Gold and silver uptrend still intact but odds favor short term peak this week in cycles by Bill Downey

INTRA-DAY NEWSLETTER ~ June 24 2014

Consumer Confidence Surges To Highest Since Jan 08; Under-35s At Lowest In 2014
Submitted by Tyler Durden on 06/24/2014 - 10:08

The American consumer has not been as confident as this since January 2008... can you feel the confidence? The biggest driver of this confidence appears to be the spike from 79.7 to 99.5 in the Pacific region's confidence... but plunged in the Mountain and Central regions. Only 26.7% believe stocks can fall from here - near the lowest since 2009. Furthermore, those aged under-35 saw confidence plunge to 2014 lows.

New Home Sales Surge By 18.6% In May
Submitted by Tyler Durden on 06/24/2014 - 10:26

New Home Sales report, showed that in May new home sales soared by a whopping 18.6%, orders of magnitude above the 1.4% increase expected, and resulting in some 504K new houses sold, far above the 439K expected, and certainly above the downward revised April print of 425K. What caused this surge? Simple: the West, which saw a 34% surge in new home sales, from 97K to 130K, the highest one month jump since February 2013.

Dubai Stocks Crash On Levered Liquidations, Margin Calls Turmoil
Submitted by Tyler Durden on 06/24/2014 08:22 -0400

Long before there was a Greece (and its existential threat to world order), there was Dubai's sovereign crisis in 2009 with Nakheel; and Dubai World (the floating islands) faced with massive debt loads and interconnectedness were bailed out. Since then it's been nothing but ponies and unicorns... until now. The debt is all still there (and the interconnectedness)... and despite the mirage of wealth creation that equity's massive rally has created, the drop in Dubai's stock market turned into a rout overnight as it dropped a further 8% as one of the countries largest companies (Arabtec - Dubai's largest builder) plunged after high-level executive dismissals. “This is indiscriminate selling,” Ramez Merhi, director of asset management at Dubai-based Al Masah Capital, said by e-mail. “The markets took the stairway up, and an elevator down.”

As Bloomberg reports,

Dubai stocks dropped the most in 10 months following top-level dismissals at Arabtec, the United Arab Emirates’ largest-listed builder.

Arabtec dropped 9.8 percent to the lowest since January after the company confirmed it cut staff. People familiar with the matter said yesterday the company’s chief operating officer, chief information officer and chief risk officer have been fired.

The builder’s shares plunged 53 percent so far this month as Abu Dhabi state-run Aabar Investments PJSC cut its stake, stoking speculation the builder was losing government backing.
“Selling pressure on Arabtec is causing margin calls on retail investor accounts, hence the big move down across the U.A.E. as a whole,” Nayal Khan, head of institutional sales and trading at the Naeem Holding brokerage in Dubai, said by e-mail.

“The market wasn’t able to resist the turmoil that has been triggered by Arabtec,” Montasser Khelifi, senior manager for global markets at Quantum Investment Bank Ltd. in Dubai, said by e-mail. “At this level we’re starting to see good buy opportunities, but this doesn’t seem to be the opinion of the majority of the market players.”

“This is indiscriminate selling,” Ramez Merhi, director of asset management at Dubai-based Al Masah Capital, said by e-mail. “The markets took the stairway up, and an elevator down.”
The world's sovereign debt crises started in Dubai so it would be somewhat ironic if the central planners' bubble would start to crack first in this construction-bubbler-prone state.

Keeping things in perspective, the stock market is up 110% in the last 20 months and so far has lost ½ of that gain since the beginning of May.

Cycles
The short term Blue cycle is completing on June 27th (Plus or minus 72 hours). That is the standard deviation that allows this cycle to be ever present and not go away. The other factor, the inversion, is the other thing that allows it to remain as a cycle that doesn’t go away simply because it introduces the ability to play out differently on different occasions. A great example of the inversion is when we see HIGHS occurring at the blue cycle. This most often is a bear market rally. But note how the massive congestion in April/May allowed the ROTATION to change to the BLUE cycle making lows and the red cycle making highs. This is the inversion that takes place that hides this natural cycle that has been ever present since the dawn of mankind.

The thing that is most important is when the BULL MARKET really does return, odds are 95% that the blue cycle will provide the lows and the red cycle the highs.

Look at the 2014 rally, the BLUE cycle was making the highs warning us that it wasn’t the real deal yet. Now the current rotation is what we want, but it can invert again and will do so until the real bull arrives. Even then, we will get on average 1 to 3 rotations per year. While these cycles are not perfect the fact is they CAN’T BE PERFECT. Then everyone would know exactly what to do. What is good is every date in the future is already established for both cycles and so is every date for the medium term cycle (yellow highlight).

The next short term cycle is due to peak this week, June 27th (plus or minus 72 hours) and so the window is open for a turn. Odds are 75% we will peak and move lower into mid-July. IF that develops, the upturn in gold will still be in play. But beware, July could shake the bulls.

Gold Chart
After three days of consolidation, Gold reached 1326, our listed resistance last night and just under the trend line. The momentum line now is key short term. If we lose that then support goes to 1302-1310 but more importantly, it may be the beginning of the short term peak. Resistance is 1322-1333 and 1342-1350.

Silver
Silver reached 21.17 and is above the resistance line. IF WE CLOSE BACK BELOW 21.80 it may be the clue that the short term peak is here. Support is also at 2060 and at 2030-2040. Resistance is 2138-2148. The Feb high at 2122 is also resistance and that is what probably stopped silver today at 2117. AS LONG AS SILVER HOLDS that TREND line the up move is still in play. Allow up to 10-13 cents below it to be sure.

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