Gyroscopic Investing

I took a look at the S&P chart from a the last couple of years and it is a beautiful upward trend.

Right now, we appear to be in a trough that is still consistent with the multi-year trend.

In the next three months we should either rocket higher or the whole trend will start to break down, which will chase a lot of momentum money out of the market. 

It should be a lot of fun to watch the markets between now and the end of the year.

I predict that by December 31 the stock market will be lower and gold and LT treasuries will be higher.  JMHO, of course.

MediumTex wrote: I took a look at the S&P chart from a the last couple of years and it is a beautiful upward trend.

Right now, we appear to be in a trough that is still consistent with the multi-year trend.

In the next three months we should either rocket higher or the whole trend will start to break down, which will chase a lot of momentum money out of the market. 

It should be a lot of fun to watch the markets between now and the end of the year.

I predict that by December 31 the stock market will be lower and gold and LT treasuries will be higher.  JMHO, of course.

I predict that both stocks and Treasurys will be lower by December 31st.

Works for me!

I meant gold and bonds up....
A lot.

Libertarian666,

You really think that yields are going to be higher by the end of the year?

In other words, you think that money is going to be piling out of both the U.S. stock market AND bond market?

MediumTex wrote: Libertarian666,

You really think that yields are going to be higher by the end of the year?

In other words, you think that money is going to be piling out of both the U.S. stock market AND bond market?

Yes.

TennPaGa wrote:

Libertarian666 wrote:

MediumTex wrote: Libertarian666,

You really think that yields are going to be higher by the end of the year?

In other words, you think that money is going to be piling out of both the U.S. stock market AND bond market?

Yes.

Where will it go?

Cash, including gold.

I just hope I hit a rebalance band before then!...

Libertarian666 wrote:

TennPaGa wrote:

Libertarian666 wrote: Yes.

Where will it go?

Cash, including gold.

If it goes into cash, it's going to be going into treasuries, and that should push down yields across the whole yield curve, right?

MediumTex wrote:

Libertarian666 wrote:

TennPaGa wrote: Where will it go?

Cash, including gold.

If it goes into cash, it's going to be going into treasuries, and that should push down yields across the whole yield curve, right?

No. Treasury yields are going up already and will continue up. The zero-rate game is coming apart.

Libertarian666 wrote:

MediumTex wrote:

Libertarian666 wrote: Cash, including gold.

If it goes into cash, it's going to be going into treasuries, and that should push down yields across the whole yield curve, right?

No. Treasury yields are going up already and will continue up. The zero-rate game is coming apart.

So you will definitely be surprised if yields are lower on December 31 than they are today?

How is money going to be going into cash if yields are rising?  Don't rising yields suggest that money is leaving the treasury market?

MediumTex wrote:

Libertarian666 wrote:

MediumTex wrote: If it goes into cash, it's going to be going into treasuries, and that should push down yields across the whole yield curve, right?

No. Treasury yields are going up already and will continue up. The zero-rate game is coming apart.

So you will definitely be surprised if yields are lower on December 31 than they are today?

How is money going to be going into cash if yields are rising?  Don't rising yields suggest that money is leaving the treasury market?

Yes, I will be surprised in that case. The long rates are the ones I was talking about; I expect T-Bill yields to stay near zero.

Libertarian666 wrote: Yes, I will be surprised in that case. The long rates are the ones I was talking about; I expect T-Bill yields to stay near zero.

How do you think that the yield would have to be on 5, 10 and 30 year treasuries before people started pulling their money out of T-Bills and into the higher yielding, longer dated bonds?

AdamA wrote:

Libertarian666 wrote: Yes, I will be surprised in that case. The long rates are the ones I was talking about; I expect T-Bill yields to stay near zero.

How do you think that the yield would have to be on 5, 10 and 30 year treasuries before people started pulling their money out of T-Bills and into the higher yielding, longer dated bonds?

If the Fed stops buying? Several hundred basis points higher, at least.
If they don't stop buying, less in the short term and much more in the long term.

Libertarian666 wrote:

AdamA wrote:

Libertarian666 wrote: Yes, I will be surprised in that case. The long rates are the ones I was talking about; I expect T-Bill yields to stay near zero.

