Greg Weldon - 11/14/20

 

Greg Weldon: This is not a pretty picture!

Gregory Weldon, Released on 11/14/20 (Recorded on 11/13/20)

hi this is the goal guru for friday

the 13th november of 2020.

after the close here on friday have some

interesting stuff because

man i mean what a week makes we got long

goal we got stopped out in the kind of

the melee

earlier in the week nothing really to do

about that

twice in a row now it's kind of getting

whipsawed but you got bull trap bear

trap bull trap now actually you have

another bear trap

and the way it sets up here is off some

of the data and off some of the

evolution we got over the week as it

relates to the fed so

right to it the budget numbers after we

just

got a uh you know end of september

number that showed us a record 3.123

3.132 something like that uh trillion

dollar deficit

for fiscal 2020 by far a record

we talked about this last week the

increasing amount of debt and paper and

so on and so forth well here you get hit

with another

you know man severe body blow right in

the first month here of october

first month of the new fiscal year you

know basically talking about 2021

here at this point and you have uh over

a half

a trillion dollars in outlays spending

alone was over a half a trillion dollars

in october uh and you see that receipts

were less than a quarter of a trillion

dollars

so you're gonna have a quarter of a

trillion dollar debt you know deficit

every single month well that fits right

in with another three trillion dollar a

year deficit coming right

i mean it's only phantom funny money

that the fed can print and every time

there's a

speed bump you know print another

trillion and hey a trillion ain't enough

we need two tree no that's not enough we

need three trillion

it reminds me of kind of the if you

remember the burton ernie thing where

they're like yeah raw bravo it's all

great and it's like yeah that was

awesome outstanding bravo bravo on

coranka well it was pretty good pretty

good yeah

well it was not too bad you know not too

bad yeah actually that wasn't that good

no

that was not good no that's that was

awful boo yeah awful

i mean this is kind of where you're at

here in terms of

at some point when you look at all this

you know deficit spending all the

money printing you know it's kind of

where i see all this going

you know and when you look at where this

you know

really end games for you it's not a

pretty picture

because you're talking about

entitlements and every time entitlements

get involved and you saw it during this

election

trump wants to eliminate social security

i mean that's a fraudulent

statement to whatever degree that wasn't

the proposal the proposal is to save

social security

for those that already have it that are

those that are already living off it

and to grandfather out because you can't

afford this

this is dead by 2034 2033 2034

2035 in there you know that

you just campaign out like this social

security medicare medicaid

it's the two biggest expenditures it

always is

but note also net interest

all right 32 billion when you shave away

some of the

exterior on that you adjust it to

include just the interest on the

treasury debt

outstanding the 26 trillion dollars

which is really more like

just somewhere north of 20 on a

marketable securities

dynamic doesn't really matter the bottom

line is

that was 20.076 billion

in october that is more than

the spending in october on homeland

security labor education

army navy air force 20 times the fda at

a time when they're supposed to be you

know

helping us get out of coving twice the

spending

on renter assistance 100 times the

amount spent

on homeless assistant assistance and it

is equal

equal to the dollar spent on the

unemployment trust fund which was

expanded and

extended benefits now this is not like

donald trump or this is not

this is everybody all the debt and the

interest that we owe

with interest rates at record lows

think about that because this is a

powder keg we've been talking about this

for years it came up certainly through

20 29

2008 2009 i mean you know into 2011

but then of course you know lower longer

and cutting rates to zero

kind of made all that go away because

interest expense wasn't it was growing

and it was a bigger percentage

of the overall spending certainly that's

true and you know when you rate that

relative to the fact that interest rates

are at record lows

you can see how it's a powder keg if

interest rates rise this is one of the

offsets to we want higher inflation and

we're not going to raise rates

federal reserve policy because they risk

blowing up you know the treasury in in

this sense in terms of

the cost of interest on the debt so it's

another reason for more qe down the road

too

by the way and it's the reason the bond

market is basically worthless here

and needs to be sold at every

opportunity but this just

is amazing that this is the situation

and what does all this mean well you

know it gets back to powell and it gets

back to the fed and it gets back to qe

and it gets back to the fact that

the fed powell the powell fed rather has

told us very specifically where they

stand every step of the way

he's been the most efficient

communicator of all

i mean maybe too slow honestly because

they dragged it out but they did

and this has been going on since when

august of 2018

what's the bull marking gold start this

last leg

august of 2018 is a direct correlation

and here's the crux because this is the

conundrum can the fed actually pull it

out

i mean can they do enough to bring us

out of this to keep the bubble floating

because

you know it's a 50-year credit bubble so

the question is can they keep it going

now you know powell also notes that you

have a this hole in labor market that

i've been talking about for so long as

such a big problem

is significant because this is a whole

layer of people that are gone

blown out never coming back all right i

love his comment here it's just

excellent you know i mean in terms of

describing it

not excellent at all in terms of the

