Reversals at the end of the week… Here’s what to look forward to
Chris Temple helps me wrap up the markets for the week. US equity markets continue to move higher no matter what data or news comes out but the USD and gold reversed today on the back of the jobs number. We look at what could move markets next week and remind everyone that August is typically the slowest trading month…
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I know he’s kind of persona non grata here now, but Gary posted a great video yesterday on what may be happening with the dollar. Different from what most believe I think.
https://blog.smartmoneytrackerpremium.com/2017/08/unnatural-trends.html
Thanks……..to bad the trolls ran Gary away……….
Interesting view from Gary. He was the one who clearly said the stock market would enter a bubble phase and look where it’s gone since. On the dollar, he is basically saying that the 7 year of QE chickens are coming home to roost for the USD. Maybe he is right. I don’t know any more. It’s all as clear as mud to me now. Maybe the Fed is “tightening” because they fear a big dollar drop in that case. On the other hand, the other currency zones are still doing QE and US has stopped. US is ahead in the cycle of QE. Maybe there will be significant inflation comes to USA first but it’s impossible to tell. CPI has dipped again after peaking in March in USA. However in the UK, it has still been rising into the summer despite slowing economy.
I am looking to see if one of the currency zones is going to have excessive or even hyperinflation and which one will it be? My current eyes are on the UK (not Japan, Eurozone or USA) on the Brexit. Seems primed for me. Pound is having a dead cat bounce just lately up to $1.30. Should get to $1.37 resistance if it is any good but the UK is heading for a lot of trouble in my view. It just needs something to break one of the markets suddenly and money will be flying all over the place from one currency zone to another so fast it’ll make you head spin.
“I don’t know any more”……….
NO ONE KNOWs anything…….ask BOB M…….. 🙂
The entire system is RIGGED……
The drop in the dollar was nothing more than a correction in a bull market and to reset sentiment. It looks like it worked. The Fed will be reducing its balance sheet in September. It has already ended QE and raised rates three times and probably will again soon. Unemployment rate is at multi decade lows. Inflation is low (commodities at 50+ year lows). The stock market is making new all time highs every day.
The BoJ and ECB, and most every other CB, have done the exact opposite. There is no fundamental reason for USD to fall vs those two currencies. The Fed does NOT want commodities rising, and so they won’t. They have the BoJ in their pocket, and as long as commodities are falling it will be a tailwind for US companies and consumers. It’s a golden era for US stocks.
Face it, the Fed has schooled you and everyone else in the hardmoney crowd. When $usdjpy busts 120 again, the hardmoney crowd will be squealing.
You are know nothing of what I invest in, so you have no idea if they “schooled” me or anyone else. Kindly refrain from the personal attacks.
As for the USD, we’ll see. I expect “The Fed will be reducing its balance sheet in September” may not age so well.
The Fed and other central banks are not in control, even though they do a masterful job of convincing people they are.
Many of Europe’s banks are teetering on insolvency (bad loans, etc.), wages not moving, inflation (even the faked numbers) not moving, etc., etc.
Creating trillions and trillions and trillions of currency units for a decade or more (BoJ), can have nothing but very negative consequences (eventually enough people will recognize the currency is Monopoly money).
It may take another year, two, even three, but a soft landing has zero chance of happening.
If the BoJ has “schooled” everyone so well, why do they have to buy the entire JGB market and why are they on their way to owning every JGB out there?
Why are they, the SNB and others buying equities hand over fist to prop up the “wealth effect”?
This means their plan is working?
Bless you and have a great weekend!
At what point will you concede the bankers won?
Do commodities have to drop to levels seen during the Civil War?
It’s over. The hard money thesis died in 2012 and its zombie was just incinerated.
The St. Gaudens $20 will still be beautiful.
Also, if the “hardmoney” crowd is so wrong, why are central banks buying tons and tons of gold every month?
Why expend the money and energy on such a useless vehicle as gold?
Some can believe the Keynesian press releases and statements about how rosy things are and how their “plans” are working so well.
