By: Jordan Roy-Byrne CMT, MFTA - 21 December, 2018
The past 65 years of history shows us that in almost any context (but not all) the time between the Fed’s last rate hike and first rate cut is exactly when you want to buy gold stocks. We don’t know if December is the last rate hike. No one does. What we do know is the stock market is approaching an extreme oversold condition and is likely to begin a counter trend rally very soon. Full Story
Many “experts” warn that the dollar will collapse and lead to global economic turmoil. In this scenario, investors would rush to other currencies to escape further losses. Global trade would seize up because the majority of international contracts demand a dollar payment. Other assets would skyrocket. The worst-hit would be currencies like the euro, yen, and the yuan. Gold prices would soar. Interest rates in the United States would rise as demand for Treasurys fell. Full Story
I have to admit that the action in Gold of late has been exciting. After dumping post the FOMC meeting on Wednesday, Gold came roaring back yesterday and then some. It closed at its highest level since July. What is more interesting is: why? It is this that will determine whether we head higher or not. The following are what I believe may be the drivers of Gold’s recent renaissance. Full Story
The dovish Federal Reserve lit a fire under gold and its miners’ stocks this week. As universally expected the FOMC hiked rates for the 9th time in this cycle. But it also lowered its 2019 rate-hike outlook bowing to the stock-market selloff. Traders dumped gold initially thinking that wasn’t dovish enough. But market reactions to the FOMC form over a couple days, and gold surged overnight. Its post-Fed rally has great potential. Full Story
The stock market is technically broken, bounce or no bounce. We have been on that course for months now, with the January 2018 upside blow off designated as the sentiment-based “bull killer”. I am going to try to play it as best as possible (if the thing would just bounce I’d consider increasing shorts), but I don’t see this as a game. I don’t have a gambler’s constitution. This is a system purging itself (at best). Cash (paying another +.25%) remains the best option in my opinion. Full Story
One of the largest conferences of the year just wrapped up this past weekend in Katowice, Poland. And it was on everyone’s favorite subject, climate change. Yes, this is the annual conference where tens of thousands of delegates fly into a foreign town. On your tax dollars. To iron out a plan for the future of the planet. Full Story
The price of gold cannot decline and stay below the gold production costs. Myth or fact? We invite you to read our today’s article about the mining costs and find out whether they provide a floor for gold prices. Full Story
Part II the talk with founder of the Trends Research Institute and Globalnomic® Trend Forecaster Gerald Celente includes 4 key trends. Higher interest rates, oil prices, social unrest and war rate high on the watchlist. The economic recession in the Crimea region could ignite conflict between two powerful former allies, Ukraine and Russia. Full Story
Yesterday I posted this daily chart for the UUP suggesting that it could very well be building out a new uptrend channel with the current price action trading at the top rail where it has been chopping out the small blue rising wedge. Today we are getting some follow through to the downside. Full Story
There is no better way to describe what is currently taking place in the U.S. Shale Oil Industry, then a bloodbath. Unfortunately, if the situation wasn’t bad enough for the shale oil industry when prices were 30-40% higher, today it’s a complete disaster. While some might think that a bit of an overstatement, I can assure you that these low oil prices are doing serious damage to an already weakened shale industry. Full Story
We’ll be hearing a lot more about the “death cross” in the days ahead, mostly from business-channel pundits who know as much about stock charts as you and I do about particle physics. The death cross occurs when a trading vehicle’s 50-day moving average falls beneath its 200-day moving average. It usually signals a big selloff ahead. Full Story
Bloomberg posted an article this morning describing the Collateralized Loan Obligation market as “Wall Street’s Billionaire Machine.” But I seem to recall that the CLO market was one of the financial nuclear bombs that blew up and triggered the financial system de facto collapse in 2008. Well, it’s back – with a vengeance. Full Story
The Fed blinked – but didn’t flinch away from another rate hike. On Wednesday, Federal Open Market Committee (FOMC) policymakers rejected President Donald Trump’s call for a pause. They raised their benchmark rate by a quarter point to a range up to 2.5%. Full Story
Gold and silver are not always the best vehicles for preserving purchasing power. Their prices increased from 2002 to 2011, but fell after 2011. The stock market has boomed since 2011 while gold and silver fell. Because stocks have begun their bear market and gold and silver prices have bottomed, moving capital from stocks to gold and silver is sensible. Full Story