message it carries because it's awful in

terms of the message it carries

but that's how excellent it is that he's

bringing it to the forefront

small businesses generations of

intellectual capital being destroyed

if you think about that and what that

means

it is devastating it's devastating

and this is defense canada what are they

going to do so of course

you know what's left i mean the bottom

line is

the feds the moment the firepower left

we already looked last weekend what's

the differentials between

you know what the ecb has done what the

boj has done the boj is four times ahead

of the fed

in terms of percentage expansion and

balance sheet the the ecb is twice ahead

of that and half way behind the boj

and we're at the low end we have a lot

of upside room you know that there's a

tremendous amount of debt the fed could

snap it all up

they can push the monetary armageddon

button that i talked about in 2006

in my book and wipe out every bond ever

printed we're headed

in that direction and that is wildly

bullish for gold

wildly bullish for gold

because the fed's gonna have to come up

with something super new the nuclear

you know the nuclear options are

becoming more and more

almost you know not i mean necessary and

that's not an academic set i mean you

know the time for academic solutions

past 1990 was the last time you could

have fixed this

and you didn't so i'm not talking about

what's wrong right i'm not arguing with

academics and

business degrees they're going to tell

me you know that's not the right thing

to do of course not

it's the only thing to do to avoid a

debt deflation

this is we want inflation versus a debt

deflation we get inflation we raise

rates we can contain it we know how to

do that

a debt deflation destroys everything

they will do whatever they have to do

and that's still widely bullish for gold

and that includes when a government gets

in and says hey we're gonna spend seven

trillion dollars

on an infrastructure package on housing

education health care

i mean pipe dream yeah sure

but this is the mindset that's the thing

here the mindset

you got three trillion printed by the

fed you got three trillion printed

by the by congress for all intents and

purposes if you know what i mean

all right and it's not enough why

because we looked at it last week as a

percentage basis of the balance sheet

it's not enough it's not even close to

what it's been in the past the

mathematical conundrum is hitting it's

hitting hard and the fed's worst kind of

nightmare is almost laying out here what

are they going to do

i mean what are they going to do what's

left

that's what's left the dollar it's

always what's left it's always what's

used at the end it's

always the relief valve the dollar

it's hovering and again we talk about

going back to where

you know looking at the bojs stimulus

and the print money printing i should

say versus the

ecb's money printing versus the feds the

fed's at the low end and the dollar's

still going down it's pretty amazing

pretty much from the you know pledge ie

aka threat

that uh the fed will print as many

dollars as it takes to avert a debt

deflation

that results from dollar debt out there

in the world a shortage of dollars

so took that risk off the table and

that's what drove the dollar down here

along with you know hey we're going to

print you know a lot of money and in the

beginning remember

the fed the fed knew in the congress

here in the us was much quicker

on the draw than a lot of other places

in terms of getting money out there

they really were so even though there

was hesitation by the trump

administration

at the end of the day the u.s when they

got their stuff together and when powell

came into play

really made made moves much faster than

other places

since then we've gone sideways why

because other places have done more

but that hasn't resulted in a dollar

rally and that's key

when this thing kind of gives up and

you're like yeah it's back on the fed

and we're right there man we're right

there and that's why we are going to

keep

taking chances being long gold and i

don't care if we lose another time

it's three for three three strikes and

you're out fine if that means you don't

want to be a go guru or service

guy that's fine i mean i get it you know

some people want constant information

you want to

be in and out all the time we look for

the big macro moves directly and then we

want to be best positioned for those

moves

that's the service we provide and i

think we do a good job do we have losing

trades of course we do this this is a

tough business man

this is a tough market to handicap i

would make the same trades again just as

i will going forward because they're the

right moves given the situation

the risk is high here it's an

unfortunate side you know sidewind of

the

fact that didn't you know we're two

thousand dollars a futures contract's

worth 200 grand that's a huge amount

you know when you're talking about what

i'm going to look at in a second you can

understand why that you know why that's

such a big number

bottom line is below 9174 you're there

it completes the entire secular reversal

trend violation everything that began

here off the post coveted spike to a new

high when the fed came in and said

we'll print as many dollars as we have

to it's been straight down ever since

the rallies have been shallow you can

see you can't even get above the 100-day

moving average

let alone to the fibonacci retracements

this is perch poised position the other

way

to the downside in terms of the value

the gold-adjusted value of the dollar

you can't get through 100-day moving

average so you know here too

downside we're looking for the next

lower low we have a lower high

off the moving average we have two of

them now actually

that's a setup and it's a setup for as

frustrating as it's been to be

you know kind of bull trap bear trap

bull trap this is another bear trap

maybe

all right but at the same time all right

you see the 50-day moving average has