How do you think that the yield would have to be on 5, 10 and 30 year treasuries before people started pulling their money out of T-Bills and into the higher yielding, longer dated bonds?

If the Fed stops buying? Several hundred basis points higher, at least.
If they don't stop buying, less in the short term and much more in the long term.

I know that you know this, but given that the last two times the Fed stopped buying bonds yields dropped, why will it be different this time?

MediumTex wrote: I took a look at the S&P chart from a the last couple of years and it is a beautiful upward trend.

Right now, we appear to be in a trough that is still consistent with the multi-year trend.

In the next three months we should either rocket higher or the whole trend will start to break down, which will chase a lot of momentum money out of the market. 

It should be a lot of fun to watch the markets between now and the end of the year.

I predict that by December 31 the stock market will be lower and gold and LT treasuries will be higher.  JMHO, of course.

It's just over four months until Dec. 31, not three.  I predict that on Dec. 31, 2013, stocks, gold and LT will be within 5% of today's prices.

kka wrote:

MediumTex wrote: I took a look at the S&P chart from a the last couple of years and it is a beautiful upward trend.

Right now, we appear to be in a trough that is still consistent with the multi-year trend.

In the next three months we should either rocket higher or the whole trend will start to break down, which will chase a lot of momentum money out of the market. 

It should be a lot of fun to watch the markets between now and the end of the year.

I predict that by December 31 the stock market will be lower and gold and LT treasuries will be higher.  JMHO, of course.

It's just over four months until Dec. 31, not three.  I predict that on Dec. 31, 2013, stocks, gold and LT will be within 5% of today's prices.

You're right.

So you're thinking that the stock market has been going more or less straight up for a couple of years now and it's going to just start going sideways?

It's rare for all three of the PP's volatile assets to the spend several months all going sideways, which is what you are suggesting is going to happen between now and the end of the year.

I don't think that's what is going to happen, but it will be fun to watch it unfold.

MediumTex wrote:

kka wrote:

MediumTex wrote: I took a look at the S&P chart from a the last couple of years and it is a beautiful upward trend.

Right now, we appear to be in a trough that is still consistent with the multi-year trend.

In the next three months we should either rocket higher or the whole trend will start to break down, which will chase a lot of momentum money out of the market. 

It should be a lot of fun to watch the markets between now and the end of the year.

I predict that by December 31 the stock market will be lower and gold and LT treasuries will be higher.  JMHO, of course.

It's just over four months until Dec. 31, not three.  I predict that on Dec. 31, 2013, stocks, gold and LT will be within 5% of today's prices.

You're right.

So you're thinking that the stock market has been going more or less straight up for a couple of years now and it's going to just start going sideways?

It's rare for all three of the PP's volatile assets to the spend several months all going sideways, which is what you are suggesting is going to happen between now and the end of the year.

I don't think that's what is going to happen, but it will be fun to watch it unfold.

Oh, I'm sure they will all bounce around, but I don't expect any of them to crash by the end of the year.  And I agree with you that both stocks and LT tanking at the same time is unlikely.

MediumTex wrote:

Libertarian666 wrote:

AdamA wrote: How do you think that the yield would have to be on 5, 10 and 30 year treasuries before people started pulling their money out of T-Bills and into the higher yielding, longer dated bonds?

If the Fed stops buying? Several hundred basis points higher, at least.
If they don't stop buying, less in the short term and much more in the long term.

I know that you know this, but given that the last two times the Fed stopped buying bonds yields dropped, why will it be different this time?

I'll save you both some time and point out that Libertarian666 is just parroting the opinions of Peter Schiff. So, Peter Schiff explains his "logic" in this interview with Lauren Lyster:

http://youtu.be/F8pX0cN5ZlA?t=1m50s

Lyster calls Schiff on his blown hyperinflation call and Schiff goes on to whine about how irrational debt-based fiat money is and why the dollar will supposedly crash if the Fed stops buying the bonds.

I've always said that Peter Schiff does an excellent job at understanding and predicting the problems with private credit — but he has no clue what he's talking about when it comes to a sovereign currency issuer with a free-floating exchange rate.

And the reason why he has no clue about sovereign currency issuers with a free-floating exchange rate is because he applies the same logic he uses for private credit onto all sovereign nations without realizing that some nations (such as the US, UK and Japan) have total control over their own currencies.

