{"id":23892,"date":"2013-12-03T09:31:53","date_gmt":"2013-12-03T14:31:53","guid":{"rendered":"http:\/\/www.ino.com\/blog\/?p=23892"},"modified":"2013-12-03T09:31:53","modified_gmt":"2013-12-03T14:31:53","slug":"closing-the-2008-gap","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2013\/12\/closing-the-2008-gap\/","title":{"rendered":"Closing the 2008 'Gap'"},"content":{"rendered":"<p>A disclaimer:\u00a0 I am long and\/or trading several regular 'bull stocks' (as well as short a couple).\u00a0 Don't interpret the sober message below as a 'sell your stocks right now!' style bearish warning.\u00a0 Indeed, after an expected choppy start to December I think more bull market mania, errr\u2026 rally, could still be ahead.\u00a0 But it would be just dandy if people would keep their perspective along the way.<\/p>\n<p>From the December 1 edition of <a href=\"http:\/\/biiwii.com\/wordpress\/about-nftrh\/\" target=\"_blank\">Notes From the Rabbit Hole<\/a> (NFTRH 267):<\/p>\n<p>In 2008 market and economic participants suffered a hard downside 'gap' in the prices of their assets and in the levels of their expectations.\u00a0 The bull market that began in March of 2009 is doing a fine job of closing that gap and fully resetting the herd from the utter fear mode of Q4, 2008 to a 2007 or even 1999 style greed mode today.<!--more--><\/p>\n<p>The chart of gold vs. the S&amp;P 500 [below] shows a gap up in 2007, presumably as Lehman knocked down the first of many dominoes that would fall until the previously inflated cyclical bull market totally fell apart in Q4, 2008 and bottomed in Q1, 2009.<\/p>\n<p>Gold is 'risk off' now.\u00a0 It is so risk off that many of its supporters are frightened of the monetary metal because today market risk is decidedly 'on', at the behest of policy making that has created a sea of liquidity going straight to equity assets.\u00a0 Think about that; people have been so thoroughly conditioned by the 'risk on' atmosphere of the current bull market that they are afraid of <i>insurance<\/i>.\u00a0 Insurance against what?\u00a0 Insurance against market risk and monetary policy induced systemic maladjustment.<\/p>\n<p>Gold has gone 'risk off' and that is where you want your insurance to be.\u00a0 You don't cheer lead and root for insurance.\u00a0 You hold it and hope it is not needed.\u00a0 That is what gold is and maybe the current situation for speculative minded gold bugs (i.e. just another flavor of casino patron) is filling a gap in their expectations as well.\u00a0 When enough people have learned that gold is about <i>value<\/i> only, not <i>price<\/i>, maybe this phase can end.<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/biiwii.com\/wordpress\/wp-content\/uploads\/2013\/12\/au.spx_.mo_.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-14906 aligncenter\" alt=\"au.spx\" src=\"\/\/biiwii.com\/wordpress\/wp-content\/uploads\/2013\/12\/au.spx_.mo_-500x222.png\" width=\"500\" height=\"222\" \/><\/a><\/p>\n<p>Visually, the gap in Au-SPX appeared after the system began unraveling in 2007.\u00a0 Is it so hard to imagine that the psychology (gap) of that time (as fear gapped up into what would become a historic market top and meltdown) should be 'closed' by the current bear market in sound thinking and bull market in risk taking?<\/p>\n<p>Gold stopped making higher highs and higher lows in SPX units a long time ago.\u00a0 It then triggered important moving averages down and has made some genuine technical signals that imply an end to its bull market and also I might add, a beginning to a new era of \u2018risk on\u2019 that by long-term signals at least, <i>appears<\/i> as though it has much further to run.<\/p>\n<p>Appearances\u2026 isn't that what the brilliant Bernanke Fed has been all about?\u00a0 Here is a picture of what most people thought they knew in 2008.\u00a0 It is Time Magazine's picture of a 1930's depression era soup line included in NFTRH #9, from November 22, 2008.<\/p>\n<div class=\"wp-caption aligncenter\" id=\"attachment_14907\" style=\"width: 389px;\"><a href=\"http:\/\/biiwii.com\/wordpress\/wp-content\/uploads\/2013\/12\/time.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-14907 aligncenter\" alt=\"time\" src=\"\/\/biiwii.com\/wordpress\/wp-content\/uploads\/2013\/12\/time-379x500.png\" width=\"379\" height=\"500\" \/><\/a><\/p>\n<p class=\"wp-caption-text\"><a href=\"http:\/\/www.time.com\/time\/\" target=\"_blank\">Time Magazine<\/a>, October 2008<\/p>\n<\/div>\n<p>NFTRH was launched in late September, 2008 just before the acute phase of the crisis and I considered myself lucky to have such great contrarian signals coming in clusters, day after day just after launch.