just turned over and it's been a

defining downward short-term trend

dynamic all right

so trying to pick the breakouts you know

has been a little more difficult than if

this were all aligned perfectly and

we're coming out of a

you know of a two month long gone

nowhere pattern

okay which is kind of where we're coming

to so

within that vein now we're at the

hundred day which is now starting to

flatten out

and you're kind of breaking below it and

yet you keep pulling back above it

this is such a sign of strength i can't

help but look at it that way

it is and when you see this is rock

solid holding this should have broke

this should have cracked and it didn't

it made a new low off of here made a new

law for here

look at the reversals there's demand for

gold at 18.50

it's that simple there's demand for gold

at 18.50

and if the dollar is back in play and it

looks like it could be very soon

1966 is a very well defined

breakout pivot now this is as robust as

it gets it's a major bull trap high

and that makes it a major longer term

pivot if you get back above it

especially this quickly

having said that the you know the the

weekly doesn't look quite as good i mean

this is kind of outside downside weak

looking it didn't fulfill that

technically speaking but

you know man that's not great price

action from the weekly chart

you know the volume has kind of dried up

the rate of change has stayed the same

but that's going to change

the more you stay here rate of change

will catch up in the short term

and yeah there is some pressure there's

not much open interest but the on buying

violence i mean this has been buying you

know there have been buying and

certainly

etfs have seen a lot of buying and a lot

of movement of money

this is still vulnerable and it tells

you that you know i mean gosh you know

the fed has the most ammo and that

should be the way this plays out but if

it doesn't okay then you have issues

i mean it suggests you could see sixteen

hundred dollar gold

all right this is where it gets tricky

we wanna make sure we don't miss the

next big move

but we still are not sure that we

haven't seen the bulk of a real what's a

real correction yet

all right so it really makes you you

know want to be a little more

you know touchy feely here and that's

what we've been and you know it that

costs money and

you have to wait to see how it plays out

don't think that it plays out to 1600

gold but i mean if the fed can do

nothing and the fiscal situation

becomes frozen that could be the

catalyst

you know keep an eye on the dollar i

mean it really i know that's easy to say

but the good news is like i said before

okay these are huge

prices now for the underlying contracts

you have a six percent margin

uh range here between the breakout pivot

and the breakdown pivot

and they're pretty well defined at this

point you know does that mean you can't

go down to 840 and snap back of course

you can i mean it's happening all the

time right now

but the point is this is pretty well set

up man costs six percent to play

use that number and plug it into your

role and risk reward you can manage the

risk

doesn't mean you're going to be able to

take huge size here if you don't have a

huge account so

that's why some of these stocks look

better the gold silver ratio

suggests silver looks better and it

really does and i like that because

you know in the next wave i think silver

should outperform if it's a dollar

slash the fed is on the prowl uh with

the dollar

type of move that's going to be better

for silver than gold it will bring the

monetary

value of silver out to shine and you can

see the kind of push here in the short

term on the dailies

for a new low here in gold silver which

is a new high in the favorability

of silver on a relative basis when we

look at it from here i mean this is very

well defined i mean because you haven't

really broken out of this pattern the

entire time

you kind of got up here to 26 13 but

you're not that far away this has not

failed

like kind of gold has and when you go to

the near term chart in fact it's held

really well

this is a higher low of technical

significance right

you penetrate the 100 day you really

never closed very far below it

if if at all more than a day and never

got close to even testing the 200 day

and you're in the zone between the two

fibonaccis

open interest is really low as volume

has been really low

you see a little pick up here it seems

you got some short covering there might

have been the pop

and then you're back down here the deck

is clear here the flight path is clear

here

and what you have is the double kill

zone correction

you're between the two fibonaccis

between the two moving averages

a higher low you take out 2613

and really the breakout here is still

intact you could say

the breakout in silver even with this

move down you could say it is still

intact

for sure above 2613 a mandate to be long

silver shift the focus from gold to

catch that breakdown now that the gold

silver is just doing what it's doing

it's failed twice already in gold and

that actually

you know raises the intensity for me

that it's going to work the next time

especially with the dollar coming in

play

on a rally that never happened and all

of a sudden it could crack here because

the fed's the only game left in town

sabine silver would be one of the

choices here

okay it was our pick at a dollar it's

almost three it's almost tripled here i

mean it's a major return to get some

some nice feedback from some of our

clients on this too who've made a lot of

money

on this strategy of picking some of

these lower priced you know silver and

gold mining shares

i like it right here this thing's perch

poised position we've only just begun

you know you got the breakout here you

re-test here here's the

two-year moving average i like the setup

there i like the shorter term setup too

i mean

look at what you have here in terms of

the 52 week and two week really

accelerating expanding here

you come down here and you find support

right in here below 250.

