Prove it, Buster! (GLD, UNG)

Prove it, Buster! (GLD, UNG)

It’s late, yes, but you don’t care.

You’ve been waiting for a crack at it all year.

And now that it’s finally here, all you can think about is your chance for stardom.

Your name in lights.

Your moment to shine – to show everyone who are you are.

The real market expert.

The annual Bourbon and Bayonets year-end market forecasting champion and all round superior humanoid.

Let the hammers fly and the stock-picks follow free.

Name your market, and give it a number.

Gold Oil, The Dollar, The Dow,
NASDAQ, S&P 500, 30 year bond,
10 year note, Rose bowl,
Global political prophecies,
Local mid-term electoral guesses

 

jtr

Even the identity of Jack the Ripper!
What have you!

Lay it on the line, and show us you got cojones.

On December 31st 2014, where will they be?

It’s less than four months away – how hard could it be?

Take a stab.

And while you’re doing the math, consider some of our own prognostications.

Well start with the commodities.

Gold

Our position on the metal is widely known, and it’s not positive. As of today, it appears you’re better off a seller than a buyer of gold.

As for the magic number, we’re still holding out for an ultimate bottom slightly under $1000. But we’re not so convinced it’ll be an express bus that gets us there.

greyhound

Gold’s on a slow boat to Pearl Harbor, friends. If you’re on it, grab a lifejacket and dive into the swim now.

And look for the SPDR Gold Trust ETF (NYSE:GLD), a relatively reliable proxy for the metal, to be at her former lows of $114 when the bells of New Year come haunting.

Stepsister silver will not likely see as gruesome a future as gold. We’ll throw out an $18 figure for year-end.

Oil and Gas

We like the future of both oil and gas, though it’s the latter that gets us pumped up over the near term.

The U.S. Natural Gas Fund ETF (NYSE:UNG) is the most liquid of the gas ETFs, and appears to have found a bottom over the last two months.

Look here –

ung911

The chart has a number of positives –

First, both RSI and MACD (in blue, at bottom) are diverging sharply higher from a flat price action (blue, at top). That speaks to a gathering bullish momentum in UNG’s trade.

We also see price holding above support at the long term (yellow) moving average in the $21.50 range.

And with both the short term MA scooping price and winter fast approaching, our belief is that support will hold and UNG will wind her way higher toward her last retracement high of $26.50 by New Years.

And we call upon no less than the illustrious, acclaimed and widely feted Farmer’s Almanac, which is calling for a super-cold winter this year, to support our contention.

street

What about oil?

Oil will also move higher, in spite of her most recent slide.

After topping out recently at $106, crude dove like a U-Boat in the Hudson, reaching nearly $91 in her latest trade. That’s a dump of 14% in less than three months, and it can’t last, as we see it.

Look for the sludge to climb back towards $100 by year end, hitting $99 while you’re slurring Old Lang Syne in Mary-Beth McIlhenny’s ear and searching frantically through your wallet for a tab of Rohypnol.

Creep! Fire him! Immediately!

Everything in its time, my pretty.

U.S. Dollar

We turn now to the U.S. Dollar (Index), which will continue looking strong and close the year precisely where it is today at DXY 84.17. The dollar has gotten overbought in recent days and will need to cool off considerably for the next eight to ten weeks.

Facebook Stock

Our little darling.

Everyone’s favorite internet stock is also our pick for bull market poster-child. She’s now at $77.43 and looks anything but overbought. Should tack on another ten bucks by January 1st . Call it $87 even.

Equities

The equity market is actually the hardest for us to call. Because while we’re bullish for the intermediate term, say, five to fifteen months, we can’t be sure what might transpire over shorter durations. We could see a pullback. We could see a drift, with trade holding in a tight range. It’s anybody’s guess.

Have a look at the Dow –

djia911

There are no obvious signs that we’re overbought here, though a double top (in red) is generally a sign of building resistance. If we don’t see a punch through the 17,200-level in the next ten days, we’d bet on sideways action until just before the November elections. And we’d play it accordingly, with a short strangle.

