Big moves in oil, gold and the US dollar
For our market wrap Doc joins us to cover the biggest movers – oil, US dollar, and gold. We also field a question from a listener regarding a few US banks and Deutsche Bank. These are looking very weak and this should continue.
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Pardu, it’s anyone’s guess right now—March will provide a clue based on how fast the PMs breakdown. If not fast, It appears GDX and GDXJ will trade in a weekly range which would be very positive. Once the sell off starts in PMs again, the key will be the slope of the move down. I’ll be able to tell more technically as we get some more weeks under our belts going forward.
Hi Boys ? What you think off Northern Dynasty Minerals LTD ! 0,39 CAD A BUY ? Thank’s !
It has a great deposit, but problems with permitting.
A lot of permitting problem. I bought and sold it.
I would not touch it again. It is a gamble.
it isn’t permit-able.
The locals woudl lynch any politician that approves it. It’ll kill a lot of the environment…
It’s broken alot of investors and hearts over the years
move on
Re: Banks.
The problem is derivative exposure.
Deutschebank has a potential $64 Trillion problem, if it ever was exposed to second party exposure in full (which won’t happen, of course)
The question is HOW MUCH EXPOSURE could it withstand?
You bring up a great question, CFS
OFF TOPIC:
Carnivale starts in Rio this weekend, but will it be marred by the zika virus.
The girls don’t exactly wear much protective clothing!
And don’t forget, outright Depression!
they cancelled carnival across Brazil
At least that was not tweeted out!
https://www.youtube.com/watch?v=mEMu9ByUPfk
Doc, I wish you would examine, what is in my estimation is the most important chart going forward for Au & Ag. The monthly 6 & 24 month moving averages cross, which as of right now might happen in the 1180-1190 range imminently.
That same chart for the S& P Friday, without the intervention of the ESF & The BOJ may have harnessed an epoch waterfall because we were on that very brink for a monthly breakdown. Not a word on MSM
Oil went up today because the dollar dropped big today. Market is saying that is more significant than higher inventory levels.
I think, with regard to oil, is that we are now seeing what a mess Russia is in and how they are resorting, on several occasions in the past fortnight, to spreading rumour to try and spike the price of oil. It works albeit for a short time.
I would like Doc if he has time to look at Deutsche Banks technicals on The NYE. symbol DB, their stock has been dropping and it doesn’t look good. I wish I could check this out myself but he has the know how. DT
I’ll say one word about the DB’s technicals–“horrible”.
Thanks, Doc.
This does not help:
http://www.zerohedge.com/news/2016-02-03/it-time-panic-about-deutsche-bank
Thanks for the input, Doc. I agree that gold is going up a bit further. I thought it would top around the 200 or mid 1140s. Looks like the 1155 area could be the top. This next leg down could be significant too. The next move down is hopefully the start of a swift washout phase. I’m ready for the bear to go in hibernation for a full cycle.
the pornbears must be disappointed with todays reversal and it looked so good to the downside. Suspect upside not complete as bearishness is rampant, everyday multiple pop ups from permabear websites predicting the end of the world.
The range of 1850 to 1940 key now and response of market Friday to employment numbers which serve nothing more than excuse for market gyrators. Plenty of scope in the range for daytraders, nightmare for investors
Hope Marc bought that call I told him to get to sooth his nerves.
Someone mentioned Newmarket in this blog.
Warning……I noticed over 600k shares insider sold recently. I did not dig further.
Regarding Northern Dynasty Minerals, I lived in that area for 15 years. The would be mine is in the watershed that drains into the Nushagak River which drains into the Bristol Bay and onto the Bering Sea. Bristol Bay has the largest salmon runs in the world. I have seen them first hand, magnificent! Too much resistance from the locals and fishing lodges and a political hot potato as well. I would be surprised if this ever got off the ground in my lifetime.
doc, always enjoy your candid and thought out discussion. I also do feel that it will get much worse than a little better in the short term. However, it’s always tough for the bears to make money as markets tend to come down at unexpected times, usually after the bears being discredited. For now, this is not the case so the most I expect is rangebound trading with a upward bias. Should we break that last rally high around 1940 spx, that will likely be the hook soon after.
I’ve got my physical anyway in case this is a real deal start of a bull market in the metals. But I doubt it. Miners were way overdue for a few big up days after chopping around forever.
Just getting people excited again – the coming deflationary bust will trash everything, especially mining stocks.
Well, my two targets ($1142, and $1146.30) were hit and broken to the upside. Gold has done well indeed and this action has been very bullish. I was mentioning in late December, when most were getting very bearish on Gold that it had good odds of rallying in Jan/Feb. Gold has exceeded my expectations, but I’m still looking for it to top out soon. $1160.40 and $1184.30 are next resistance.
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On December 27, 2015 at 7:02 pm,
Excelsior says:
“Great chart. That’s what I’m looking for…. a move up to the trend-line of the falling wedge pattern. Gold may make it up to $1146.30 before turning back down in that wedge. However, it were to break up through this level then $1160.40 and $1184.30 are next resistance. If those levels get taken it out, it would be be extremely bullish, although, I believe that to be much more unlikely. It is more likely that Gold gets deflected back down off that trend-line.”
