sector SPDR (NYSE: XLF)	+2.6%
Technology Select Sector SPDR (Nasdaq: XLK)	+2.6%
Energy Select Sector SPDR (NYSE: XLE)	+2.1%
Health Care Select Sector SPDR (NYSE: XLV)	+2.1%
Consumer Discretionary Select Sector SPDR (NYSE:  XLY)	+1.8%
Consumer Staples Select Sector SPDR (NYSE: XLP)	+1.0%
Utilities Select Sector SPDR (NYSE: XLU)	+0.7%
Materials Select Sector SPDR (NYSE: XLB)	+1.9%
Industrial Select Sector SPDR (NYSE: XLI)	+1.7%
iPath S&P 500 VIX ST Futures (NYSE: VXX)	-6.1%
SPDR Gold Trust (NYSE: GLD)	-2.0%
United States Oil (NYSE: USO)	+3.2%
PowerShares DB US Dollar Bullish (NYSE: UUP)	Unchanged

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Article should interest investors in SPDR Dow Jones Industrial Average (NYSE: DIA), SPDR S&P 500 (NYSE: SPY), PowerShares QQQ Trust (Nasdaq: QQQ), ProShares Short Dow 30 (NYSE: DOG), ProShares Ultra Short S&P 500 (NYSE: SDS), ProShares Ultra QQQ (NYSE: QLD), NYSE Euronext (NYSE: NYX), The NASDAQ OMX Group (Nasdaq: NDAQ), Intercontinental Exchange (NYSE: ICE), E*Trade Financial (Nasdaq: ETFC), Charles Schwab (Nasdaq: SCHW), Asset Acceptance Capital (Nasdaq: AACC), Affiliated Managers (NYSE: AMG), Ameriprise Financial (NYSE: AMP), TD Ameritrade (Nasdaq: AMTD), BGC Partners (Nasdaq: BGCP), Bank of New York Mellon (NYSE: BK), BlackRock (NYSE: BLK), CIT Group (NYSE: CIT), Calamos Asset Management (Nasdaq: CLMS), CME Group (NYSE: CME), Cohn & Steers (NYSE: CNS), Cowen Group (Nasdaq: COWN), Diamond Hill Investment (Nasdaq: DHIL), Dollar Financial (Nasdaq: DLLR), Duff & Phelps (Nasdaq: DUF), Encore Capital (Nasdaq: ECPG), Edelman Financial (Nasdaq: EF), Equifax (NYSE: EFX), Epoch (Nasdaq: EPHC), Evercore Partners (NYSE: EVR), EXCorp. (Nasdaq: EZPW), FBR Capital Markets (Nasdaq: FBCM), First Cash Financial (Nasdaq: FCFS), Federated Investors (NYSE: FII), First Marblehead (NYSE: FMD), Fidelity National Financial (NYSE: FNF), Financial Engines (Nasdaq: FNGN), FXCM (Nasdaq: FXCM), Gamco Investors (NYSE: GBL), GAIN Capital (Nasdaq: GCAP), Green Dot (Nasdaq: GDOT), GFI Group (Nasdaq: GFIG), Greenhill (NYSE: GHL), Gleacher (Nasdaq: GLCH), Goldman Sachs (NYSE: GS), Interactive Brokers (Nasdaq: IBKR), INTL FCStone (Nasdaq: INTL), Intersections (Nasdaq: INTX), Investment Technology (NYSE: ITG), Invesco (NYSE: IVZ), Jefferies (NYSE: JEF), JMP Group (NYSE: JMP), Janus Capital (NYSE: JNS), KBW (NYSE: KBW), Knight Capital (NYSE: KCG), Lazard (NYSE: LAZ), Legg Mason (NYSE: LM), LPL Investment (Nasdaq: LPLA), Ladenburg Thalmann (AMEX: LTS), Mastercard (NYSE: MA), Moody’s (NYSE: MCO), MF Global (NYSE: MF), Moneygram (NYSE: MGI), MarketAxess (Nasdaq: MKTX), Marlin Business Services (Nasdaq: MRLN), Morgan Stanley (NYSE: MS), MSCI (Nasdaq: MSCI), MGIC Investment (NYSE: MTG), NewStar Financial (Nasdaq: NEWS), National Financial Partners (NYSE: NFP), Nelnet (NYSE: NNI), Northern Trust (Nasdaq: NTRS), NetSpend (Nasdaq: NTSP), Ocwen Financial (NYSE: OCN), Oppenheimer (NYSE: OPY), optionsXpress (Nasdaq: OXPS), PICO (Nasdaq: PICO), Piper Jaffray (NYSE: PJC), PMI Group (NYSE: PMI), Penson Worldwide (Nasdaq: PNSN), Portfolio Recovery (Nasdaq: PRAA), Raymond James (NYSE: RJF), SEI Investments (Nasdaq: SEIC), Stifel Financial (NYSE: SF), Safeguard Scientifics (NYSE: SFE), State Street (NYSE: STT), SWS (NYSE: SWS), T. Rowe Price (Nasdaq: TROW), Visa (NYSE: V) and Virtus Investment Partners (Nasdaq: VRTS).