all right i just really like this stock

here i don't see any reason this thing

couldn't go to somewhere between

you know with a six handle maybe even a

seven you know so it's another double

from here

in sabina the other bonus pick this year

it's actually that that wasn't a bonus

picks arena but a bonus pick was

freeport mcmoran because it was out of

favor it was disinvested it had debt

issues he was almost going to die

at one point earlier in the year kind of

coming off it's a bad year over the last

two years since 2018. all right so this

didn't stop going down

i know it wasn't because copper is

because of the company on the other hand

it still is a major player and once you

secured the

you know the future of the company this

was like one this was a

gift and it really was down here we

started talking about it really

in here when it got like to nine dollars

it was the first time we i mean

even here but it was you know became a

buy when it made this higher

high here um and then you've kind of you

know

in tied to copper because we also threw

copper at you a couple weeks ago and

copper has played very well in fact we

threw copper actually a couple months

ago as well

higher highs higher lows stair stepping

it up the upside the moving averages

you know bullish and here you are perch

poison position this is a major

long-term breakout level here

there is a lot of sale and clear sailing

above 330

in copper uh when and if you get there

and that only supports freeport mcmoran

because you are still so low because of

the difficulties this company had

normally very tightly correlated to

copper you know became much much less so

and to reestablish that i mean this is

one of the reasons we said hey we're not

saying it's going back to 40. but this

thing could easily go

somewhere between 25 and 30 and our

first stop was 20 and you're there

much faster than we thought i mean we

were buying it back here like nine

dollars we're like

it could go to 20 and it seemed like

yeah that just seems like such a pipe

dream

and it's not the setup here on the

monthly chart was one of the reasons we

got along because this setup was just

beautiful really was technically

speaking and now the five year average

is turning up

i mean this thing could go to 40. you

know but i think you know

30 35 more realistic upside target kind

of over the longer haul

copper nickel you know the dbb by the

way another one we threw at you

new highs this week the dbb the base

metal power share

now freeport mcmoran i mean just a

confirming factor look at this

it's a 55 against the s p in the last 52

weeks

come on breaking out from record lows

double the bottom here too

above the two-year turning to the upside

back up of that .005 ratio spread

that where it was great value back in

2000

you got a good chance to pick up a good

company on the cheap there bitcoin was

our other bonus and man i'll tell you

what takes a lot of this thing out of

the trading gold it just does and

i don't know if there's you know

probably a lot of people out there don't

like bitcoin

listening you know to go guru but to me

it's not a currency

i mean it's it's a crypto commodity and

it's it has fundamentals you know that

are

a little more nefarious you know and of

course i'd much prefer gold created by

the universe one of the most rare

elements in the universe and created in

the last minutes now they're second

guessing whether it's a supernova or

another

uh or i forget what they call it it's a

gosh a killer nova is the new one now

that has something to do with the

uh the neutron stars when they get uh

i can't remember the the exact phrase

for them but uh

at any rate uh you know creating the

universe versus this you know the cyber

world but they're commodities and i mean

frankly

you know you're in places where you

can't necessarily exchange your dollar

your your currency for dollars your

currency for gold you can't get physical

gold it's not

easy to hold a ton of physical gold you

know

i mean there's risk to all of this

there's risk on both sides the risk of

holding you know

you know cyber crypto commodities you

know in the ethernet

world so to me and that's what i call it

you know but it is still a tradable

viable commodity that provides a similar

dynamic as does gold it's just that

simple

accept it and trade it for it and to

make money off it i mean come on

these things move and this has been a

great move we've been long and it's been

a great offset here's the

bitcoin gold ratio i mean it's almost

all the way back up to here like to

around 90.

now i think you've played catch-up i

think the fact that bitcoin's here now

really only intensifies the bullishness

from gold here and supports the chances

that gold takes out 1966. i think they

move together

i think there's value in that bitcoin

goes to 20 000 the equivalent moving

goal will be 22.50

that's what we think is coming next just

waiting patiently to try and capture the

move and i do believe silver

i do believe sabine in particular those

two

right in here you have the levels uh i

mean sabine is just a pie

you know and then just hold it the level

for silver clearly here is 26 13.

um do you have a pretty wide stop 3 50

cents is a huge stop

we hope to have a much tighter stop but

the fact of the matter is you get silver

above 2613 i am still gonna keep

plugging away because you know every

time

the odds go up that this will be a

breakout of significance

go guru for this week have a great

weekend