On December 28, 2015 at 8:45 pm,
Excelsior says:
“The reason I’m mulling this over, is a consideration in a swing trade opportunity as Gold may bounce off the recent double-bottom near $1045.40 and then head up the upper trend-line of the falling wedge ($1142-$1146).”
On December 28, 2015 at 2:18 pm,
Excelsior says:
Doc, do you place any credence on the idea that Gold has double bottomed in the $1045.40 area and may actually rally in the month of January?
Historically the beginning of the year Jan/Feb is a strong seasonal period for the PMs.
On December 28, 2015 at 2:21 pm,
Excelsior says:
We were discussing yesterday that Gold may rally up to the upper trend-line in the falling wedge pattern…..somewhere in the $1142-$1146 zone. It seems like January would be when that would happen, but I know you’ve been anticipating a grind down to a lower low in Jan.
Just curious what you think about the idea that Gold is ready for a mini-rally for a few weeks, instead of the decline.
On December 28, 2015 at 2:46 pm,
RICHARD (DOC) says:
Excelsior; excellent point and I’ll wouldn’t be surprised at all if your scenario happens—after a rally, the odds could be a final move lower into spring/summer.
My thoughts favor what you just mentioned.
Yeup. It just happened…..
Now gold is rising fast. I am not sure there is anyone here who is shorting gold or on sideline. One dilemma is, are you going to chase the gold’s advance?
No. I am anticipating this rally to top out soon with next resistance at $1160.40, so I am not chasing it here. I took my positions in late Dec & early Jan for this rally and have rode it up but will be exiting trades soon, or at least trimming them back substantially.
I will say that Gold has surpassed the upper trend-line now, and that is a very positive sign for Gold finishing it’s bottoming process here in 2016 and finally moving into a new bull market.
Like Doc, I am curious to see what happens on the next leg down, and if $1045.40 will get retested, and IF Gold will make new lows. It really comes down to the severity & intensity of the spring pullback.
Prior to 2012, gold always make a high in spring ,between March to May. It has changed. You have position so you don’t need to chase. What I was wondering is for people who don’t.
My target yesterday of the 1155 area just got hit. Let’s see what happens. Seems like it will still go up from here.
LOOKING GOOD………
I agree, not chasing it here.
The upward pressure on gold has been building. It may just run away at any time. If it truly is manipulated, it may just keep going after strong season and people think it gold has peaked and they will sell their position or go tort.
good point
That is a good point Dragonite. I mentioned in late December that if $1146.30 was taken out that the next 2 resistance levels in my mind were $1160.40 and $1184.30.
Morris Hubbart remarked in mid January that if Gold closed above $1140 that he could see it heading to $1180.
Martin Armstrong mentioned in late January that if there was a weekly close above $1143 that he saw a bullish breakout potential.
Rick Ackerman, last week mentioned a target of $1143.40 as a mid-point pivot, and remarked that Gold had failed to make it to his mid-point pivots lately, but that if Gold did that this would be an encouraging sign for the short term.
We’ll see how much oomph Gold has left…..
At 96.50 right now, the USD is sitting on some support. The following chart won’t update until after the close today but 96.50 is at the blue support line and below a 50% retracement level.
$USD poised to plummet
I agree.
It is a little bit puzzling. Now everywhere government is depreciating their currency and US has halted. As the core reserve currency USD should be a lot higher and trend upward. Somehow it has turned weaker. Someone big must be selling. Does someone know what we don’t?
There are so many counter intuitive moves and this market is very deceiving.
I’ve been saying that it topped since it topped in March so I disagree that it should be higher. Historically, the dollar always falls after the first rate hike following a cycle of rate cuts. Plunging U.S. stocks and economic troubles in the U.S. are not good for the dollar or U.S. debt.
In purchasing power terms, the dollar does not yet reflect the Fed’s reckless expansion of its balance sheet. Most will be shocked at the price inflation that is coming as a result of the Fed’s monetary inflation.
The huge run up in the dollar of 2014-15 is akin to the tide pulling way out before a tsunami.
The dollar is a big fat SELL on the important weekly chart.
Thanks Matt. What I was talking about is the relative $ value to other (worse) fiats. The trend for any paper currency is going to 0, no exception. I am sure when you compare, you use a reference of hard currency such as gold. But this is not what I was referring to.
I look at all relationships. The first part of my comment has nothing to do with gold. I think other major economies are simply further along in their hardships than the U.S. so they are relatively closer to a low even if it is not THE low. Since markets are forward looking and things do not look good for the U.S. economy AND so much has already been priced-in with the dollar’s huge rise and the euro’s huge fall, a protracted reversal for both makes sense.
Yes, it is another way of looking at it. The big boys know what will happen and maybe smarter than regular investors.
Though could get a bounce here.
96.60 currently
The 30 year UST Bond is going fall for a long time versus gold.
TLT:GLD
TLT:GLD monthly topping:
The miners will easily beat every other asset class for the next few years.
Good chart and interesting observation.
Totally agree
To raise some cash, I have put some AEM for sale.
I will sell gold stocks and buy oil. Conoco Phillips is cheap.
so, Doc, do you think gold and silver and gdx, gdxj will be significantly down in the spring and then after that they will grind higher for the long term? Or will we re-test the lows sometime after the Spring doldrums?