Metals continue the bull run. We expect to see $700 on gold in the very near future. Geopolitical and world economic events coupled with the normal supply and demand equation have this market poised to make a run at the infamous Hunt Brothers high back in the early 80’s.
First we of course need to test the highs from earlier this year and I expect that to happen sometime in September. Look for volatility to expand here as well. We are likely to see some sort of shake out in the not too distant future so keep trailing those stops. Any dip should be cautiously bought and here too I must recommend doing that dip buying via options to keep risks in check.
Copper could find some resistance in the near term as we near $400 but this resistance will not hold in the long run so once we get a clear break out signal we will let you know.
by Derek Frey
Bull Run market
A bull run market is a period of generally rising prices. The start of a bull market is marked by widespread pessimism. This point is when the “crowd” is the most “bearish”. The feeling of despondency changes to hope, “optimism”, and eventually euphoria, as the bull runs its course. This often leads the economic cycle, for example in a full recession, or earlier.
Examples
India’s Bombay Stock Exchange Index, BSE SENSEX, was in a bull run market trend for about five years from April 2003 to January 2008 as it increased from 2,900 points to 21,000 points. Notable bull markets marked the 1925-1929, 1953–1957 and the 1993-1997 periods when the U.S. and many other stock markets rose; while the first period ended abruptly with the start of the Great Depression, the end of the later time periods were mostly periods of soft landing, which became large bear markets. (see: Recession of 1960–61 and the dot-com bubble in 2000-2001)
Bear market
A bear market is a general decline in the stock market over a period of time. It is a transition from high investor optimism to widespread investor fear and pessimism. According to The Vanguard Group, “While there’s no agreed-upon definition of a bear market, one generally accepted measure is a price decline of 20% or more over at least a two-month period.”
Examples
A bear market followed the Wall Street Crash of 1929 and erased 89% (from 386 to 40) of the Dow Jones Industrial Average’s market capitalization by July 1932, marking the start of the Great Depression. After regaining nearly 50% of its losses, a longer bear market from 1937 to 1942 occurred in which the market was again cut in half. Another long-term bear market occurred from about 1973 to 1982, encompassing the 1970s energy crisis and the high unemployment of the early 1980s. Yet another bear market occurred between March 2000 and October 2002. Recent examples occurred between October 2007 and March 2009, as a result of the financial crisis of 2007–08. See also 2015 Chinese stock market crash.
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