Why Gold is Not Gaining on Greece

Gold investors may be dumbfounded this Monday morning by the inaction of the precious metal. The Greeks voted “no” over the weekend and stocks opened to turmoil on Monday. Uncertainty around the Greece issue has never been more prominent, and yet the SPDR Gold Trust (NYSE: GLD), which tracks the spot price of the metal, was relatively unchanged in the early AM on Monday. The reason is simple, the dollar factor still outweighs the safe haven factor for gold, and so as the dollar gained this morning, the upside for gold was stymied. Thus, it does appear the Greek Gods show no favor to gold. See the report on Greece & gold here.

Precious Metals Relative Security	Monday at Noon
SPDR Gold Trust (NYSE: GLD)	+0.2%
iShares Silver Trust (NYSE: SLV)	+0.5%
Market Vectors Gold Miners (NYSE: GDX)	+1.4%
Market Vectors Junior Gold Miners (NYSE: GDXJ)	+0.1%
Direxion Daily Gold Miners Bullish 3X (NYSE: NUGT)	+3.9%
Randgold Resources (Nasdaq: GOLD)	+0.9%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Euro Manipulation – I Feel So Dirty

The euro made a dramatic reversal that seemed to make very little sense Monday, and so I feel kind of dirty. The euro was down dramatically 1.9% versus the U.S. dollar in overnight overseas trading on obvious Greece concerns. Yet, by afternoon trading in the U.S., it was sharply higher versus the dollar. It was unnatural and had a lot to do with the actions of the European central banks plus a strangely timed news bit about Puerto Rico. I feel like my money has been touched inappropriately. See my report on euro manipulation. Article interests CurrencyShares Euro (NYSE: FXE), PowerShares DB US Dollar Bullish (NYSE: UUP), PowerShares DB US Dollar Bearish (NYSE: UDN), ProShares Ultra Short Euro (NYSE: EUO).

Disclosure: I'm long EUO and short UUP as a hedge and play on volatility. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Dollar Dazed but NOT Knocked Out

The dollar was dazed recently, knocked down by economic data from Europe. Then it got a second kick in the head last Wednesday when rumors of a more conciliatory EU drove speculation for an impending deal with Greece. The move might have some traders confused given that Greece recently seemed headed toward panic; you might have expected the euro to be expressing as much. I think aggressive investors can look past the last couple days’ action and for a dollar rebound near-term. I suspect Greece will not take the first offer while stubbornly holding to demands. Meanwhile, U.S. economic data due Friday might revive concern about the Fed and its rate hike plans. Over the longer term, I do expect the dollar to drift lower, but not until after another push upward. See my report on the dollar here. Article interests Global X FTSE Greece 20 (NYSE: GREK), SPDR S&P 500 (NYSE: SPY), PowerShares DB US Dollar Bullish (NYSE: UUP), PowerShares DB US Dollar Bearish (NYSE: UDN) and iShares Euro ETF (NYSE: EURS).

DISCLOSURE: Kaminis is long UUP. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Dollar Resurgence – How to Capture Greenback Gains

The dollar's resurgence of the past week has momentum and is built on substance. Since marking a recent bottom in mid-May, the dollar index spot exchange rate has increased over 4% into May 26 trading. I believe the move was ignited by renewed concern about the euro due to an intensification of concern about Greece. It has been supported by other recent events about the dollar and euro, but it is the Greece issue that I believe gives the move substance and momentum. If you agree, you might use the PowerShares DB US Dollar Bullish ETF (NYSE: UUP) to hedge against any relative risk or to capture the activity, and/or derivatives of the UUP to speculatively capitalize on the move. See the report on the dollar.

Disclosure: Kaminis is long UUP. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Gold vs. Dollar – Guess Which is Today's Favored Geopolitical Capital Flight Destination

As capital makes its flight to safety over the geopolitical scare in Yemen, it has its usual two favorite destinations to choose from. Capital tends to favor U.S. treasuries over gold at times like these, but given the richness of the dollar, gold may gain greater favor this time around. See my full report on gold vs. the dollar in a capital flight to safety. 

Precious Metals & Dollar Relative Securities	03-26-15
SPDR Gold Trust (NYSE: GLD)	+0.6%
PowerShares DB US Dollar Bull (NYSE: UUP)	+0.4%
iShares Silver Trust (NYSE: SLV)	+0.4%

DISCLOSURE: Kaminis is short UUP. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Gold is Now Impervious to Dollar Pain!

Gold exhibited important strength against a dollar headwind last week that I believe implies the precious metal sits on solid ground here and faces little downside risk. Thursday’s impressive performance against dollar strength says to me that it might be impervious to dollar pain at this level. With my expectation that the dollar should top out soon, I think gold investors can make base camp here and wait for upside catalyst; in other words buy. See my full report on gold and the dollar here.

Security	02-26-15	YTD	TTM
PowerShares DB US Dollar Bullish (NYSE: UUP)	+1.0%	+4.1%	+16.8%
SPDR Gold Trust (NYSE: GLD)	+0.3%	+1.7%	-9.4%
Market Vectors Gold Miners (NYSE: GDX)	+0.8%	+13.1%	-19.7%
Market Vector Junior Gold Miners (NYSE: GDXJ)	+0.8%	+9.4%	-36.0%
iShares Silver Trust (NYSE: SLV)	+0.1%	+5.1%	-22.5%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Short the Dollar – Sell the UUP

Traders with long bets on the PowerShares DB US Dollar Bullish (NYSE: UUP) have enjoyed a great run this year. However, I believe longs should now close the trade and consider shorting the security, as I have, or take a long interest in the security’s inverse pairing, the PowerShares DB US Dollar Bearish (NYSE: UDN). The dollar index was giving way again in overnight trading after dropping in Thursday’s trade. It’s a move I’ve been waiting on for a short while now. My reasoning has been that the Greece euro-zone concern has been overblown, and that as that became apparent to the market, the euro would recover some ground against the dollar. Peace in Ukraine, however fragile, is just a bonus I had not planned on but supports the play. Go short UUP here; I have done so using March at-the-money and June out-of-the money puts. See our report on short the dollar here.

