Are We In The Final Run To Lower Lows – Or Will The Market Offer Another Fake Out?

After perusing much of what is being said about the metals market and the Fed this past week, three words come to mind:“G-d help me.” 

I have seen articles this past week that suggest the investment world is delusional.I have seen articles suggesting that the only thing we need to do is listen to the Fed to know which way the market is going. And, if you count your own perspective amongst these “common beliefs,” then G-d help you too. 

The only reason someone believes the rest of the market is delusional is because the market is moving in the opposite manner in which they believe the market should move.And, anyone that thinks we need to listen to what the Fed says in order to understand the appropriate directional moves of the metals market was clearly not listening to the Fed in 2012-2015, or was simply on the wrong side of the market. 

What I have seen over the last week that is truly delusional are articles, as well as comments, by “believers” that QE was the Fed’s plan to sink the metals.And, I have seen this perspective written by several analysts and commenters of late.So, let me get this straight.These same “believers” were strongly looking skyward in the metals market in 2012 after the announcement of QE3, expecting QE3 was going to launch the metals rally.And, when the metals reacted in the exact opposite manner in which they expected at the time, now they believe that QE3 “caused” the decline in the metals!?Moreover,many even believe it is part of some insidious plan to suppress gold being orchestrated by the Fed.Good grief.Is there any intellectual honesty left in this market?   

Whether you like it or not, markets rally and markets correct.And, no matter how much QE the Fed throws at the market, no matter what the Fed does, the market is going to complete its correction before it begins its next bull market phase.And, guess what?When the market begins that next bull market phase, all those claiming that the market is manipulated will fall by the wayside because when the market is going up there is no “manipulation.”Right?

I would like to quote R.N. Elliott, who outlined this phenomena within markets so well:

“Civilization rests upon change. This change is cyclical in origin and characteristics.A rhythmic series of extreme changes constitutes a cycle.When a cycle has been completed, another cycle is started.The rhythm of the new cycle will be the same as that of the previous cycle, although the extent and duration may vary.The cycle progresses in accordance with the natural law of movement.”

“The causes of these cyclical changes seem clearly to have their origin in the immutable natural law that governs all things, including the various moods of human behavior. Causes, therefore, tend to become relatively unimportant in the long term progress of the cycle.This fundamental law cannot be subverted or set aside by statutes or restrictions.Current news and political developments are of only incidental importance, soon forgotten; their presumed influence on market trends is not as weighty as is commonly believed.”