On another topic, market participants have been talking about the eerie similarity between the DOW in 1928-1928 and now (see chart below). With the Dow, Nasdaq and even S&P hitting record closes even in the face of the first Taper last week, the comparison of the two market indices may seem laughable to many bulls but Black Swan event needs no warning and that is why it is called a Black Swan. Severe market corrections do happen as history tells us unfortunately we will only know when we look back. Irrational exuberance has taken hold, major bears have bailed, some have even turned bullish. Market multiples artificially supported by 4 rounds of QEs and mountain heap of cheap liquidity, the big correction could just be around the corner. You know how sometimes one can smell the rain even though the storm clouds are still forming in the Pacific ocean, that is how I feel now about the state of the market. Buyers beware.
Precious metals have been under pressure since the very first hint of Fed taper this summer. Physical gold in particular is looking very attractive, here or $100 lower from here presents a very good entry point for the next leg up. I bought gold when it was $680 in 2006 (still own it, physical is not something I would sell), and I loaded up on Half Franklin at $9.98/oz of silver that same summer and sold them when silver hit $45. I like silver here, it has a commercial component and if I must be invested at this time, silver etf would be a good place to park some money short term. It also looks to be finding and building support here. I have been trading smaller silver miners as a proxy to the Silver ETF (SLV) and Silver Wheaton (SLW). Have also added to my 1 OZ silver eagle collection, although I rather not to have to pay for the $2-4 spread but coin dealers have to make money so I am cool with that. As for gold coins, supply seems tight at the local shop guess they have all gone overseas to the Chinese and Indians who have been stocking on them.
