Gary opines on the Fed. Back after the announcement to see if he is right.
Click download link to listen on this device: Download Show
Yes, we are currently in the calm before the storm…….. All eyes on FOMC.
Then we get gyrations in all directions from as people fixate on one word “Patience”. It is insane that all the markets of the world (currencies, equities, commodities, and bonds) will all act like drunken monkeys because of a single word from a Central Bank. That doesn’t sound like the actions of a healthy marketplace to me.
Good luck everyone, and Gary I agree the often times the initial moves in the markets are actually head fakes. In the past Gold has been hammered by the post FOMC madness, but often rallies right after. I am also curious as to if the US Dollar will try for 102 or if it already topped last week at 100.39. It will get crazy, but by tomorrow we should have better direction.
Good luck everyone!
Here is a good article on why the Fed will not likely raise interest rates:
http://pmorici.com/post/113952506042/strong-dollar-sluggish-growth-weighs-against-fed
Agree, Shad.
I guess we’ll just have to have some Patience……
It looks like we are getting the post FOMC pop, but is it a head-fake or the confirmation that we are starting the corrective move up in PMs and the Euro?
I am very happy I took positions in companies on Friday and Tuesday because they are up very nicely today, and if this is the beginning of the uptrend, then we should ratchet up higher from here, and as predicted, save the 1130 Nov lows for a few weeks from now.
So as a follow up today on the FOMC meeting….. Since the Fed postponed the rate increase, then the dollar came off some and PMS went up. That seems fairly straight-forward to me, but anything can still happen tomorrow and reverse today’s action.
If we go up again tomorrow, then I think that will be confirmation that the 2 week corrective move up in PMs the Euro and the Loonie is underway.
I would also point out that with the dollar going down to 97.08 that it really appears that the 100.39 was the temporary top in the dollar last week as I mentioned when it happened. That leads me to believe we have started the anticipated corrective wave up in commodities and currencies other than the dollar.
There were quite a few articles even today touting a higher dollar (too many really), and that was telling my gut and mind it was probably the short term top in the dollar last week, because of all the dollar bullishness. I did, however, want to keep an open mind, because I could see where IF the Fed had raised rates that the dollar could have surged to 102 before correcting. That isn’t what happened though.
We’ll see what happens tomorrow, but it looks like Dollar down, Euro & Loonie up, and PMs up.
Check out what happened to the price of Gold going down in all other currencies except the Dollar. I think that is further evidence that we are in the counter-trend move.
This is a re-post from March 12 & 13 where I mentioned to Glen that we may have put in a double- top in the dollar at that point.
On March 12, 2015 at 11:00 am,
Shad says:
However, we can’t rule out completely that last night may have been the top in the dollar when it tagged 100. Need to see of the dollar/euro parity idea plays out or if we are already starting the short-term dollar correction and PM bounce.
On March 13, 2015 at 1:56 pm,
Shad says:
Well Glenfidish – the dollar essentially went up and tagged 100.39, which is like a double top from 2 nights ago. This could be noting a top in the dollar, but I’ll consent that due to the FOMC meeting next week, we may get one last push to 102 at the beginning of next week. I really don’t expect the Fed to raise rates at this meeting, but maybe some do.
These were also my thoughts to LPG last night:
On March 17, 2015 at 5:05 pm,
Shad says:
Agreed. I sold many of positions in gold / silver miners in Jan and Early Feb and took some chips off the table because I didn’t like Gold failure to correct and then keep moving above 1308 to test 1347 and 1382. I forecast there would be a sell down into the season of March and the PDAC curse would strike and it did.
As mentioned for a while, I thought the dollar would put in a short-term top around 100-102, and that gold would put in a short-term bottom and swing trade for a week or two reversal. What I am still not sure of is if the dollar topped out at 100.50 last week or if that may happen tomorrow or if the 102 number is still in play based on the FOMC announcement.
