Hedge funds slash bullish wagers on gold before war jitters
Speculators have reduced net-long positions by 3.6%.
My dad was a baseball star back in the hills of Missouri but gave it up when my mom told him, “It’s either me or the game.” My dad evidently wanted a left-handed son who was a ballplayer and loved the game as much as he did. So I guess that’s why I’m around, and no doubt the reason there’s a photo of me at age 3 with glove, ball, and bat in hand.
As a young man, my dad played ball against Mickey Mantle. He was not impressed and told stories about the kid being “just a wild-armed shortstop”. Contrary to a commonly-held opinion, I was not named after The Mick. Fact is, on the day I was born, my mom named me “Mickey” after some neighborhood kid that she especially liked.
But that did not stop me from choosing the New York Yankees all-star center fielder as my baseball hero, and when I first played Little League at age 7 the number 7 was sewn on the back of my uniform. From then on, if you wanted me to play on your team, I wore 7 or I found another team. Luckily as a kid and later on as an adult, I was good enough to demand that concession.
Long story short, 7 is my lucky number. There is nothing unusual about that as it is both the English- and Chinese-speaking world’s favorite number. 7 is also lucky in craps.
Plus the junior resource stock market.
Witness the following scan of a composite Vancouver Stock Exchange Index chart from 1986 thru 1989 and also a chart for the VSE and Toronto Venture Exchange Indexes from early 1991 to the present. I did not obtain a chart for 1990 but that does not deter from the patterns discussed herein:
Notice the junior markets hit major highs in every year ending in the number 7 before going into exponential freefall. I recently discussed the catalysts that caused these crashes and refer you to that musing for background information (Mercenary Musing, December 14, 2014).
The reasons for this curious decade-long cycle, much like the junior resource market, are highly speculative in nature but could include the following:
Regardless of the reasons, the above charts stand as evidence that for the past three decades a junior resource market top occurred in years ending in 7.
In early March of 2015, the Toronto Venture Exchange will be a full four years into the latest bear market cycle. Other than the predictable new year rebound in micro-cap resource stocks that I discussed last week (Mercenary Musing, December 24, 2014), there is little evidence in sight for a near-term recovery.
However using past as prologue, I can speculate the junior resource market will repeat its10-year cycle that resulted in market tops in 1987, 1997, and 2007. If this indeed happens, the scenario could include a bull beginning sometime in 2015, a strongly performing market in 2016, and an exponential rise to a top reached in 2017. This would be followed by a one-time catalyst that would send the market cascading downward in 2018.
I realize this is a pie-in-the-sky prediction at the present juncture, but offer it up to illustrate an undeniable point to you:
By employing a contrarian philosophy of buying select stocks when they are unknown, unattractive, unloved, and undervalued by the greed and panic-driven sheeple, smart money speculators can position themselves for the inevitable bull market that will occur sooner or later.
And make a fortune whenever that comes to pass.
Will 2017 be another golden year for us?
No one knows but remember folks, the baddest bears beget the biggest bulls. I encourage you to position now for the next bull market.