Before Trump was even inaugurated, I said he was clearly draining the swamp directly into the White House. That was obvious as soon as he nominated a Goldman-Sachs roster to fill all the financial cabinet positions. Some wishfully said he was playing 4-D chess by keeping his enemies close. I called baloney. He was simply being Sached. One of those from the Goldman roster was Steven Mnuchin. Full Story
The “BOND BEAR MARKET!!!” stuff ran very hot on this cycle as the 30 year yield broke the Continuum’s limiter (monthly EMA 100) before failing over the last few weeks (to the surprise of many, but not us ;-)). As I have noted previously, in my opinion the Fed does not want a bond bear (breakout in yields) or its running mate, a breakout in inflation expectations because the Fed is an inflation machine. But it has inflated against this pleasant continuum of declining yields over the decades that has encompassed the entire training of most of us as market participants. Full Story
As part of Merk's in-house research we regularly evaluate a consistent set of charts covering the economy, equities, fixed income, commodities and currencies. The aim is to keep our eyes open and to look through the noise of the headlines, avoiding the distractions of sensationalized click-bait. In sharing this content, we offer a cross-check to your own thinking and aim to add value to your own process. Full Story
The implication is thus rather bearish for gold. We mean here that, of course, we could see an usual rally in the aftermath of the December FOMC meeting, when the dust falls and precious metals investors enter the new year with fresh hopes. However, although the Fed became more dovish, which is fundamentally positive for the gold market in 2019, the change was less dovish than expected, and deemed by the market to be not dovish enough. Full Story
Fed monetary policy inched toward suicide Wednesday with a 25-basis-point rate hike and a feint toward bumping up interest rates two more times next year. Are they trying to make certain that Trump doesn’t get re-elected? This interpretation is sounding less farfetched each day as the banksters continue to flout a global economic storm that is gaining strength by the week. It is manifest in the faltering economies of Germany and China, but also in the U.S., where the housing and auto sectors have begun to implode. Full Story
Last week, we succinctly laid out for you what to expect for the end of this year and into 2019. Though, there are many reasons for optimism regarding higher precious metal prices next year, understand that The Banks are already taking steps to fight us every step of the way. Full Story
Over a year ago in this space, you may have read my rationale for not closing out core metals and mining stock positions after the May 2011 intermediate top (which turned out to be a longer term!) in the resource sector. (By the way, David Morgan called that top to his subscribers -- to the day.) I held those positions in spite of having written down on paper a decade earlier my intent to do so, "win, lose, or draw." Full Story
On the cusp of a new year, season 13 of Goldseek.com Radio, the head of The Morgan Report rejoins the broadcast with unique insights on the financial markets. David Morgan notes gold and related shares could benefit from the correction in US shares as investors redirect profits into safe haven assets to better balance portfolios. As the US Fed continues to ratchet up rates the price of money keeps escalating, pressuring shares of corporations that participated in buybacks via cheap debt. Full Story
Commodity traders appear excited about gold again as stocks are on pace for their worst year since 2008, and their worst December since 1931. Bullish bets on the yellow metal outnumbered bearish ones for the week ended December 11, resulting in the first instance of net positive contracts since July, according to Commodity Futures Trading Commission (CFTC) data. Full Story
As part of Merk's in-house research we regularly evaluate a consistent set of charts covering the economy, equities, fixed income, commodities and currencies. The aim is to keep our eyes open and to look through the noise of the headlines, avoiding the distractions of sensationalized click-bait. In sharing this content, we offer a cross-check to your own thinking and aim to add value to your own process. Full Story
I’m prone to remind readers from time to time that I don’t have a crystal ball. Although I hit forecasting bullseyes often enough, this feat is just a cheap parlor trick for anyone even a little bit familiar with the Hidden Pivot Method. Under the circumstances, I probably shouldn’t be too disappointed when the crystal ball I insist that I don’t have fails me. Full Story
How could it be that men can stop killing each other for a day after five months of mutual slaughter on the battlefield? Nor did they merely take a time out, but fraternized, much to the displeasure of their high command. They exchanged gifts, played European-style football, and generally behaved like men do when they get together during peacetime. Were they suffering from a form of psychosis? Full Story
JPMorgan Chase will stop a large number of silver shorting activities, but the data shows that the short-selling by eight traders led by the bank is still equal to 200 days of world silver production, only one day less than a month ago. It seems that the GATA revolution has not yet succeeded and must continue to work. Full Story