\u00a0 It was the contrarian bullish opposite to today\u2019s developing bearish contrarian structure.<\/p>\n<p>From <span style=\"text-decoration: underline;\">NFTRH 9 (11.22.08)<\/span>:<\/p>\n<p><i>\"Okay, everybody\u2019s got the memo; deflationary depression it is. Well not everybody\u2026 I\u2019ll go with the old pros and stick to my story that there will be recovery \u2013 born of inflation \u2013 and there will be places to invest and places to avoid. With the entire world now expert on deflation and 1930\u2019s history, I have got to believe we have a huge counterparty of 'sissies'* waiting to take the other side of the trade.<\/i><\/p>\n<p><i>I personally believe any coming stock market rebound is a trade only <\/i>[ed., it was, as the bottom was ultimately in spring, 2009]<i> and things could get worse <\/i>[ed., they did]<i> before they get better. But if I were a deflationist I would be uncomfortable with the level the major media and by extension, the public are up to speed on the concept just as I was uncomfortable with every Tom, Dick and Harry on board the inflation express <\/i>[ed., in the run up to the 2007 top]<i>.\"<\/i><\/p>\n<p>So the point of NFTRH 267's opening segment is to simply remind all of us what is actually happening out there.\u00a0 Expectations have been realigned.\u00a0 In 2008 there were long-term technical breakdowns as well.\u00a0 For instance, the Dow and S&amp;P 500 each made lower lows to their 2002 lows.\u00a0 So gold (insurance, monetary common sense, what ever label you want to place on it) is breaking down in stock market terms and making big picture technical violations.\u00a0 Does this at least provide some context?<\/p>\n<p>The utter fear and angst of the 2008 time-frame is being corrected.\u00a0 Most people do not currently see it that way.\u00a0 They want to make 'coin' in stocks and now gold is not even on the radar of most people.\u00a0 I am not here to cheerlead insurance.\u00a0 I am here to point out that something opposite to 2008 is going on.<\/p>\n<p>If in 2008 the idea was to get separate from fearful masses and be bullish for coming asset price opportunities, should the idea today not be to think about getting separate from them again in their new guise as increasingly manic US stock market bulls?<\/p>\n<p><i>* 'Sissies' references an email note I received from my late friend Jonathan during the crisis.\u00a0 NFTRH's earliest subscribers may remember this\u2026<\/i><\/p>\n<p><i>\"Yes Gary, I spoke last night with one of the legendary street traders from the old days (pre 1990). He wants to leave Miami and work free at our shop because he has never seen a time when there is more money to be made the old fashioned way\u2026picking off the sissies.\"<\/i><\/p>\n<p><a href=\"http:\/\/www.biiwii.com\" target=\"_blank\">Biiwii.com<\/a> | <a href=\"http:\/\/biiwii.com\/wordpress\/about-nftrh\/\" target=\"_blank\">Notes From the Rabbit Hole<\/a> | <a href=\"https:\/\/twitter.com\/intent\/follow?original_referer=http%3A%2F%2Fplatform.twitter.com%2Fwidgets%2Ffollow_button.1384994725.html&amp;region=follow_link&amp;screen_name=BiiwiiNFTRH&amp;tw_p=followbutton&amp;variant=2.0\" target=\"_blank\">Twitter<\/a> | <a href=\"http:\/\/biiwii.com\/wordpress\/free-eletter\/\" target=\"_blank\">Free eLetter<\/a><\/p>\n<p>&nbsp;<\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>A disclaimer:\u00a0 I am long and\/or trading several regular 'bull stocks' (as well as short a couple).\u00a0 Don't interpret the sober message below as a 'sell your stocks right now!' style bearish warning.\u00a0 Indeed, after an expected choppy start to December I think more bull market mania, errr\u2026 rally, could still be ahead.\u00a0 But it [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":35,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1840,4273,23,2315,5946,5092,4785],"class_list":["post-23892","post","type-post","status-publish","format-standard","hentry","category-general","tag-biiwiicom","tag-gary-tanashian","tag-gold","tag-gold-chart","tag-gold-vs-sp500","tag-nftrh","tag-notes-from-the-rabbit-hole"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v23.6) - 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