I’ll believe the actions of where they are putting their own reserves and their ACTIONS to restrict cash and implement other currency controls.
A system that is about to unwind its asset purchases and reduce its balance sheet sure is acting a little panicky if things are so spiffy.
“Tradition.”
OK, thanks Ben 🙂
Thanks CFS. MacroVoices is a fantastic podcast. They have very good research materials (curated from interviewees, listeners, etc.) that they send out free every week too, if you give them your email list (they do NO marketing with your email list)
I agree–Erik Townsend does a great job.
Yep, it’s a great listen every week!
The end of Empire, end of petrodollar and all that can’t come soon enough to satisfy me – especially Empire. BUT aside from that I deal as best as I can with reality; and of all the major global currencies the dollar’s fundamentals are the least bad. It won’t break my heart when it crashes and burns; I just hope I live to see it (and more so the comeuppance of its evil custodians.)
This was in response to your initial comment, CFS – don’t know how I ended up all the way down here!
$usdjpy made a key outside reversal day today. Today’s lows won’t be taken out anytime soon, if ever.
Golden cross on the weekly $usdjpy chart is imminent. There is nothing bearish about this chart whatsoever.
http://stockcharts.com/h-sc/ui?s=%24USDJPY&p=W&b=5&g=0&id=p13063109915&a=538050601&listNum=1
Didn’t you say the other day that crawling along a moving average is not bullish? Matthew replied that in the context of the chart you were talking about, it was.
The context of this chart is that USDJPY had a big run up from 2011, rolled over and fell below the 200 week MA, regained it but has been unable to get far above it. In this context, continually retesting the 200 week MA does not give the appearance of strength. MACD and Slow STO on sell signals. RSI below 50. I’d call it neutral to bearish.
Of course, all these charts we’re going back and forth about are in consolidations, inherently highly uncertain, and so give us endless fuel for bickering while we wait for something decisive to happen.
The daily chart, btw, looks bearish, though likely due for a bounce—note how with each test of the 200 MA it has penetrated further below it.
http://stockcharts.com/h-sc/ui?s=%24USDJPY&p=D&yr=5&mn=0&dy=0&id=p50299739718&a=538050601
I don’t think $usdjpy drops below its 50 WMA. I also think it is about to start its next leg up imminently. And I think it will be a dramatic move higher. That move will be matched equally in the opposite direction by gold and the miners.
I would much rather be in a sitution where the 50 WMA is curved up and providing support as opposed to the the 50 WMA curved down and providing resistance.
A real bull in the miners would have seen the 50 WMA go flat at worst. The fact that it is now bending downwards is the sign of a very large leg down incoming.
http://stockcharts.com/h-sc/ui?s=%24HUI&p=W&b=5&g=0&id=p75381026685&a=538062292&listNum=1
I don’t think $usdjpy drops below its 50 WMA. I also think it is about to start its next leg up imminently. And I think it will be a dramatic move higher. That move will be matched equally in the opposite direction by gold and the miners.
I would much rather be in a sitution where the 50 WMA is curved up and providing support as opposed to the the 50 WMA curved down and providing resistance.
A real bull in the miners would have seen the 50 WMA go flat at worst. The fact that it is now bending downwards is the sign of a very large leg down incoming.
http://stockcharts.com/h-sc/ui?s=%24HUI&p=W&b=5&g=0&id=p75381026685&a=538062292&listNum=1
http://stockcharts.com/h-sc/ui?s=%24USDJPY&p=W&b=5&g=0&id=p69226236425&a=538062272&listNum=1
The competency of the industrial-military complex with respect to Iraq policy.
