Context for all the VIX hype

(Plus a gold & silver update)

SD Exclusive: Much has been said about the VIX lately, especially surging over 44% today alone. How about a little perspective though? There are two issues that signal this stock market is going higher.

First, VIX is already in extreme territory of over 80 on the RSI. Technical analysis would say the move is pretty much done for now. Look at the last two events, President Trump and Brexit. The RSI is higher today than it was during either of those events:

 

 

Now, nuclear war doesn’t have anything on four years or breaking up with the European Union. However, how much higher can “fear” surge on the Relative Strength Index? Not much. And to put that into  perspective, there’s this:

 

 

 

Secondly, that’s the VIX and the Dow. The chart pretty much speaks for itself. The August 24th “crash” of 2015 was showing a VIX above 50, and today, well, we’re above 16. Also. The Dow is over 7,000 points higher that it was in 2015 on that Black Monday 2.0. How far is it gonna fall with VIX running out of steam.

There is either going to be a massive, major blow-off top, or, the stock market could be poised for a massive “rip-your-face-off” power surge to the upside that blows recent surges out of the water. We’ll see, but if I we’re thinking the stock market was ready to crash right here and right now, now might not be a good time to be buyin’ up a bunch of put options.

And for our metals? Well, gold and silver have room to run. The precious metals are not overbought, and they are looking strong:

 

 

 

I wouldn’t get my hopes up for $1300 tomorrow, or even $17.50, because how this year has unfolded, and tomorrow will most likely be a bunch of “meh” in the markets overall. But then again, well just see how Europe and Asia pan out.

It is not, out of possibility, however, that we could see a surge in silver. Last year at this time, when silver was peaking out before getting smashed back into oblivion, the white metal was $20.50. So even on price we have a way to run. Gold too. With the Brexit surge and the Trump surge (before the smash), a $50 to $100 in the yellow metal might be coming at any moment. But like I said, I’m not gettin’ my hopes up.

I guess will just have to wait and see how the whole North Korea thing is working itself out, and I could be and probably am WAY off-base, but, I wouldn’t want to be caught in new short positions on anything in stocks right now. Even if DB, SNAP, APRN, are SNAFU.

As per tradition, we will be out with our Friday Market Wrap and SD Weekly Metals and Markets, and they are both gonna have an extra heaping of awesome this week.

 

 

Silver Price Charts

    • I’m waiting for the Commercial Monkey Hammers to get naked and streak through the trading floor with $10 Billion of fiat to short the metals.

      That always scared the PM people and slams the price…

      Wait for it!

    • No No No,

      Please keep your over priced worthless paper stocks and DON’T buy PM.

      I’m Stacking here and I don’t want prices to rise, thank you

    • It is entirely possible to own BOTH stocks and PMs.  Those of us who do have not had a bad time at all during the past 7+ years.  What was “lost” in PMs was gained in stocks… and then some.  Maybe during the next round of collywobbles, this will reverse?  But the bottom line is still the bottom line and anything that feeds the bottom line is good over the long term.  🙂

       

    • That’s what I told my coworkers but nobody wants to listen. I have learned in life that I am NOT good at persuading people and secondly I have an uncanny intuition that is quite often correct.

       

       

       

    • Yeah Peter Schiff mentioned that the Swiss National Bank chose to no back the currency with any gold, but it holds about $8 Billion of Apple Stock.

      What could possibly go wrong with that bet?

    • @Charles Babbage
       

      Intuition can be an amazing thing.  Some refer to this as their “gut” but it’s pretty much the same thing.  The human brain is an amazing data processor.  It continues to work, day and night, often without any direction from us.  Some would call this the sub-conscious mind.  Whatever it is or is called, it can derive answers to some pretty tricky problems.  Even though it is not vocalizing its findings, we do pick them up anyway as feelings.  In most cases, these feelings should be recognized for what they are and we should pay attention to them.  I have done that for a long time and it has saved my life twice.  The few times I ignored “the gut”, I came to regret doing that because the gut was right and I was wrong.  A few slaps upside the head and even the thickest skull among us will be penetrated by the truth of this.

       

  1. Well… we made it through the night w/o a slam… and the stock futures are pointing down.   The Fed must be on holiday… or too busy trying to save the bond market… or maybe pumping the cryptos.

    I am feeling the confusion of an unloved abused wayward bastard child… please hit me again.  I don’t deserve higher pm prices.

    • Yep, that would be it.

       

      But then, there is another way to buy PMs and that is to dollar cost average your purchases.  To those not familiar with this, it means to buy a fixed amount of silver, gold, or both at some regular time interval, while pretty much ignoring all the noise in the PM market, politics, etc.  In my case, that would be quarterly, so each quarter I take my fixed amount of money and make a buy of silver or gold and sometimes both.  If prices are down, I add a little extra money to that buy, say 10-15%.  When prices are up, I buy a little less that quarter, again, say 10-15%.  Over time, this results in a very nice stack at a fair price.  There is a built-in bias in this towards more ounces and lower prices.  Over long periods of time, this really helps, both in the number of ozs. acquired and in the cost of those ozs.

      At NO time ever is fear or greed involved as a director of what I am doing.  Neither of those ever helps the investor make rational decisions but they can contribute substantially to making poor decisions.

       

    • @jbwhitco

       

      You’re welcome.  Other replies to this were similar or the same as mine.  BTFD has been a common expression in the PM community for some time now.  But then, there are always expressions that do not make any sense to some.  For me, it is the expression “crickets” when someone is asking for and not getting an answer.  I have no idea WTF insects have to do with conversations or answers.  Oh, well…

       

    • Agreed @DanDaley

       

      In addition to poor grammar, poor spelling is also the mark of the uneducated.  Such people are seldom good choices for getting financial advice.  I’m not denigrating anyone for not going to college or having various degrees.  There are other ways one can educate themselves.  Reading a lot is one of the best ones.  My father in law was one of the smartest guys I ever knew, despite the fact that all he had was a high school education.  He did not let that stop him from learning on his own.  He was always reading something: newspapers, magazines, books, etc.  He was a man of few words but when he chose to speak, it was always worthwhile to choose to listen.

       

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