US markets, Oil and gold
For our market wrap today we are joined by Chris Temple and Richard ‘Doc’ Postma. We cover the US markets continued melt up, oil’s run up and gold’s fall today.
Click download link to listen on this device: Download Show
Every logical thought in my mind tells me that this rise in conventional markets is wrong and that the markets should turn down.
My instincts are now seriously worrying that the conventionals are just running away from us between now and the New Year.
Just thought that I would mention it.
I totally agree. QE made it go up, and now that it’s over, it’s mostly just been flat all year, except for the recent drop. And right now it feels like a backtest.
I feel nervous about oil (XLE) as well. I read about Iranian oil about to hit the market – that’d cause prices to plummet, right?
The only thing that I feel good about is gold, and I don’t feel so good about that either, after having just read Clive Maund’s latest article on 321gold about COT – his bottom line is, the next major moves are: USD up, Euro down, Gold & Silver both down – all up or down hard enough to trade – long and short both. Clive Maund is a CMT from the UK, and is one of the smartest guys I read. He tells it straight.
He also appears to think that a rising dollar will crash the US conventional markets as well – not read that article though, just saw the headline.
I would feel more comfortable with oil and the conventional market and very nervous about my gold position which I will dump on a rally. I went in heavier at the line in the sand at 1867 s&p and increase since then is about 2 years worth of a move.
Thanks Paul L, you must do what is right for you.
Good grief – it is quiet on here tonight.
Interesting how when gold soars the number of posters on here soars… but when the opposite happens…
Shall I get out my harmonica and play us all a tune?
Hi Bob. “Play Misty for Me”
Remember that Clint Eastwood movie?
GOOD NITE IRENE
OK sometimes you have to go with your feelings and intuitions …
Interesting chart, Gabriel.
Any thoughts on this?
http://goldsilverworlds.com/price/is-there-much-downside-in-gold/
I’ve not seen this site before, but just read the article, and the author’s view of COT is the same as Clive Maund (see my not above). We are at extremes now, and historically – every time – we have a big downswing – not saying when but it’s the next big move. See http://www.clivemaund.com/article.php?art_id=3614
Remember when gold prices were at the lows last summer and KE Report was agonizing over ‘bottoms?’
Sure do Fran Six.
Not really different from what most folks here are saying.
One good thing I saw among the “gold bugs” in New Orleans by and large was a notable LACK of bullishness. Contrary to some other things I’ve read, I don’t see a whole lot of optimism. That’s justified: physical demand in both China and India is weakening, and that may not be supplanted by investment demand again for a while.
Did you read about the SilkRoad ?
Thanks Gabriel for pointing that out…………….
The RSI on our $TNX:!PRII indicator is just starting a turn, where other weekly indicators are resolutely in favour of a continued decline. What that means is that bullion banks have telegraphed a move in the gold price for the benefit of the last two days. But they cannot hope to arrange that the market follow a whim. Selling into the gold market in the hopes of changing in a couple of days that’s taken years to accumulate will never work.
Our indicator was indicating a decline which was finally filled out, but whether there’s any more will for considerable downside potential is pretty debatable. The long based bets were merely premature on their stance, and were taken advantage of.
Good questions Cory. Doc embrace the bear with shorts hahaha. $1050 here we come!!! Wave 5 of C here we come. Leg 1 completed. Leg 2 up will probably happen tomorrow unless leg 1 extends tommorrow. Then 3 Big down 1072. 4 up to 1105 then modest 5 down to 1030-1050 and ALL this will complete in Nov 2 or 3 week or Dec but outside chance and 2016 will be year where bull will take over. I like Gary but he’s too early.
Have you seen the movie?
Great market wrap, guys.
Cory, Al and Temple, great weekend show. It’s was outstanding!
Thanks Chartster.
The IMF’s executive board is supposed to decide this month on putting the yuan
in the SDR basket for 2016 …
I wonder if TA or Elliott Wave is aware of that fact .
Fundamentals don’t matter in rigged markets. Last 4 yrs is perfect example of that.