DISCLOSURE: Kaminis is short the UUP ETF. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

The Dollar Drive is Done – Buy the UDN

The dollar move of the last forever or so is ending now in my opinion, so I’m suggesting investors move into securities like the PowerShares DB US Dollar Bearish ETN (NYSE: UDN) immediately. You might also buy puts in the PowerShares DB US Dollar Bullish ETN (NYSE: UUP), or look to the commodities that will benefit from a weaker dollar, like energy and other areas, using securities like the United States Oil (NYSE: USO) or the SPDR Gold Trust (NYSE: GLD), which will lag energy due to capital flows from precious metals now flooding into energy. See my full report on the dollar here.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

The 1 Factor Driving Markets Right Now

This rally is clearly being driven by the apparently now lower likelihood that Greece will leave the euro-zone, and the dollar is depreciating, which is the catalyst for heavily beaten energy stocks. Capital flows to and fro are importantly driving sector flows as smart money seeks to advantage from the opportunity. See my important stock market report here.

DISCLOSURES: Kaminis is long AAPL and FB. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Russia’s War on the Dollar Serves Gold

Russia’s incursion into Ukraine caused a rift between Russia and the U.S. & Europe. It led the West to issue sanctions against Russia and to threaten to apply deeper cutting actions. Russia recognizes the damage the West can do to its economy today, and so our former cold war foe has begun to take action to protect itself. Its actions include the acquisition of gold reserves replacing U.S. Treasuries, and also the use of other than dollar currencies in its and its businesses’ trade settlements. Russian actions may work against the euro and the U.S. dollar, but they should serve gold; because the shiny metal will always be the one currency that has credibility globally, even when the world is not at peace. Thus, despite concerns I’ve expressed recently regarding a capital flow weight against gold and relative securities, this Russian reality offers a solidifying new support against that for gold and the SPDR Gold Trust (NYSE: GLD). See the full version of this report published at Seeking Alpha and titled Russia’s War Against the Dollar will Support Gold Long-Term.

Precious Metal Relative Securities	YTD	TTM
SPDR Gold Trust (NYSE: GLD)	+4.5%	-9.4%
iShares Silver Trust (NYSE: SLV)	-1.3%	-12.8%
Market Vectors Gold Miners (NYSE: GDX)	+9.0%	-20.8%
Direxion Daily Gold Miners Bull 3X Shares (NYSE: NUGT)	+13.5%	-70.6%
Sprott Physical Gold Trust (NYSE: PHYS)	+4.8%	-9.5%

Buy Oil Here

Oil prices took a nosedive since the start of May on concern regarding global economic growth. The demand side of the equation has thus been penalized just as reserve supplies of domestic resources (mostly natural gas) have also been on the increase. So, suddenly petroleum prices turned on a determined path of decline. The United States Oil (NYSE: USO) and the iPath S&P GSCI Crude Oil TR Index ETN (NYSE: OIL) are off roughly 20% each since their May 1st cliff’s edge. However, I warn, the same factors that took oil and its distillates higher before the latest slide have not subsided and will again soon spur oil and gasoline prices higher once more. Thus, investors may benefit from dollar cost averaging petroleum relative buys from this point. The shares of Exxon Mobil (NYSE: XOM) and ConocoPhillips (NYSE: COP) are each up sharply today after following the downdraft of oil prices since the start of May, but the ground they might retrace is vast.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

The Oil Price Blame Game

President Obama recently raised the issue about speculators’ possibly playing a role in driving unwarranted price change in commodities, namely in oil prices. It’s a popular topic these near-election days, as petroleum distillate prices reach into the pocketbook of most voting Americans. Namely, gasoline prices have been bothering Americans most, and according to many polls, our countrymen believe the President and Congress can do something about the price of gas. A low hanging fruit, the GOP has of course highlighted the issue as a cause of concern about President Obama and his prioritizing of the environment (they say irrelevantly) over energy, pointing to debate about the Keystone Pipeline. So, it would seem, the President struck back, targeting that mysterious factor which is hard to pinpoint and a favorite pincushion of the 99% of late - Wall Street.

The same thing happened in Europe when economic lies, excessive debt, corruption and inept governing drove European Union member Greece into catastrophe. The mob of course blamed Wall Street first, namely Goldman Sachs (NYSE: GS), for misleading the soft-hearted sheep leading the country, many of whom were stealing away millions in misappropriated funds, into financial catastrophe. However, as every MBA should know, the market is efficient over the long-term and no unwarranted mispricing can thus last long enough to factor. Still, the vague discussion that will ensue in the coffee shops of Greenwich Village and diners across the heart of the nation will place the blame squarely on the usual suspect, that greedy group of traders and hedge fund honchos on Wall Street.