Regardless, Gold is oversold at present and looking for a reason for a short term counter-trend move to the upside. I think the next day or so will provide that reason, and so I took positions in silver companies on Friday, and in Gold companies today. I do still have another tier to deploy tomorrow if we get an exaggerated move down.
Shad,
Good calls! Glad I sold all my EUO late last week, and also that by Tue AM I had locked in profits on 3/4 of my UUP holdings. I was not sure what would happen, and I was not expecting such dovish wording nor such change in the dot plots. I was just locking profits, and I hate to be in volatile investments on FOMC day.
Thanks. You are one of a handful here whose opinion I consider.
This is quibbling, but I do want to say that there was never a possibility that the Fed would raise rates today, based on the fact they said the earliest would be a couple meetings after they removed the word, patient. Also, quibbling, but they did not actually postpone it – they could still do it in June. But I know what you meant, and based on all that happened today and all the weak data, I do believe that the earliest would be September or October.
I feel like I and a lot of us won a battle today, but not the war. I had a lot of green today, and glad that I held my bond ETFs and stock index ETFs in addition to what I did with currencies. I guess only regret is not going heavier in gold – we will see.
Now I need to figure an answer to the ? Of what now. Armstrong still sees consolidation in the Dow, and perhaps a correction, into May. If a correction, he thinks that will be the trigger for the final run in bonds. So think I will hold those but watch closely to sell. Like you, I think, I still see the dollar resuming its climb fairly soon. So many bullish reasons beyond the short term. So I have to expect that gold may only be strong for a little while, too.
Thanks for kind remarks Derek. Much appreciated.
Yes, you are correct and I didn’t word my Fed speak very carefully. They took out Patience and reiterated that they were not going to be impatient. My point was that so many people thought they’d announce the rate hike today, and I just didn’t see that with the dollar surging so much as of late. It would be September before they would likely do a hike, but they are just kicking the can down the road like they have been since 2009. Rick Ackerman may be correct that they will never raise rates : – )
Great tunes, Dan!
BTW, uranium held at $39.25; I was wondering if the stocks will have a bit of a pop when it goes over $40?
Dan – I am watching Uranium very closely and have some solid positions in few of my favorite companies and feel energy is building in the sector for the first time since 2011. It is really exciting some of the acquitions some companies have made as far as properties, mines, or mergers in the space the last few months.
Now, whether it will pop at $40 is unclear, but it will be a higher psychological level to be the $40’s for Uranium pricing, and that should give the stocks that have given over 90% away a chance to bounce a bit. I personally feel that regardless of the fireworks we see today and tomorrow in ALL markets, that Uranium miners are poised for a 3-5 year bull run from these levels and I will be a long term holder of many stocks I have taken positions in over the last 6 months.
Wildcat Silver is at an RSI of 15 and could be a snap back play IMHO.
http://stockcharts.com/h-sc/ui?s=WS.TO&p=D&yr=1&mn=0&dy=0&id=p53809254337
Good chart Dan. I’ll start watching Wildcat Silver as well then. Currently I am watching the 12 companies we discussed the other day and have a hard time tracking more than a dozen companies per space (silver, gold, PGMs, Uranium, Oil, copper, etc…)
This fed statement could be one of the most important in recent times.
This article tells what is really happening. THE most important!
You do realize that because of Obama’s behavior and actions, that the U.S. is no longer considered a trustworthy ally by many UK politicians; and I assume French and German politicians.
I think Canada is waking up to Obama too. It was pathetic in 2008 when many Canadians were gushing over him.
Is it true that the Federal Reserve puts out the kereport?
If we are a society enamored with instant gratification, then I submit that Fed “Patience” or lack thereof is just a colossal waste of time 🙂 (time being our most precious commodity). Especially as I’m sitting here on the sidelines — I should go for a walk!
It is possible, if not probable that Russia will gain(lease) a warm water port from Greece.