Shortages of silver, backwardation of gold none of this mattered did it?!
It Doesn’t Matter Till It Matters !
The London Gold pool is the perfect example.
ditto
And even if that does come about, life as we all know it will go on. Markets are unlikely to be affected. This whole subject has been most useful, though, for the fear mongers and promoters out there who have blown this SDR decision so far out of proportion that these clowns should never be taken seriously about anything.
Agree with that Chris. Thanks for saying so.
Really ?
So nothing can affect the strong US Dollar …
It seems easier to postpone the acceptance to keep the status quo.
http://www.reuters.com/article/2015/11/04/imf-china-yuan-idUSL3N12Z3DH20151104
We need the Yuan in the basket. The possibility does exist that the Euro experiment will fold one day (although I am not predicting that). But if it does there is not another currency that could yet take its place should that day come so it is insurance for the global currency system that an alternative with staying power and growth behind it be ready. To appreciate what I am saying here you only need to ask yourself what the dollar would look like if the Euro abruptly disintegrated due to political upheaval and the departure of a major member(s). And then wonder about the stability of the global financial system. It would be a catastrophic shock. So there must be a stand-in ready to take its place.
The Americans’ blocking of reform signals her desire to preserve the dollar’s hegemony.
From another clown,
A. MacLeod:
“There is no doubt, if you read the IMF papers from the last SDR review in 2010 that the renminbi does now fulfil the criteria for inclusion today. So the question then is will the advanced nations, which dominate the IMF’s membership, permit the renminbi’s inclusion, and will the US, which has dragged its heels on giving China and the other BRICS nations a greater shareholding in the IMF, relent and permit these reforms, which were accepted by the other members back in 2010?”
Maybe I don’t understand you. Are you in favour of inclusion or opposed?
I am in favor but the Yuan’s inclusion in SDR imply potential USD selloff …
and gold higher.
You see that spike in the dollar this morning, Gabriel? Whew! There was a 100 point move out of left field and it was not even on my radar. Can’t say I saw that coming. We have most definitely broken out of the falling channel now and it does appear the market is finally taking the Fed seriously. There is no other reason than the belief the Fed will raise rates for this kind of action. In response oil has taken a face plant down by more than 2% Brent. There is going to be a stock market correction *very* soon in my view.
What a weird day so far.
Left field ?
You should listen Yellen Faces Lawmakers In testimony to House Committee …
Stocks, Bonds, Commodities Tumble After Yellen’s Hawkish December Hike.
That stock market correction may have actually just begun. I don’t want to call it prematurely but we may have at least a 3 day rout on our hands.
Rice and Nat Gas are up.
I agree.
I have been buying vixy now that it appears to have bottomed. Saving for a rainy day which always comes eventually.
Hi there. Thanks for the interview!!!
I got two simple and maybe stupid questions. I am sure I don’t understand things correctly. Since the conventional markets are pretty much detached from the real economy, is it really necessary to hold the markets up to stop a recession at this moment in time? Does the valuation of those casino stocks like TESLA and NETFLIX and the likes, or those with a stable business model like AMAZON, NESTLE or STARBUCKS really matter at this moment in time?
Best Regards!!! Keep it up!!!
Nic’
I think this year — albeit in a haphazard manner — it’s begun to matter a bit more, Nic. I’ll have more to say on this.
Great call on gold these past weeks, Doc!
Excellent comments on the markets Chris!
It is easy to be bearish when price goes down. We should take the opposite side. More the price drops, it is closer to the bottom. If $1500 is cheap as we thought, is $ 1100 cheaper?
Re. the conventional market: I’m going “all-in” on QQQ and will remain bullish until Friday January 20, 2017; Inauguration Day. Why? Took me a while, but I’m finally convinced The Fed has this market on cruise control. More specifically, why QQQ? Well something tells me people can’t stop getting excited about tech. Combine that with Gary’s “Can’t short this market/Fed’s got your back”, I don’t see much outside of some kind of goofy black swan that all bears (myself included) keep “hoping” for. Can I say that? I mean I’m not rooting for anything bad to happen. I just stopped expecting that something black swan-ish actually will. And why 1/20/17? For obvious reasons I think. Maybe upon that date people will realize the we are living in the matrix. Oh, and by “all-in” I mean only by the rules of my own risk tolerance and position sizing. I’m not stupid.
