Gold & The Most Remarkable Thing I’ve Seen In 50 Years

Gold & The Most Remarkable Thing I’ve Seen In 50 Years

With oil surging to $108, and the Dow Jones hitting all-time highs, today one of the savviest individuals in the business spoke with King World News about gold and the most remarkable thing he’s seen in 50 years.  Jeffrey Saut, who is Chief Investment Strategist for $360 billion Raymond James, also discussed stocks hitting all-time highs, the panicked shorts, and included a truly fascinating gold chart along with his comments.

Saut:  “Today is day 137 of the longest buying stampede I have seen in my entire 50-year career, and possibly in history.  The previous record I have in my 50 years of notes ended at 53 trading sessions.

We have not had four consecutive down days for the Dow so far this year.  But I think we are nearing an intermediate-term top.

“For the past two and a half months I have targeted tomorrow, July 19th, as the intermediate-top on both my quantitative timing and technical models.  So I think tomorrow is the potential turning point for the first meaningful decline of the year.  I have been raising cash for the past few weeks and I think this correction in the stock market will be roughly 10% to 12%.

It’s just a question of, is this thing going to end with a whimper, or is it going to end with a bang?  The shorts have been absolutely destroyed here.  We could see a blue-heat move that carries the S&P 500 somewhere between 1,700 and 1,730.  That would be the ideal pattern, but they don’t operate the market for my benefit so you have to take what they give you.

I don’t think anybody can time the market on a consistent basis, but if you listen to the message of the stock market you sure as heck can decide when you should be ‘playing hard’ and when you should not be playing as hard, and so I’m not playing that hard right here.”

Saut included a fascinating chart when asked about gold, and here is what he had to say:  “I don’t think there is any rush to get into gold.  I’ve said this to you before, gold is like a heart attack patient -- it’s not going to get up off the gurney and run the 100-yard dash.  So I am watching gold, but am I participating in gold the way I did from 2002 to 2008?  No.”

Eric King:  “What will signal to you that gold has in fact hit a bottom and it’s time to go long?”

Saut:  “I have some proprietary logarithms that target things very well (see chart below).

 “Right now gold is still showing red on my chart.  The logarithms don’t get the lows or the highs, but when things start trending they tend to keep you in a position.  You can see from the chart above that gold was clearly on a buy signal at around $800 in 2008, and got a few sell signals at roughly the $1,700 level.  So gold continues to show red as is has for over a year now.”
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