Market: Gold is Dead

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A Little-Known Options Play Has Just Tripped the "R-4 Trigger" Which means that approximately two weeks from now, you'll have the chance to cash in for gains that could earn you $880 for every $1,000 you put in. Even better, you'll have the chance to do this about twice per month going forward.  Learn more here. Market: Gold is Dead By Christian DeHaemer | Thursday, March 12th, 2015 The S&P 500 has been falling since the end of February. It is down about 170 points since it hit all-time highs three weeks ago. And yet, as you can tell by this five-year chart, the uptrend remains on track. The S&P 500 remains well above its 200-day moving average, and the MACD remains stuck in overvalued territory, as it has been since 2012. If the uptrend breaks, the most dominant support level is around 1,700, where the 200-day moving average would meet the drop at the 2013 highs. The P/E ratio on the S&P is now at 17.7, which is above the 10-year average of 15.8. It should be noted that in the year 2000, before the dot-com bust, the P/E ratio was at 35. Bubbles run further than you think. It may not be "the top," but it is far from the bottom.  Advertisement XL Gold Cycle: A Pattern of Fortune You might remember the gold bull runs of the 1970s and '80s... But what you might not know is that those runs were a part of something called the XL Gold Cycle. Now, nearly 40 years later and right on schedule... all the pieces are in place for the biggest XL Gold Cycle ever. Click here to see exactly how to put yourself on the right side of the upcoming XL Gold Cycle — and the kinds of profits that are in store. Good News is Bad The downdraft lately is based on the absurd idea that "good news is bad" and will enable the Fed to hike rates in the summer. This liquidity-driven market hates the idea that the money will dry up, and it didn't like the job numbers. The good news comes in the form of the unemployment rate. More Jobs Employers added more jobs than forecast in February, and the unemployment rate dropped to 5.5%, the lowest in almost seven years, showing the labor market is sustaining progress after the best annual performance in 15 years. The 295,000 advance in payrolls last month followed a 239,000 January increase. The unemployment rate fell from 5.7%. The Fed has said that unemployment between 5.2% and 5.5% will be sufficient to raise rates. These numbers are all bunk, however. The quality of jobs is poor, with the largest surge coming in the restaurant trade's 66,000 new jobs. The labor participation rate was at 62.8% for February — a low not seen since March of 1978. The number of people who don't work is now at 92,898,000. Fewer Jobs Going Forward Numbers will deteriorate in March as energy and drilling jobs begin to get counted. U-Haul recently reported that in the Bakken region, four out of five rentals are one way out. The three top oil service firms — Schlumberger, Halliburton, and Baker Hughes — have announced a combined 22,000 layoffs in recent months. Despite the jawboning by Fed Chief Yellen about removing the word “patience” from the next round of Fed statements, they will not raise interest rates. They can't simply because there is a good chance we are heading into another recession. Just look at the earnings numbers... Advertisement How Did an Old, Solitary Woman Turn $5,000 into $22 million? You've seen these rags-to-riches stories in the movies and in fairy tales. But the story of Betty Landbourne is true — which makes it all the more shocking. You see, Betty, living alone in her New York apartment, managed to turn a $5,000 initial investment into a fortune worth in excess of $22 million by following a handful of simple trading rules. Betty is no longer with us today, but the rules she discovered are known to modern traders as "The Secret of Rich Man's Row." Today, that secret can be yours too. Click here to learn more. Earnings Are Dropping Earnings projections for the S&P 500 are dropping rapidly due to the strong dollar and falling oil prices. According to the latest data from FactSet, analysts now expect companies in the S&P 500 to report earnings growth of 2.4% for 2015. That’s the weakest pace of annual profit growth since 2009, when profits fell 7.9% from the prior year. According to the Wall Street Journal: Analysts typically overshoot their corporate profit targets, only to lower them before the earnings reports roll in. But these latest cuts are particularly deep and particularly early. As recently as December, analysts had been expecting S&P 500 profits to grow 8% for 2015. Which brings us to gold. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) just hit an all-time low. Check out the massive volume as long-term gold bugs puke out their shares. This is a classic capitulation low. In another sign of a bottom, Allied Nevada Gold (NYSE: ANV), a stock that went from $4.00 to $45.00 after 2009, just declared Chapter 11. It now trades at $1.08. Dead companies lay the foundation for new bull markets in commodities. This is the first corpse but assuredly not the last. If you are a market contrarian, you have to love it. No one wants to own gold now. The gold conferences I've attended over the last two years were woefully unattended. And yet check out this chart Bloomberg put out: It shows that gold outperforms during stock market crashes. Winning gold mining stocks — those with solid balance sheets and savvy management — go up 1,000% or more. And yet they are giving these companies away. I've recently found four companies that trade less than the cash on their balance sheet, which I'm looking into further. My associate Nick Hodge has written a special report on the gold cycle and has three junior gold stocks that he thinks will be among these 10-baggers over the next few years. Read about them here. Good hunting, Christian DeHaemer @TheDailyHammer on Twitter Since 1995, Christian DeHaemer has specialized in frontier market opportunities. He has traveled extensively and invested in places as varied as Cuba, Mongolia, and Kenya. Chris believes the best way to make money is to get there first with the most. Christian is the founder of Crisis & Opportunity and Managing Director of Wealth Daily. He is also a contributor for Energy & Capital. For more on Christian, see his editor's page. I liked this article | I did not like this article Follow Energy and Capital on The Bottom Line Related Articles Investing in Middle East Solar Oil Storage Companies are About to Explode The Dirty Secret Behind Natural Gas Flaring Recently... 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