I think the President is playing unfairly here for political purposes, and it’s just not right. He said he’s going to push to increase regulatory might to stop manipulation. There’s nothing wrong with stopping crooked activity, but this begs to question: Who has gone to jail for rating mortgage backed securities triple-A credits deep into the real estate downturn? Why is the rating model employed by Standard & Poor’s (NYSE: MHP) and Moody’s (NYSE: MCO), where the issuer pays for his rating, still the standard or even in existence? Imagine if a company’s stock were rated “strong buy,” and you owned it into an abysmal loss, and then later found out that it had paid the firm that rated it a service fee? Do you think that’s Kosher? So why is our government finding religion on one issue and losing its faith on a critical one? It’s because of votes and tax revenue of course; I’ll get into this one later.

The President’s pointing to gasoline price gamers forces free market defenders into action. The factors of the price of any security are never singular, and always grammatically in conflict, because there are always many. In this case, let’s start with the most obvious.

What led the latest surge in petroleum prices has been the intensification of the geopolitical concern about Iran, its nuclear program, the West’s issue with it, and the sanctioning effort to stop it. Iran represents an important source of a critical global commodity, and it also could threaten the global distribution of petroleum through the disruption of its flow at the Strait of Hormuz.

This issue, and also the possibility of secret agreements around the issue that have possibly tied many groups and perhaps even some nations (the obvious are Venezuela, Syria, Hezbollah, Hamas; others are too dreadful to discuss) into strategic or military alliance, are of significance. Up until recently, and for some for just a short while longer, Iran represented an important petroleum source. We are talking about the likes of Greece and India, where disruption could have dramatic consequences. Where China really stands on this issue is likely to become better understood as the horrible effects of any disruption play out. In other words, I worry about, and obviously the petroleum market is bothered by, global economic consequences to the engagement of Iran. While that might lessen demand, severe disruption of the important fuel resource would clearly drive prices much higher. So, it would seem that mindful investors, often known as smart money, have also been aware and investing in line with what the President seems to blame speculation for.

Dilution of Fiat Currency
Blame should also fall partly on the Federal Reserve, which while diluting the value of the dollar, lifts the prices of the commodities it is used to value. Sustained low interest rates and quantitative easing serve an expansionary economic purpose. However, the result, in isolation, is also a depreciated currency against commodities like oil and gold. I say in isolation because nascent weakness in the euro and the yen has acted as counterbalancing weight in favor of the dollar.

But what will happen when those counterweights are lifted away or when the dollar pays for the day’s needs? Suddenly the dollar will drop like a rock, spurring hyperinflation and lifting the price of commodities beyond their recent highs. Even if the counterweights are not lifted, the continued dilution of fiat currency value will work against us. As Europe ties itself even closer together, its euro will be more burdened as its economies contract a contagious illness. As economic growth is stymied by misguided and mistimed austerity, even currently manageable debt becomes troubling. Thus, fiat currency globally could become contaminated, lifting the prices of goods, starting with commodities.

Add Oil Here
Any way this plays out, and whichever factor takes the lead, the price of oil will rise again without any defusing action to stop it. Political hijacking of the issue only serves to further cloud the view of the truly dangerous factors causing it. Those real driving factors must be mitigated, before risk is realized. Since I’m near certain they will not be, look for this latest oil price break to prove temporary.

Article interests energy investors including Exxon Mobil (NYSE: XOM), BP (NYSE: BP), PetroChina (NYSE: PTR), Petrobras (NYSE: PZE), Royal Dutch Shell (OTC: RYDAF.PK), Total (NYSE: TOT), Chevron (NYSE: CVX), Repsol (OTC: REPYY.PK), ConocoPhillips (NYSE: COP), Eni SpA (NYSE: E), Sasol (NYSE: SSL), Encana (NYSE: ECA), Suncor (NYSE: SU), Imperial Oil (AMEX: IMO), Statoil (NYSE: STO), Cenovus (NYSE: CVE), Transocean (NYSE: RIG), Penn West Petroleum (NYSE: PWE), Continental Resources (NYSE: CLR), Noble (NYSE: NE), Concho (NYSE: CXO), Diamond Offshore (NYSE: DO), Ensco (NYSE: ESV), Whiting Petroleum (NYSE: WLL), Nabors (NYSE: NBR), Pride International (NYSE: PDE), Helmerich & Payne (NYSE: HP), QEP Resources (NYSE: QEP), Enerplus (NYSE: ERF), Rowan (NYSE: RDC), Cobalt (NYSE: CIE), Patterson UTI (Nasdaq: PTEN), SandRidge (NYSE: SD), Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL), National Oilwell Varco (NYSE: NOV), Baker Hughes (NYSE: BHI), Weatherford International (NYSE: WFT), Cameron (NYSE: CAM), FMC Tech (NYSE: FTI), Oil States International (NYSE: OIS), Superior Energy (NYSE: SPN), Carbo Ceramics (NYSE: CRR), Helix Energy (NYSE: HLX), Pioneer (NYSE: PXD), CNOOC (NYSE: CEO), China Petroleum and Chemical (NYSE: SNP), Ecopetrol (NYSE: EC), Canadian Natural Resources (NYSE: CNQ), Apache (NYSE: APA), Anadarko (NYSE: APC), Devon (NYSE: DVN), EOG (NYSE: EOG), Chesapeake (NYSE: CHK).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Buy Gold on the Fed Fiddling