It is possible if not probable that all of North Africa Mediterranean coast from Egypt to Morrocco will become an Islamic Caliphate from which Southern Europe will be penetrated and terrorized. Long after I am dead and buried I see a great Islam versus Christianity conflict throughout Europe, in which the Christians will be represented by Russians from Greece and the Balkans. (Thirteenth/fourteenth century history repeating.)
Smartest statement I’ve read in a long time. I agree with you 100%. I don’t think you’ll have to wait to long to see it. You can’t trust that reports will be made but I hear the UK is getting feed up already. All you need is a spark sometimes.
Jim Grant says the Fed won’t remove “patient.”
Yep. I saw that interview with Jim Grant this morning. I don’t think they will either, and posted an article up at the top of the thread that has some pretty good reasoning in it that I tend to agree with.
Is there a way to remove patience or signal rate raise but tame USD at the same time? Just curious. I think fed needs to raise rate now.
Yes, genesys, I think the Fed could get away with a token raise because of how overbought the dollar is. It would become a “sell the fact” event and the rate hike would be seen as “priced in” already.
That’s a valid point Matthew. Do you not think that still may spike the dollar a bit more?
Conversely, do you think the Fed is afraid of being perceived as strengthening the dollar further if they announced a rate hike, so this is why they may postpone the rate hike until maybe September?
Shad, I think the opportunity to hike with minimal positive impact is now. If they wait many months, the dollar could be technically “reset” and ready to respond violently to the upside.
Right, I agree with that 100%. However, does Granny have the will to do it now versus kicking the can down the road. I think it would be better to get it over with, but doubt whether they’ll force the issue today.
Saying that Yellen does announce they are raising rates by 40 pts today. Don’t you think that would spike the dollar a little higher?
Forty points could cause a brief spike, I suppose.
Thanks Matthew. Just what is hard to guess is how much rate raise is priced into USD now. If 25bp Maybe gold would do nothing. But if priced in at more than one 25bp. Pm could benefit today. What ur thoughts?
I don’t think it would be more than 25 points but I do think that would be significant enough psychologically to send gold up, especially considering the footing other economies are on.
Funny, guys, I was typing and forgot about the time so it looks like gold was rising while I was oblivious!
Btw, my UUP puts popped big. 🙂
Matthew.. haha.. sorry.. if this triggers you to miss your monitor… Hope all is well.
All good! 🙂
this is what I think guys…. Enjoy the land of dream today.. tomorrow.. is reality and reality is PM continues to go down….1050 that is (either down outright or up followed by left translated manner)… rate raise is postponed again… I cannot think of anything but more demand for USD for rate differential buy the rumor… 🙁
Genesys… you just don’t get it do you…. shh!
https://www.youtube.com/watch?v=mlv7Bp-L2MM
🙂
Yes!! There’s Dr. Evil when you need him.
Maybe I don’t get Matthew. Whats ur interpretation? I really wish we have seen final lows at 1130.
I’m just teasing, Genesys. The first thing Dr. Evil says in the clip I linked is “you just don’t get it, do you…” -so I thought I’d have fun with it.
Maybe I don’t get it, but I think we’re in for more than a bounce. We’ll see.
We could make 1 Million Dollars! Then we can buy sharks with lasers.
— (said in Dr Evil voice….. followed by another evil laugh)
well.. Hope it’s it..Matthew/Shad…. I’m sick of this PM correction.. LOL
Well my best guess is that we have a counter-trend move for 2 weeks, but then I think it is inevitable that we’ll be going down to test the Nov low at 1130 and will likely go through it down to 1065 or 1044 before the major bottom is in May/June.
Until then, let’s enjoy the breather and higher prices for a bit. Cheers!
Why should they? The will not raise rates anytime soon.
The big conundrum, to raise, or not to raise, that is the question.