Over the longer haul, of course, this is a bull market, so by years end, we’d have to figure at least 17,200.

Let’s call it like this – if the Democrats keep the Senate, Dow 17,450 by the close of the year.

If the Republicans win it back…

Dow 18,000.

Now, let’s hear from you.

Many happy returns,

Matt McAbby, Senior Analyst, Normandy Research

18 comments on “Prove it, Buster! (GLD, UNG)

  1. Gold: 1185
    Oil: 86.30
    Dollar: 86.29
    Dow: 16,100
    NAZ: 3950
    S&P: 1860
    30 YR: 3.2
    10 YR: 2.3
    Rose Bowl: Nebraska 24 Stanford 17

  2. Thank you ,so much for sending me these analysts.

    It,s difficult , to give any opinion to be different , I agree with most the said here .

  3. The e-mailed version of this article doesn’t look like the posted one. The GDX graph appears four times in the e-mail.

  4. Interesting conundrum on the National Debt and the Feds keeping interest rates down, the low interest rates are keeping the cost of borrowing down and has led to a 500 billion decline in the annual increase of the national debt. If the country pulls out of the current doldrums than the tax receipts should increase to cover the difference in the interest rate increase. I should think if the Fed can unwind their position in an orderly fashion than we may see a very pleasant investment and business environment next year. It looks like the inertia of a growing economy might raise all ships, even the politicians in spite of themselves. If the mid term elections lead to Republican gains than we may actually see the prospect of the national debt problem cooling off. Either way the dollar should stay strong no matter what Obama and Congress try to do as a divided government is very good for business. Not so sure on Europe as they still have massive structural problems within the EU and I don’t see anything which is happening which will make it better. The dollar maybe the safest place to be for the next couple of years.

  5. Enjoyed the commentary, BUT, would have been nice if your plots and grafts fit the dialog… All I seen was GLD and GDX grafts… But thanks for the opinion anyway!

  6. The market and politics. I mentor the financially troubled, and there is no path to a rosy long term future for these families without a few years of pain. The country is financially troubled. If we elect some responsible people who enact policy that will assure a rosy long term future for the US, we must go thru a painful few years.

    If a conservative, responsible congress is elected (who probably will not have the balls to do what is needed), the sequence will be one year of euphoria (market run up), 2 years of painful reality (market down), 4-8 years of economic growth and market gains.

    Unfortunately the needed 2 or 3 years of pain may mean that conservative leadership, although correct for long term prosperity, can not survive the 2 or 3 years of needed pain.

    Drake

  7. Gold is being controlled by Central Banks, while buying it,

    Negative interest rates will support the overall Stock Market.

    Russia, China and Japan are preparing for War.

    The US is the catalysis, hoping to regain World Dominance, it appears to still have it, but it is an illusion.

    World Dominance for at least the next 50 years will continue to disappear.

    The US will have the greatest internal unrest.

    The Middle Class of all the Democracies is disappearing, their Poor are becoming Slaves, thus can no longer maintain the Rich and Powerful in the style to which they have become accustomed.

    War will be a disaster.

  8. Once again I differ from your predictions. I won’t go into all the reasons why, but here we go….
    Gold 143
    Silver 23
    Ung 24.5
    Oil 93
    Dxy 81
    S P 500 2140 on the way to 2300 by mid april before the bear visits
    ARKANSAS RAZORBACKS will be back in a bowl game!!!!

  9. Ok, I’ll take the bait. Gold finishes at $925 spot price, silver $12.85. The DOW @18,250, SPX at 2125. Now for oil, let’s say $115 and the dollar 86.25. Oh yes, UNG. I’ll go with 26 even. By the way, I really enjoy your work. I probably do not have the free capital to take advantage. A little humor goes a long way in the world today!

  10. Good, timely review. Presented well. Would like to see other categories. Transportation; airlines, trucking some time.

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