Stocks are down and gold is lower on the latest Federal Reserve FOMC Meeting Minutes. The skinny is that the Fed sounded less dovish, and might be less accommodative in the future. It’s counter intuitive, because the Fed would only be less giving if the economy were solidifying. Nevertheless, stocks are lower because there could be less support from the Fed, and the market is not sure the notoriously faulty forecasters are on target. Gold is dropping, because of two reasons. If the Fed is less free with dollars, then the currency should strengthen; and if the economy is improving, than riskier assets should do better. Here’s why I suggest ignoring the Fed fiddling, and buying gold on the dip.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative tickers include: NYSE: GG, NYSE: AEM, AMEX: ANV, NYSE: AU, NYSE: AUQ, AMEX: AZK, NYSE: ABX, AMEX: BRD, Nasdaq: CTHR, AMEX: CGR, OTC: CGCO.PK, NYSE: BVN, Nasdaq: DROOY, NYSE: EGO, AMEX: EGI, AMEX: XRA, NYSE: GFI, AMEX: GRZ, Nasdaq: GORO, OTC: MYNG.PK, AMEX: GSS, AMEX: GBG, NYSE: HMY, NYSE: IAG, AMEX: THM, NYSE: JAG, AMEX: KGN, AMEX: KBX, Nasdaq: KGJI, NYSE: KGC, AMEX: MDW, AMEX: MGH, AMEX: NSU, OTC: NJMC.PK, NYSE: NEM, OTC: NBRI.OB, AMEX: NXG, AMEX: NG, AMEX: RIC, Nasdaq: RGLD, AMEX: RBY, AMEX: SA, AMEX: XPL, AMEX: TRE, OTC: THMG.OB, NYSE: UXG, AMEX: VGZ, OTC: WITM.PK, NYSE: AUY, NYSE: CDE, NYSE: EXK, NYSE: HL, AMEX: MVG, AMEX: MGN, Nasdaq: SSRI, NYSE: SLW, NYSEArca: GLD, NYSEArca: GDX, NYSEArca: SLV, NYSEArca: AGQ, NYSEArca: ZSL, AMEX: GPL, NYSE: SVM, AMEX: PZG, Nasdaq: PAAS, NYSE: AG.

Buy Gold

The Federal Reserve’s Federal Open Market Committee (FOMC) published its meeting minutes for its March 13 meeting Tuesday afternoon. You can go ahead and read it, but all you need to know is that stocks are lower because of it. The focus of this article, though, is on gold not stocks.

As suggested in the introduction here, if the Federal Reserve parks its dollar-copter, the next step would be to look toward containing inflation. For this reason, the dollar is soaring +0.7% against the euro Wednesday through late afternoon trading hours Eastern Time. The PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP) is up 0.5% deep into the afternoon. Much of the foolhardy popular press is blaming the dollar move on a soft Spanish bond offering… silly short-hands…

For the same reason outlined, gold is on the deep decline. Gold futures are off roughly 3.3%; the SPDR Gold Shares ETF (NYSE: GLD) is off 1.9%; and gold miners Goldcorp (NYSE: GG), Newmont Mining (NYSE: NEM) and Barrick Gold (NYSE: ABX) are off between 5% and 6%. Gold should be on the rise if the global community is once again terrified about a European disintegration via Spanish debt softness and soft data. That would be the give-away for reporters with a clue… Luckily you still have The Greek to fill in the void.

Here’s Why I Would Use this as an Opportunity to Buy Gold:

1. The geopolitical powder keg remains tightly snug between U.S. warships and the Iranian coastline. Nothing has changed with regard to the Iranian nightmare. Iran has not budged in a significant way, and the West’s sanctions are increasingly suffocating it.


2. Recession seems to be overcoming Europe, where 20% of American exports are sold into. Wednesday, a Purchasing Managers Index for Europe was reported below 50, indicating the region is likely in recession. Also, regional retail sales fell 0.1% in volume and 2.1% year-to-year. The regional economy shrank 0.3% in Q4 2011, and seems set to mark another quarter of contraction, which would qualify it for recession. Compounding on this, unemployment for the euro zone reached a record high in February.


3. The European financial crisis has not yet subsided. Wednesday, soft demand for Spanish debt sent the markets into a spin. In a recent interview, Standard & Poor’s Sovereign Ratings Head, Moritz Kraemer said he believes Greece will probably have to restructure its debt again, involving needed aid from its European partners. Obviously, European heads are on record saying the latest bailout would be the last for Greece; now they may be put to the test at a time when their word will be measured. Moritz noted the risk posed by upcoming elections across Europe and Greece.


4. The American economy has been showing signs of strain, with recent manufacturing data, housing reports and consumer information indicating softness.

Thus, all the reasons gold has climbed over the last few years continue to exist, if they are not intensified. So while foolhardy capital may flow out of gold and gold relative investments Wednesday on a few words from the Fed, I suggest investors look to the weakness as an opportunity to add to positions.

