is the current correction the "mini-ka"?

[jk]

2 questions:

1. is the current correction the "mini-ka," arriving somewhat earlier than expected?

2. whether or not it's the mini-ka, any theories/predictions about its course in terms of both depth and duration?

[Jim Nickerson]

Not a lot of action in the forums today--Tueday.

jk;

If EJ were to turn out to be correct in his predictions, then according to his graphical roadmap, it appears to me that the inflation and the discount rate have to get about double to where they are, before a deflationary period hits.

If you are worried about the equity markets going down a lot from here, take heart in that I am short them, so they will likely reverse and head for new all time highs.

The RUT is down 7 days consecutively, and I stopped looking back at my data to find another period when it has been down so long, I think NDX is down 6 days already, so there has to be a reversal tomorrow I would bet. Asia is or was up Wednesday, so the past week may be just a down zag.

Perhaps this down streak accounts for the little activity in the forums.

Jim

[jk]

what i'm really wondering about is how much metals will accompany equities in their [inevitable i believe] rout. my experience is that when the stock market really plunges EVERYTHING goes with it, including precious metals miners. [and the metals too?] i think this is a result of both a general flight to safety and also people liquidating positive positions to pay margin calls on their losers. my plan in that scenario is to hold onto my metals and hope i have the guts to add to them. a big, broad multimarket tumble will likely be part of a deflation scare.

[Jim Nickerson]

what i'm really wondering about is how much metals will accompany equities in their [inevitable i believe] rout. my experience is that when the stock market really plunges EVERYTHING goes with it, including precious metals miners. [and the metals too?] i think this is a result of both a general flight to safety and also people liquidating positive positions to pay margin calls on their losers. my plan in that scenario is to hold onto my metals and hope i have the guts to add to them. a big, broad multimarket tumble will likely be part of a deflation scare.

jk:

I chanced upon http://www.resourceinvestor.com/pebble.asp?relid=16024 which discusses your guru Hussman's research on the Gold/XAU ratio. The result in that when that ratio at 5 or above, it is a good time to buy things that emulate the XAU. That ratio is calculated for viewers at kitco.com/market/ down in the lower right corner.

At 12:30EDT it is 4.75. If my data are correct, using the recent highs in the Gold an XAU, the ratio then was 4.25. Both fall within periods in which Hussman suggests one should be long the XAU, so today is rather favorable to being long as I interpret Hussman's work and if I have my numbers correct.

Jim