The last few years of the Everything Bubble were driven by the ultimate dumb money: corporations borrowing to buy back their stock at record high prices. A whole generation of CEOs and CFOs were able to pad both their reputations and their year-end bonuses this way while, it seemed, blatantly screwing over their employees and other stakeholders. Full Story
The US stock market continues to implode. At the same time, precious metals, bitcoin, and the Indian stock market are acting as superb safe havens. Note the positive bounce from buy-side support at $1237, and the inverse H/S bottom pattern. A fresh rate hike from the Fed tomorrow could crush the stock market again, but if there’s no rate hike, that could also crash the stock market. Full Story
Interesting in terms of my own predictions for 2018 is what Gundlach says about how “the global stock market peaked on January 26 and so did the New York Stock Exchange composite.” He lists other sectors of the US market that started to roll over right after that January global crash and then says that in the summertime the US got down to just the five FAANG stocks and then only two of those, “and then Amazon gave it up” and “then Apple gave it up. That was kind of the last straw.” Full Story
It's not clear whether gold and silver mining companies would qualify as participants in the lawsuits. Such lawsuits have been construed to be open only to those who traded gold and silver futures contracts during specified periods. But gold and silver mining companies, especially producing companies, sometimes trade futures to hedge their production and other financial obligations, so they might qualify. Full Story
Investors will be surprised to know the main factor that drives the gold price. And no, it isn’t the oil price or market. While the oil price has been a good indicator for the gold price over the past 50+ years, it hasn’t done much over the shorter term. However, there is a gold market demand factor that seems to move the gold price more than any other indicator. Full Story
Unlike the rest of the world, we define inflation as monetary counterfeiting. We do not put the emphasis on quantity (and the dollar is not money, it’s a currency). We focus on the quality. An awful lot of our monetary counterfeiting occurs to fuel consumption spending. And much of this, certainly a very visible part of it, is government borrowing to pay for the welfare state that is not supported by taxation. Full Story
The central bank is expected to tighten one more time this year, but there are reasons to think such ‘expectations’ don’t actually exist — that they are merely being assumed by a mainstream media too lazy and stupid to provide a statistical basis for them. If the Fed “surprises” by not tightening — presumably because they, too, can see that the stock market is falling apart, and that Europe and Asia are sliding into recession — it will send U.S. shares soaring on Wednesday. Full Story
Powell seems to be currently the only potential trigger of the yellow metal’s rally. But he would have to change into a dove. Which is not so simple. Stay tuned – on Thursday we will analyze the implications of the December FOMC meeting on the gold market for you. Full Story
So, whether the government gets shut down or not, the market is in a precarious posture at this point in time. Moreover, it seems many who were not following our analysis about what the break of 2880SPX means to the market and did not see this potential drop coming are now trapped in their longs, wondering what to do, and hoping for a rally. Unfortunately, “hope” is probably the most dangerous four-letter word in an investor’s lexicon and the market may provide more pain to them before any rally is able to take hold. Full Story
Gold mining investors and Canadian capital markets received an early Christmas gift last Friday. Wheaton Precious Metals, one of the largest precious metals streaming companies in the world, announced that it reached a settlement with the Canadian Revenue Agency (CRA), the equivalent of the IRS. Before now, Wheaton had been in an ongoing legal feud with the agency over international transactions between 2005 and 2010. Full Story
The Fed probably will implement another 0.25% rate hike this week, but at the same time it probably will signal either an indefinite pause in its rate hiking or a slowing of its rate-hiking pace. The financial markets have already factored in such an outcome, in that the prices of Fed Funds Futures contracts reflect an expectation that there will be no more than one rate hike in 2019. However, this doesn’t imply that the Fed is about to stop or reduce the pace of its monetary tightening. In fact, there’s a good chance that the Fed unwittingly will maintain its current pace of tightening for many months to come. Full Story
Founder of the Trends Research Institute and Globalnomic® Trend Forecaster Gerald Celente returns with the economic forecast for the new year. $1,200 is the floor for gold - once the bulls push the price over $1,450 the sea change in sentiment could ignite an ascent to a new record over $2,000. In part II of the discussion, Peter Schiff, head of SchiffGold, Euro Pacific Capital, and Euro Pacific Gold Fund (EPGFX) offers his latest insights. Gold and related precious metals markets are building a base for the next big bull run, similar to palladium, projected by the host to surpass gold. Full Story