Article should interest investors in precious metals stocks: Goldcorp (NYSE: GG), Agnico-Eagle Mines (NYSE: AEM), Allied Nevada Gold (AMEX: ANV), AngloGold Ashanti (NYSE: AU), AuRico Gold (NYSE: AUQ), Aurizon Mines (AMEX: AZK), Barrick Gold (NYSE: ABX), Brigus Gold (AMEX: BRD), Charles & Covard (Nasdaq: CTHR), Claude Resources (AMEX: CGR), Commerce Group (OTC: CGCO.PK), Compania Mina Buenaventura S.A. (NYSE: BVN), DRDGOLD (Nasdaq: DROOY), Eldorado Gold (NYSE: EGO), Entrée Gold (AMEX: EGI), Exeter Resource (AMEX: XRA), Gold Fields (NYSE: GFI), Gold Reserve (AMEX: GRZ), Gold Resource (Nasdaq: GORO), Golden Eagle Int’l (OTC: MYNG.PK), Golden Star Resources (AMEX: GSS), Great Basin Gold (AMEX: GBG), Harmony Gold (NYSE: HMY), IAMGOLD (NYSE: IAG), International Tower Hill Mines (AMEX: THM), Jaguar Mining (NYSE: JAG), Keegan Resources (AMEX: KGN), Kimber Resources (AMEX: KBX), Kingold Jewelry (Nasdaq: KGJI), Kinross Gold (NYSE: KGC), Midway Gold (AMEX: MDW), Minco Gold (AMEX: MGH), Nevsun Resources (AMEX: NSU), New Jersey Mining (OTC: NJMC.PK), Newmont Mining (NYSE: NEM), North Bay Resources (OTC: NBRI.OB), Northgate Minerals (AMEX: NXG), NovaGold Resources (AMEX: NG), Richmont Mines (AMEX: RIC), Royal Gold (Nasdaq: RGLD), Rubicon Minerals (AMEX: RBY), Seabridge Gold (AMEX: SA), Solitario Exploration and Royalty (AMEX: XPL), Tanzanian Royalty Exploration (AMEX: TRE), Thunder Mountain Gold (OTC: THMG.OB), U.S. Gold (NYSE: UXG), Vista Gold (AMEX: VGZ), Wits Basin Precious Metals (OTC: WITM.PK), Yamana Gold (NYSE: AUY), Coeur d’Alene Mines (NYSE: CDE), Endeavour Silver (NYSE: EXK), Hecla Mining (NYSE: HL), Mag Silver (AMEX: MVG), Mines Management (AMEX: MGN), Silver Standard Resources (Nasdaq: SSRI), Silver Wheaton (NYSE: SLW), SPDR Gold Trust (NYSEArca: GLD), Market Vectors Gold Miners ETF (NYSEArca: GDX), iShares Silver Trust (NYSEArca: SLV), ProShares Ultra Silver (NYSEArca: AGQ), ProShares Ultra Short Silver (NYSEArca: ZSL), Great Panther Silver (AMEX: GPL), Silvercorp Metals (NYSE: SVM), Paramount Gold and Silver (AMEX: PZG), Pan American Silver (Nasdaq: PAAS) and First Majestic Silver (NYSE: AG).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Gold Price Factors

At a time when you would expect gold prices to climb even higher, the shiny metal I call mankind’s inherent currency has dropped along with other asset classes. I’m sure you’ve wondered why, and I believe I’ve got some understanding of the complex forces that are driving gold prices today. These forces have helped to stabilize gold and even quelled the heat around the commodity recently. These latest weeks’ trading have helped us to understand the dynamics of the commodity all the better. Thus, I suspect I can add value to your forecasting.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Gold Price Factors

Gold prices dropped again to start this week, despite a swirling storm about the euro and new concerns about a possible U.S. government budget failure. You would expect gold prices to rise in such a scenario, but the metal was instead down roughly $30 Monday. The spot price of gold was flirting with sub-$1600 per ounce in fact, certainly surprising given the last several weeks of chaos. So what’s up?

Some might point to a previously overextended commodity price now seeking mean valuation, or reverting to its mean. This is certainly the most important factor in forecasting gold price movement, since the market only seeks to estimate true value. To understand how a mean reversion could be underway, we must review recent history briefly.

Gold topped out at about $1890 on the spot price (closing pricing), spurred by a frenzied drive to acquire the metal as the US appeared set to record a technical default on its debt this past summer. A quick study of the one-year chart for spot gold clearly illustrates an insecure price level near $1900, established by the spike in the commodity. Once the US Congress mitigated technical default risk, and while the United States even bore a downgrade of its sovereign credit rating by Standard & Poor’s (NYSE: MHP), investors looked around and saw all was not lost. Suddenly the gold price felt expensive, and so this medium term driver is certainly playing a major role in gold price action today. However, a look at the chart seems to show gold at about a medium term trend line, and a $1500 price would seem a secure floor despite its breaking of that line.

Something else is playing a short-term role in driving gold today though. Popular media, based on analyst interviews, regularly reports that there is a force against gold which is capital driven. This force is the theoretical use of gold-relative profits or positions to cover other positions as asset classes dive. It may likewise be that an unbalanced holding of gold in many portfolios is being balanced with capital seeking value in other segments. But, the drops seen in other investment securities pricing does not support this second idea as a main factor in markets.

Another important factor working against gold and all commodities is dollar strength. This has certainly been a stabilizing control on gold pricing. As the euro has found fewer friends while rumors swirl about an imminent Greek default, the dollar has benefited. As commodities are priced in dollars, the strength of the currency has made commodities cheaper in dollar terms. The funny thing is that as the global economy comes under stress, dollar strength has persevered, and this has certainly acted as a counterintuitive and counteracting force on gold pricing.

Over the longer term though, if the United States continues to find intensifying economic and investment pressures, the dollar could be eventually undermined, at which time gold would be free to fly to greater heights. This untethered scenario is the kind that supports gold pricing above $2000 and perhaps as high as $5000 per ounce. Without it though, I cannot find supporting reasoning to forecast new records for the price of gold.