Groupon just got murdered in the pre-market. 30% crash. No idea why yet…..but OUCH!
GRPN and GPRO. Which do you think is first to zero?
Or, are they being set up for takeovers?
Make that 32% (and falling).
Ruunnnnnnnnnn!!!!!
Just one more note…… Groupon has now fallen 2 cents below its November 2012 low point. The question we should ask is if this is a bottom that should be bought or if it’s the sign of a much steeper fall. I cannot answer that question just yet. We need more information but there is probably little doubt this sell-off this morning will be bought for a short term pop.
Ouch is right…this is a falling knife I told people to try to catch back when it was $5. IMO the plunge is a gross overreaction. Yes, the company may have been growing too quickly. But it’s at least started turning a profit (though below expectations/previous guidance.) I’m sticking with this call.
So its a buy at current support in your opinion? I may just agree with that sentiment.
I think it is, yes.
46 million shares traded already and it is slowly inching its way back up. It’s so busy my chart stopped displaying.
John Mauldin challenges the conclusions of Williams of Shadowstats (in a nice way of course because John is a nice guy) and he concludes John is wrong because our economy has changed over time. The Billion Prices project backs him up because it more accurately mirrors what the CPI is telling us. I am sure I don’t need to tell anyone here I have long disagreed with Shadowstats outlandish conclusions about a hyperinflation that is on our empires doorstep. But it seems futile to argue with the die hard believers.
The Shadowy World of Shadow Statistics — John Mauldin courtesy of Financial Sense
http://www.financialsense.com/contributors/john-mauldin/shadowy-world-statistics
Why the stock market is about to decline according to Charles Hugh Smith. I could not resist posting this article because of the fascinating chart he has showing that tax revenue collections are a highly reliable indicator of market peaks. This short article is a must-read for anyone trying to divine the trend. Thanks Charles!
The Most Important Chart You’ve Never Seen: Tax Receipts Top-Tick the Stock Market — Charles Hugh Smith — Of Two Minds
http://www.oftwominds.com/blognov15/taxes-stocks11-15.html
Natural Gas on the rise. Volumes are on the move this morning as that minor bottom I identified two days ago gets a liftoff. Up 4% so far but the day looks positive so far. Not that I really trust it yet but its a trade for today.
Above refers to the ETF, UGAZ….sorry for neglecting to mention that.
Now Volkswagen has been caught cheating on their gasoline engine emissions, it’s too bad they feel sorry for being exposed. DT
Everyone is cheating. When that comes to light it will be a wash since we are not going to stop buying or driving vehicles.
Bird, what you just said is a given. DT
Agree.
If you click on the ‘1W’ (one week) chart, you will see that the dollar rally corresponds with the decline into negative rates on the ten-year Swiss bond rate into the negative. The hopes at the central bank in Switzerland would have been a dollar rally and a CHF decline.
The dollar rally is not based on any fundamentals, but an excercise in keeping their currencies in check, while rates rose elsewhere. This also resulted in an inverted yield curve between US treasury bills and long bond rates in the Euro Zone. But you can’t hope to make any money betting on a ten year bond with a negative rate.
http://www.investing.com/rates-bonds/switzerland-10-year-bond-yield
Euro Zone rates for their ten year bond are also negative. So we are talking a huge effort being made at devaluing the Euro too:
http://www.tradingeconomics.com/euro-area/government-bond-yield
Within the US, secondary markets for treasury bills are literally being flooded to defend rather zero bound, with the hopes that the stock market remains propped up:(very effectively)
But gold is nowhere to be seen as markets challenge former highs again.
He seems double down for every of his failed call. I am not impressed with him.
Some of the companies you have featured from New Orleans have either done reverse splits or delisted from The US market. Neither of these occurrences please me!