The bottom line: We may have just seen the first real bear market counter-trend rally in the builders when the DJUSHB jumped 15% over three months. If the 10yr continues to drift lower, we might see one more push higher. Full Story
The President will almost certainly make concessions and jack up deficit spending in order to get Democratic support for some of his other agenda items. Next year’s budget deficit could be a whopper -- particularly if there is an infrastructure program with bipartisan support. Another surge in spending could frustrate the President’s conservative base, who urge him to reject bloated budgets for the Deep State that fund everything but the wall. Full Story
The best performing metal this week was palladium, up 1.41 percent, though hedge funds cut their long position to a three-week low. ICBC Standard Bank, however, sees palladium hitting $1,500 an ounce by 2020. Gold traders and analysts were mostly bullish on the yellow metal this week on concerns about a potential U.S. government shutdown and ongoing uncertainty around Brexit, according to the weekly Bloomberg survey. Full Story
The Big Bear is back. Ursa Major is in the house of the rising sun, and Taurus is in the house of the setting sun. Those are bad signs for investors who are now daily diving into their horoscopes. The market is pouring out of an inverted Big Dipper, otherwise known as the Big Bear (Ursa Major), and no one (not even the Fed chair) nor any positive event seems able to stop it. I can easily tell you why. Full Story
Gold mining stocks are the sector I’m paying very close attention to right now for a potential new Stage 2 breakout. For GDX we want to see a big increase in volume on a break above resistance at 21 which was a former strong support level that broke down in August. Full Story
This past year, 2018, has been a very volatile year. Previously, we outlined how in 2018 there have been five days where the Dow Jones Industrials (DJI) had fallen 600 points or more. We had to go back to 2011 to find one and back to 2008 to find at least four. 2018 has not been a pleasant year. Out of a list of 37 indices provided by The Economist every week, only six were up on the year. Full Story
Using Charles Dow’s well known method of reading the stock market’s movements , on Friday December 14th 2018 , the averages confirmed a bearish indication and can now be classified to be in a bear market. This action Friday is the first occurrence of a valid bear market signal in 11 years. Together the Dow Industrials and Transportation averages triggered a bear market signal following a major bull market of unprecedented duration of almost 10 years. Full Story
We are going to start this update on a positive note by pointing out that the gold to silver ratio recently reached a 24-year record extreme as shown by the 20-year chart for this ratio below, which alone is a sign that the sector is close to a bottom and also that a major new bullmarket is likely to start before much longer. However, there is the small matter of a looming market crash and the collateral damage it could on inflict on most everything, including the PM sector, to take into account. Full Story
I have invested in palladium from time to time in the past. I just dabbled a bit here and there but the market now just seems crazy. In case you haven’t been watching lately palladium has exceeded the price of gold! Full Story
Everybody is suddenly talking about the inverted yield curve. They’re right to do so, too, but alarm bells may be premature. Inversion is a historically reliable but early recession indicator. The yield curve isn’t saying recession is imminent, even if it were fully inverted, which it is not. Full Story
By: Jordan Roy-Byrne CMT, MFTA - 17 December, 2018
Extended weakness in the stock market should bring the Fed that much closer to rate cuts. However, if the stock market is able to mount a decent counter trend rally in 2019, it could raise the possibility of another hike. Right now, the market expects no hikes in 2019 and even half of a quarter point cut in 2020. Full Story
The past few years have seen more than the usual amount of political upheaval. But, interestingly, most regime changes have resulted in pretty much the same thing: Higher government spending and bigger deficits. Apparently the only “reforms” today’s voters will accept – which is to say the only actions that don’t get a leader kicked out of office – involve spending rather than saving money. Full Story
There has been a tug of war in the oil price over the past two weeks. Due to a very rare setup in the market, the oil price has traded in a very narrow range as traders fight it out to see who will win control… the BULLS or the BEARS. My bet is on the bet is on the bears. Amazingly, the oil price is literally stuck right between two critical technical levels. Full Story
With the uncertainties of Brexit weighing on Britain and the EU, their respective currencies have been taking a beating. The euro is in a long-term bear market that has seen a drop from $1.60 in 2008 to a low early last year of $1.03. Over that time, sterling has fallen from a surreal peak of $2.11 to a sobering $1.20. Although these trends do not speak well for the economic and political future of the European Union, they have at least delayed the EU’s demise. Full Story
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