This article should interest investors in precious metals stocks: Goldcorp (NYSE: GG), Agnico-Eagle Mines (NYSE: AEM), Allied Nevada Gold (AMEX: ANV), AngloGold Ashanti (NYSE: AU), AuRico Gold (NYSE: AUQ), Aurizon Mines (AMEX: AZK), Barrick Gold (NYSE: ABX), Brigus Gold (AMEX: BRD), Charles & Covard (Nasdaq: CTHR), Claude Resources (AMEX: CGR), Commerce Group (OTC: CGCO.PK), Compania Mina Buenaventura S.A. (NYSE: BVN), DRDGOLD (Nasdaq: DROOY), Eldorado Gold (NYSE: EGO), Entrée Gold (AMEX: EGI), Exeter Resource (AMEX: XRA), Gold Fields (NYSE: GFI), Gold Reserve (AMEX: GRZ), Gold Resource (Nasdaq: GORO), Golden Eagle Int’l (OTC: MYNG.PK), Golden Star Resources (AMEX: GSS), Great Basin Gold (AMEX: GBG), Harmony Gold (NYSE: HMY), IAMGOLD (NYSE: IAG), International Tower Hill Mines (AMEX: THM), Jaguar Mining (NYSE: JAG), Keegan Resources (AMEX: KGN), Kimber Resources (AMEX: KBX), Kingold Jewelry (Nasdaq: KGJI), Kinross Gold (NYSE: KGC), Midway Gold (AMEX: MDW), Minco Gold (AMEX: MGH), Nevsun Resources (AMEX: NSU), New Jersey Mining (OTC: NJMC.PK), Newmont Mining (NYSE: NEM), North Bay Resources (OTC: NBRI.OB), Northgate Minerals (AMEX: NXG), NovaGold Resources (AMEX: NG), Richmont Mines (AMEX: RIC), Royal Gold (Nasdaq: RGLD), Rubicon Minerals (AMEX: RBY), Seabridge Gold (AMEX: SA), Solitario Exploration and Royalty (AMEX: XPL), Tanzanian Royalty Exploration (AMEX: TRE), Thunder Mountain Gold (OTC: THMG.OB), U.S. Gold (NYSE: UXG), Vista Gold (AMEX: VGZ), Wits Basin Precious Metals (OTC: WITM.PK), Yamana Gold (NYSE: AUY), Coeur d’Alene Mines (NYSE: CDE), Endeavour Silver (NYSE: EXK), Hecla Mining (NYSE: HL), Mag Silver (AMEX: MVG), Mines Management (AMEX: MGN), Silver Standard Resources (Nasdaq: SSRI), Silver Wheaton (NYSE: SLW), SPDR Gold Trust (NYSEArca: GLD), Market Vectors Gold Miners ETF (NYSEArca: GDX), iShares Silver Trust (NYSEArca: SLV), ProShares Ultra Silver (NYSEArca: AGQ), ProShares Ultra Short Silver (NYSEArca: ZSL), Great Panther Silver (AMEX: GPL), Silvercorp Metals (NYSE: SVM), Paramount Gold and Silver (AMEX: PZG), Pan American Silver (Nasdaq: PAAS) and First Majestic Silver (NYSE: AG).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Gold Should Top $1600 Today but Weaken Friday

I am looking for gold to surmount $1600 Thursday, partly on Moody's (NYSE: MCO) ratings warning for the U.S., but I would sell out of my holdings before the close, as I expect the European bank stress tests to support the euro, and I anticipate American Congressmen will move more quickly now toward raising the debt ceiling.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative tickers include: NYSE: GG, NYSE: AEM, AMEX: ANV, NYSE: AU, NYSE: AUQ, AMEX: AZK, NYSE: ABX, AMEX: BRD, Nasdaq: CTHR, AMEX: CGR, OTC: CGCO.PK, NYSE: BVN, Nasdaq: DROOY, NYSE: EGO, AMEX: EGI, AMEX: XRA, NYSE: GFI, AMEX: GRZ, Nasdaq: GORO, OTC: MYNG.PK, AMEX: GSS, AMEX: GBG, NYSE: HMY, NYSE: IAG, AMEX: THM, NYSE: JAG, AMEX: KGN, AMEX: KBX, Nasdaq: KGJI, NYSE: KGC, AMEX: MDW, AMEX: MGH, AMEX: NSU, OTC: NJMC.PK, NYSE: NEM, OTC: NBRI.OB, AMEX: NXG, AMEX: NG, AMEX: RIC, Nasdaq: RGLD, AMEX: RBY, AMEX: SA, AMEX: XPL, AMEX: TRE, OTC: THMG.OB, NYSE: UXG, AMEX: VGZ, OTC: WITM.PK, NYSE: AUY, NYSE: CDE, NYSE: EXK, NYSE: HL, AMEX: MVG, AMEX: MGN, Nasdaq: SSRI, NYSE: SLW, NYSEArca: GLD, NYSEArca: GDX, NYSEArca: SLV, NYSEArca: AGQ, NYSEArca: ZSL, AMEX: GPL, NYSE: SVM, AMEX: PZG, Nasdaq: PAAS, NYSE: AG.