Anyway, MT, if you want to get a sense of where Libertarian666 is coming from, just watch the Peter Schiff interview. (If you remember, Doodle used to be a diehard disciple of Jim Rodger's before he realized that Rodgers was just another talking head marketing he wares).

MediumTex wrote: I don't think that's what is going to happen, but it will be fun to watch it unfold.

How about this:

SPY 180
GLD 170
TLT  95

(As of Dec 31).

This is basically wishful thinking (for the sake of my VP), but I could see it unfolding like this. 

AdamA wrote:

MediumTex wrote: I don't think that's what is going to happen, but it will be fun to watch it unfold.

How about this:

SPY 180
GLD 170
TLT  95

(As of Dec 31).

This is basically wishful thinking (for the sake of my VP), but I could see it unfolding like this.

Closest prediction to my own..

SPY 170
GLD 150
TLT 95

Pretty much puts my portfolio near flat for the year..

Gumby wrote:

MediumTex wrote:

Libertarian666 wrote: If the Fed stops buying? Several hundred basis points higher, at least.
If they don't stop buying, less in the short term and much more in the long term.

I know that you know this, but given that the last two times the Fed stopped buying bonds yields dropped, why will it be different this time?

I'll save you both some time and point out that Libertarian666 is just parroting the opinions of Peter Schiff. So, Peter Schiff explains his "logic" in this interview with Lauren Lyster:

http://youtu.be/F8pX0cN5ZlA?t=1m50s

Lyster calls Schiff on his blown hyperinflation call and Schiff goes on to whine about how irrational debt-based fiat money is and why the dollar will supposedly crash if the Fed stops buying the bonds.

I've always said that Peter Schiff does an excellent job at understanding and predicting the problems with private credit — but he has no clue what he's talking about when it comes to a sovereign currency issuer with a free-floating exchange rate.

And the reason why he has no clue about sovereign currency issuers with a free-floating exchange rate is because he applies the same logic he uses for private credit onto all sovereign nations without realizing that some nations (such as the US, UK and Japan) have total control over their own currencies.

Anyway, MT, if you want to get a sense of where Libertarian666 is coming from, just watch the Peter Schiff interview. (If you remember, Doodle used to be a diehard disciple of Jim Rodger's before he realized that Rodgers was just another talking head marketing he wares).

It is very impolite to make assumptions as to the source of my analysis. I am not parroting anyone.

MediumTex wrote: I took a look at the S&P chart from a the last couple of years and it is a beautiful upward trend.

Right now, we appear to be in a trough that is still consistent with the multi-year trend.

In the next three months we should either rocket higher or the whole trend will start to break down, which will chase a lot of momentum money out of the market. 

It should be a lot of fun to watch the markets between now and the end of the year.

I predict that by December 31 the stock market will be lower and gold and LT treasuries will be higher.  JMHO, of course.

How much lower/higher?  If you're going to make a prediction, put some numbers on it.

Libertarian666 wrote:

MediumTex wrote: I took a look at the S&P chart from a the last couple of years and it is a beautiful upward trend.

Right now, we appear to be in a trough that is still consistent with the multi-year trend.

In the next three months we should either rocket higher or the whole trend will start to break down, which will chase a lot of momentum money out of the market. 

It should be a lot of fun to watch the markets between now and the end of the year.

I predict that by December 31 the stock market will be lower and gold and LT treasuries will be higher.  JMHO, of course.

I predict that both stocks and Treasurys will be lower by December 31st.

How much lower?  Percentages or numbers please.

kka wrote:

Libertarian666 wrote:

MediumTex wrote: I took a look at the S&P chart from a the last couple of years and it is a beautiful upward trend.

Right now, we appear to be in a trough that is still consistent with the multi-year trend.

In the next three months we should either rocket higher or the whole trend will start to break down, which will chase a lot of momentum money out of the market. 

It should be a lot of fun to watch the markets between now and the end of the year.

I predict that by December 31 the stock market will be lower and gold and LT treasuries will be higher.  JMHO, of course.

I predict that both stocks and Treasurys will be lower by December 31st.

How much lower?  Percentages or numbers please.

10% price drops on each, starting from the date of my prediction.