Anybody ever listen to this Stansberry Research podcast? They’re predicting a melt-up stock market where we can all double or triple our money before the final crash. Now if I can just figure out how to get my funds out of mining stocks, it sounds like a winner: https://orders.cloudsna.com/chain?cid=MKT328877&eid=MKT330032&snaid=&step=start
Savage saying the same thing. Gotta give him his due…he’s been excellent at predicting the overall direction of the market for many, many months.
silver doctors weekly wrap with David Morgan
https://www.youtube.com/watch?v=pJV6HWxDXDo
$indu:$gold broke out above the 200 month MA. Headed for the upper bollinger band imminently. Cup and handle breakout targets 21.
http://stockcharts.com/h-sc/ui?s=%24INDU%3A%24GOLD&p=M&b=5&g=0&id=p89209636276&a=538057257&listNum=1
You can’t listen to the fed and expect to know what the do. Watch what they do. They always say it’s data dependent, and that’s just bunk!
The fed started unwinding its balance sheet in the beginning of 2017. They started the bond buying program at the beginning of 2014. They bought (but didn’t really buy) three year bonds and monetized those bonds. They exported the dollars created by those bonds internationally. Exporting those dollars caused the dollar to go up in value. The three year bonds started to mature in the beginning of 2017. They rein in the dollars created by the bonds and collapse the debt ” unwinding the balance sheet “. As seen on the $USD chart.
The fed has been saying they are waiting for 2% inflation knowing the whole time that exporting dollars causes the dollar to go up and commodities go down. All the while lowering the money supply in country causing deflation! Watch what they do, not what they say.
Exactly. Same with the ECB and BOJ.
The ECB and BoJ are cutting rates and easing while the Fed is tightening, because they want more inflation supposedly. That is utter nonsense. They know that by doing so, USD goes up and commodities get crushed. Especially the BoJ.
This next leg up in usdjpy is going to be the final nail in gold’s coffin I think. I think commodities are dead money for a long long time (which I don’t think you believe), but if they can manage to get close to the downsloping 50 MMA they will be a short. The monthly chart is an absolute wreck. But they will follow gold down after some delay.
The damn CBs know that commodity inflation will be the death knell for real growth in the US, and so they dare not let it happen. Commodities aren’t going anywhere but sideways to down. It is the fuel (maybe the only one) for real growth in the US.
A most excellent monthly gold chart from Fransix. I hope you don’t mind my saving and posting this.
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=M&st=1999-01-07&en=today&id=p78658271476&a=497315188
I like this one but it does suggest more short term weakness for gold:
http://stockcharts.com/h-sc/ui?s=%24TNX%3A%21PRII&p=D&yr=1&mn=0&dy=0&id=p96887916130
Since the miners have lagged gold for weeks, more weakness for gold would make sense. The thing to look for now is the miners bottoming before the metals and/or consistently outperforming them significantly.
How about higher highs and higher lows? You know, an “uptrend”.
Lol, ok spanky. 😉
Gdxj:GLd head and shoulders suggests a $27 target once the neckline broken. and it will be broken because that is all this sector does.
Er make that the vanilla GDXJ daily chart.
The second half of 2013 to now has formed a massive inverse head and shoulders.
BTW, the shadowstats line is a pretty nice fit. +1 for John Williams.
Could have bagged about $50 yesterday. Walked with $10 today. Woopty do!
Bitcoin goes on another spike. Up over $300 to sit comfortably above the $3000 mark. Doesnt appear to have any concrete relationship with any other market right now.
The fact that it hasnt crashed as yet since its impressive rally began earlier this year is interesting.
Does this really look like a bearish chart Spanky?
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=10&mn=0&dy=0&id=p98787236153&a=521689418
I agree with Matthew, the daily chart just looks like another downwave like the last few…but beware the possibility of a surprise reversal to the upside to take out the upper rail of the wedge.
Obviously not yet. If a breakdown comes it will be fast and severe and will turn that chart upside down. One candle could do that.
bearish? Gold versus the US dollar, copied from Rambus:
http://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24USD&p=W&yr=20&mn=0&dy=0&id=p11290718265&a=513904498
Send a memo to my mining stocks please.
With respect, Mr. Temple, you are fundamentally wrong about the dollar.
We are at end of Empire; end of petrodollar.
Nothing goes straight up or straight down.
The dollar was getting over-sold and this is now a temporary bump up for a few weeks before the inevitable decline continues.