Gold Should Top $1600 Today but Weaken Friday

Wednesday’s move in gold was nothing new, so discount those theorists trying to tie the day’s advance to Federal Reserve Chairman Bernanke’s comments. Yes, the Fed Chief said more quantitative easing or other “untested measures” were possible for a still testy economy, but I would hope you all already knew that. This latest surge in the glittery metal I don’t own enough of is marking close to a 10% two-week gain. So Wednesday’s 1.2% rise to about $1582.20 is but a step in a staircase built on the crumbled architecture of medieval Europe and perhaps a few Blarney Stones.

Gold was not up on the dollar alone, but climbed over the euro too. This is about the demise of fiat currency, watered down by nation states seeking to save sovereign sinners Portugal, Ireland, Italy, Greece and Spain (the PIIGS). This is about the United States’ government growing its debt and deficit to record highs and then threatening default. This is about geopolitical chaos running through the oil rich Middle East and North Africa. This may be about the end of times... or at least the good times.

The gold standard seems to suit Standard & Poor’s (NYSE: MHP) and Moody’s (NYSE: MCO) just fine, with Tuesday’s downgrade of Ireland’s sovereign rating to junk, a move that followed the recent cutting of Portugal. It’s like the rating agencies find a new neck to slit each evening. Wednesday night Moody’s even dared to put the United States on ratings watch, warning that it is becoming more likely that the U.S. could suffer a short-term default on its debt payments.

But, in fact, all that glitters is not just gold. Silver was up near 7% Wednesday as well. Whatever hard asset we price in fiat currency is going to be worth more as those currencies disintegrate. Perhaps the biblical prophecy of loaves of bread going for a year’s salary is not so far off. In parts of Africa it’s already true, and the price of sugar helped to fuel the riots in Tunisia that toppled the government.

So I suppose you’re wondering what The Greek suggests to do in the near-term with regard to gold. I think you’ll be surprised with the answer. While I’m not sure what the Bilderbergers want over the long-term, and while I think traders would like to ride gold over $1600, I also believe Friday’s stress test results from Europe will be mostly good, if not adequate enough to support the euro. I think Wednesday evening’s warning from Moody’s, the shot across the bow, should be enough to cause a good number of Congressmen to crap their pants and raise the debt ceiling. In other words, I’m looking for gold to backtrack before too long, so even though I can feel the end of good times coming, I still say take your profits in gold before Friday, yet perhaps after we hurdle $1600 Thursday.



Article should interest investors in precious metals stocks: Goldcorp (NYSE: GG), Agnico-Eagle Mines (NYSE: AEM), Allied Nevada Gold (AMEX: ANV), AngloGold Ashanti (NYSE: AU), AuRico Gold (NYSE: AUQ), Aurizon Mines (AMEX: AZK), Barrick Gold (NYSE: ABX), Brigus Gold (AMEX: BRD), Charles & Covard (Nasdaq: CTHR), Claude Resources (AMEX: CGR), Commerce Group (OTC: CGCO.PK), Compania Mina Buenaventura S.A. (NYSE: BVN), DRDGOLD (Nasdaq: DROOY), Eldorado Gold (NYSE: EGO), Entrée Gold (AMEX: EGI), Exeter Resource (AMEX: XRA), Gold Fields (NYSE: GFI), Gold Reserve (AMEX: GRZ), Gold Resource (Nasdaq: GORO), Golden Eagle Int’l (OTC: MYNG.PK), Golden Star Resources (AMEX: GSS), Great Basin Gold (AMEX: GBG), Harmony Gold (NYSE: HMY), IAMGOLD (NYSE: IAG), International Tower Hill Mines (AMEX: THM), Jaguar Mining (NYSE: JAG), Keegan Resources (AMEX: KGN), Kimber Resources (AMEX: KBX), Kingold Jewelry (Nasdaq: KGJI), Kinross Gold (NYSE: KGC), Midway Gold (AMEX: MDW), Minco Gold (AMEX: MGH), Nevsun Resources (AMEX: NSU), New Jersey Mining (OTC: NJMC.PK), Newmont Mining (NYSE: NEM), North Bay Resources (OTC: NBRI.OB), Northgate Minerals (AMEX: NXG), NovaGold Resources (AMEX: NG), Richmont Mines (AMEX: RIC), Royal Gold (Nasdaq: RGLD), Rubicon Minerals (AMEX: RBY), Seabridge Gold (AMEX: SA), Solitario Exploration and Royalty (AMEX: XPL), Tanzanian Royalty Exploration (AMEX: TRE), Thunder Mountain Gold (OTC: THMG.OB), U.S. Gold (NYSE: UXG), Vista Gold (AMEX: VGZ), Wits Basin Precious Metals (OTC: WITM.PK), Yamana Gold (NYSE: AUY), Coeur d’Alene Mines (NYSE: CDE), Endeavour Silver (NYSE: EXK), Hecla Mining (NYSE: HL), Mag Silver (AMEX: MVG), Mines Management (AMEX: MGN), Silver Standard Resources (Nasdaq: SSRI), Silver Wheaton (NYSE: SLW), SPDR Gold Trust (NYSEArca: GLD), Market Vectors Gold Miners ETF (NYSEArca: GDX), iShares Silver Trust (NYSEArca: SLV), ProShares Ultra Silver (NYSEArca: AGQ), ProShares Ultra Short Silver (NYSEArca: ZSL), Great Panther Silver (AMEX: GPL), Silvercorp Metals (NYSE: SVM), Paramount Gold and Silver (AMEX: PZG), Pan American Silver (Nasdaq: PAAS) and First Majestic Silver (NYSE: AG).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.