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Bear's Lair

Bear Markets always follow Bull markets and a severe stock market correction is long overdue. Bears Lair will spot, monitor and analyze the stock market correction as it develops.

 

Commodities have had a rough go lately, especially before this week. You couldn't open a financial newspaper or turn on CNBC without seeing endless bearish prognostications for raw materials' prices.

The globe is losing patience with leadership and management of the USGovt ship at sea.

Whilst this world's commerce still rotates on the unsteady axis of paper currencies, we will be subjected to a great deal of volatility and uncertainty.

Scenarios for the U.S. economy:

The Summer* doldrums are upon us with many investors more interested in the weather forecast than the markets.

At the G8 conference a few days ago, the President of Russia, Medvedev, pulled a "gun" from his pocket.

Despite a 40% market recovery and an abatement of the credit crisis, a climate of high fear abounds among market participants.

"Banking was conceived in iniquity and born in sin. The Bankers own the earth.

The technical trader looks at the market much differently than most. While many investors are confused when looking at charts which have been marked up by a technician, more experienced traders look at these charts as a map.




Sector timing commodities - Being able to trade different sectors is crucial for making a living in today's financial markets. One sector that cannot be over looked is the commodity sector.

Many are the obstructions to the so-called (mislabeled) deflation threat within the USEconomy. To begin with, falling asset prices does not constitute deflation.

Here is our monthly update on global indexes for our international investors.

Last week commodities moved higher as investors started buying into the recent pullback in prices. This is a healthy sign for the overall market.

It looks like the needed correction is now over for the precious metals and they are ready to move their way back up. Most commentators and traders remain bearish gold, but I am very bullish gold and their equities right now.

"The Poor Stay Poor & the Rich Get Richer"



IT'S THE ONLY GAME IN TOWN

If I told everyone that inflation is possible without increasing prices and without increasing the money supply, they could and would question my sanity. Yet, a large portion of the world's population is experiencing just that.

Despite gold and silver consolidating in June, investment demand for these precious metals remains robust. This is evidenced by continuing growth in the bullion holdings of the leading precious-metals exchange-traded funds.

In the past commodity trading was only available to trader with large accounts, high risk tolerance and a good understanding of how the futures market works.

China's recent veiled threats towards the establishment have been taken to heart. As China announced increased gold reserves from 600 to 1,054 tonnes it was an obvious warning.

Precious metals like silver and gold have pulled back to support levels and trending sideways. This week will be interesting as we watch prices bounce or breakdown.

Gold broke down and went into decline, as predicted in the last update posted early this month.

THE WEEKLY GOLD REPORT

Silver has endured a rather tough June so far. After peaking just under $16 on the 2nd, this white precious metal plunged 12% to just over $14 by the 15th.

For nearly 5,000 years, the price ratio between gold and silver has averaged approximately 15:1. This number is very close to the 17:1 ratio which represents the natural occurrence of the two elements in the Earth's crust.

Gold has provided two excellent trades for us this year; both had less than 3% downside risk. With any luck we will have another trade soon.

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Pure gold is non-toxic when ingested.

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