I find it funny that so many folks here pick away at Obama’s faults when they fail to acknowledge that it doesn’t matter which party runs the old Empire. It is owned and run by a corporate elite who “manage” elections and “free speech” via money. More importantly the U.S.A has several GREAT academics who have diagnosed the deeper problems with the Empire. One of them is retired Princeton political theorist Sheldon Wolin. Back in 2008 he wrote a little ditty called Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism. This book will give you a guild as to what has happened to the U.S and where it actually is politically. He calls it “Inverted Totalitarianism.” Heavy indeed; but a good diagnosis for the sick republic. It’s all about dividing the people through political rhetoric, permanent job worries and economic uncertainty. People on both sides of the political spectrum should take a look at this book. It aint an easy read but well worth the effort!
Not so funny to me. He ran with the statement he was going to change how things are done it Washington. I could give you 50 statements from him that were outright lies. Many people voted for him just on what he said.
Confused is obviously anything but confused; 100% correct is more like it. Obviously Gregd is right too; Obama’s not funny (but those who voted for him sure are).
Obama happens to be in control at the moMent.
Faber says no rate rise this yr … along w Jim Grant
No rate increase this meeting………..I think…………..j
There is no way on earth………that one PERSON should have this much power!
One person saying one word to boot!!!!!!!!!!!!!!!!!!
THEIR GOING TO LEAVE THE WORD “PATIENT” IN THERE………WHAT ELSE CAN THEY DO !!!!!!!!!!!!!!!!
LOL,LOL !!!!!!!!!!!!! NOW THE FED WORD IS ” UNLIKELY ” TO RAISE RATES……………..LOL,LOL,…………..PEOPLE…….THE FED WILL NEVER RAISE INTEREST RATES…………….PERIOD !!!!!!!!! THE COUNTRY IS F#%KED !!!!!! LOL
Yes, it is hopeless. Guess I will end it all
Interesting. Patient gone. Now “reasonably confident…. that inflation will reach 2% …
In addition, apparently the dot plots moved to slower tightening expectations.
Seems so far they found a way to remove patient, and still be very dovish. Market so far seems to think so, but I agree with others that this could get very volatile over the next day and especially as Janet speaks.
HERE WE GO……………….JANET SPEAKS, LOL !!!!!!!!!!!!!!!!!!!!!1
The SHE DEVIL………………..
” NOT RULING OUT A RATE HIKE AFTER APRIL”…………………..I HAVE ALREADY RULED IT OUT !!!!!!!!!!!!!!!!!!!!
IT’S SIMPLE……………………NO RATE HIKE THIS YEAR !!!!!!!!!!!!!!!!!!!!!!
I am in your camp…………NO RATE HIKE…….
YOU GOT IT……………….LOL !!!!!!!!!!! WAKE UP PEOPLE !!!!!!!!!!!!!!!!
PETER SCHIFF IS RIGHT……………………..LOL !!!!!!!!!!!!!!!!!
BASICALLY…………….THEIR STILL ” PATIENT ” SO NOTHING HAS CHANGED.
OH MY…………..JUST REALLY LISTEN TO JANET YELLEN……………..THIS IS SO SAD !!!!!!!!!!!!!!!!
AUDIT THE FED………………………………..NOW !!!!!!!!!!!!!!!!!!
No audit need………..they are broke to…….All they have are WORDS……AND A SHE DEVIL………lol
MY GOD…………………PEOPLE……………IT’S JUST THE SAME OLD STORY OF FINANCIAL SURVIVAL OVER AND OVER AGAIN !!!!!!!!!!!!!!!!
THIS COUNTY IS IN TROUBLE PEOPLE…………..FACE IT………….WE ARE NEXT…………AND THEY KNOW IT !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
DITTO MARK…………..
BOTTOM LINE……………….THE FED DOSE NOT HAVE A CLUE WHAT TO DO !!!!!!!!!!!!!!!1
the next word they will use ………………is POWDER……….
THEY are out of……………………………………POWDER…….
OR MAYBE……………………….YELLEN IS A POWDER PUFF.
Mark,
The fed knows exactly what they are doing. They’re just not tell you.
🙂
PEOPLE AT THIS POINT IT IS NOTHING BUT MASS CONFUSION !!!!!!!!!!!!!!!!!!!!!!!
THEY THE FED DON’T KNOW WHAT TO DO…………………THEY DO NOT KNOW WHAT TO DO………………QE4 COMING SOON……………PETER SCHIFF IS RIGHT, WE ARE NEXT…..PEOPLE WE ARE IN TROUBLE …………..QE IS NEXT…….
Dollar just had an extreme move down to almost 95 and is now bouncing back to 97+.
wow I didn’t see it when it went down to 95 and just saw the 97, but there has been a lot to keep track of this afternoon. That is just more confirmation that the dollar did top last week at 100.39.
Yes, and the euro had a brief stay at 1.10, before meeting heavy selling. I missed both. I might have shorted euro and long dollar at those prices. However, those extremes never showed in UUP and EUO, that I can see. Still think that if any central bank raises rates, it would be the Fed long before any other. The dollar seems to me to still be the best, so I cannot see this currency move going too much farther.
They removed the word “patience” yet they said they will not be impatient in raising rates. As usual they tried to say nothing as most politicians do so markets don’t drop because of the to words they choose.
Of course those little weasels did, and I still don’t see how they could have raised rates much anyway due to the surging dollar we’ve had lately.
In a way, they brought the dollar down a bit (which they probably wanted) just by saying very little. They talked the dollar down without doing anything.
The mainstream investors had a Long squeeze as people ran for cover in the falling dollar, but why everyone thought the rate increase was coming today is puzzling.
I do agree with Matthew though that it probably would have been better for everyone to have gotten the rate increase over with today while it was already priced into the dollar.
I won’t really start to worry until they start ADDING new words. Like brimstone and pestilence!
What is hard for me to see is how the fed will be “reasonably confident of inflation moving toward 2%”, anytime soon, given their inflation projections as announced by Janet today. Hmm.
If I look at the gold chart, then stand on my head, it looks like the last three and half years. Is it manipulation on the way up? Or is it just the short-sellers panicked out of their positions?
‘Markets’ go up or down based upon
asset accumulation and distribution
timed to coincide with events which
give the appearance of being causal.
The US dollar is getting fried on a George Forman grill made in China, if you can’t make a George Forman grill your country is in deep doo doo.
Funny DT. I have a George Foreman grill and never remember to use it. Is it good for cooking US dollars?
I have one too. It does a fantastic job with chicken. And chicken is money as you know! 🙂
Bird’s wife is cooking some crow tonight on his George Forman grill, served with his favorite garnish Tahini spred.
Actually Dick, we have servants in my home and they do most of our cooking and chores. My wife mostly supervises. I will mention Tahina to the gals tonight though since I kind of have a hankering for a little Mediterranean fare. Thanks for the tip buddy, you are making me hungry!
Yeah I just need to get it out and use it once in a while. I just end up stir frying everything in a wok typically.
George’s grill is really good when you buy a hostess twinkie (which is also made in China) wrap it in the greenback (made in the US) and lightly toast it.
they say…..not even a crow will eat a twinkie………….
Jerry, crows know twinkie’s are a heart attack waiting for a place to happen but The Chinese know we will buy their foodstuffs, no matter what’s in them. DT
That is sound advice on toasting the Twinkie Greenbacks Top Chef Dick Tracy.
THE WORD UNLIKELY MEANS ……………NOT LIKELY !!!!!!!!!!!!!!!!!!1
THE FED IS NOTHING BUT A CIRCLE OF WORDS……………LOL !!!!!!!!!!!!!
Dollar should rally back up to 100 soon and we could lose most of the market rally.
Man, the FED is so powerful that most of the investment community discusses weather a single word will be included or excluded. Thanks Al, for letting some levity onto the boards yesterday. Had fun listening to a bunch of older tunes. (;-)