Chris Temple from The National Investor – Wed 27 Jun, 2018

The Dangerous Game Being Played For Global Trade

Today we are seeing a couple sectors and markets continue there noteworthy moves. Oil is spiking again while the Chinese markets and currency continues is move down. On the back of these moves the USD is back above 50 on the USD index and interest rates on the long end are not moving despite some US market volatility. Chris Temple joins me to address all these market moves and summarizes where the world stands with trade talks and more so rumors about moving away from the US.

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Chris TempleCory Fleck

  1. On June 27, 2018 at 9:16 am,
    Snowy says:

    Isolationism. It is going to be cheaper to move production offshore with tariffs. Companies will continue to move away from the U.S. This will weaken Trumps position

    • On June 27, 2018 at 9:52 am,
      BDC says:

      When Nixon/Kissinger opened the China door to cheap labor and Reagan/Volcker put the cost of capital formation out of reach, the deindustrialization of America was assured. Our casino economy began.

      • On June 27, 2018 at 10:23 am,
        Temple says:

        Spot on (unfortunately so) — and also, demonstrates that this all came about not due to foreigners “gaming” the US but by deliberate design of “Americans”

  2. On June 27, 2018 at 9:44 am,
    CFS says:

    I agree with Mr. Temple’s analysis, with one exception.
    I have been assuming that the President was not as intelligent as a politician or deal-maker as he, himself, thought. In light of the President’s actions and successes to-date, I am forced to reconsider that judgement.
    I believe Trump wants low/zero tariffs trade with most countries and he has a reasonable chance of achieving it. In the light of his success of negotiating his path through the swamp and removing swamp-critters, I am going to give him the benefit of the doubt over trade negotiations.

  3. On June 27, 2018 at 9:50 am,
    CFS says:

    I do believe, however, Mr Trump’s downfall, however, will be the debt problem. In his business operations, he has taken the route of bankruptcy, when faced with an insurmountable debt problem. While balancing trade will help, the over-spending by the Federal Government shows no sign of abatement and I do not see Trump attacking this millstone capable of destroying the economy.

    • On June 27, 2018 at 11:10 am,
      Temple says:

      Tragically — as I have worried all along — Trump might end up the whipping boy to “discredit” many a good principle – populism (genuine, not his occasionally false type), defending our borders, tax cuts and much more. All because the odds are strongly against him getting through even a first time without a major upheaval as you suggest. And unlike his various businesses he’s been able to blow up debt-wise and then walk away from the stakes are much higher here.

  4. On June 27, 2018 at 11:10 am,
    Charles says:

    Avi Gilburt’s view on GLD:

    “Currently, we have almost reached those support levels to which we were pointing weeks ago. For those that have read my metals analysis over the last few months, you would know that my perspective has been that, as long as GLD holds the 119 support region, we still have a very powerful rally setup in place. And, as long as GLD holds that 119 region as support, the market still retains a set up to rally strongly towards the 150 region in 2018. It would take a break down below 117.40 to invalidate that immediate setup, but a sustained break down below 119 would begin to get me concerned.”

    GLD is currently trading at $188.85 up from today’s low at $118.59. Tomorrow is a full moon which often coincides with major bottoms in gold. The close today and tomorrow will be interesting to say the least. It could go either way.

  5. On June 27, 2018 at 11:32 am,
    spanky says:

    Silver is going to tag the lower BB before this is over on the daily chart. It’s 25 cents away and is bending sharply down. Prepare for a very big drop in the next day or two.

  6. On June 27, 2018 at 11:39 am,
    Charles says:

    I agree, its looking a bit bleak at the moment. Seems like one final flush to remove any weak hands. I am thinking the dollar needs to hit 96 before the turnaround and it still has a ways to go to get there.

    • On June 27, 2018 at 12:30 pm,
      spanky says:

      It’s always “just one more flush.”

      That is the sine qua non of the slope of hope.

    • On June 27, 2018 at 3:18 pm,
      b says:

      final flush?
      this “final flush” has been coming for years.

      • On June 27, 2018 at 7:05 pm,
        Excelsior says:

        The final flush already came in December 2015. This is merely a courtesy flush. 🙂

  7. On June 27, 2018 at 12:12 pm,
    spanky says:

    GLD breaking below its weekly Ichimoku cloud currently. Not good.

    It managed to claw back after something similar happened in late 2016, but I’m sorry, this is ugly action and even if we reach a low soon, there are no guarantees we won’t be making a lower low within a couple of months. Certainly is in no way consistent with a trending bull market.

  8. On June 27, 2018 at 12:15 pm,
    spanky says:

    GLD is almost 100% guaranteed to hit it still downward sloping 200 WMA sometime in the next week or two. Wherever it bottoms next, the now declining 50 WMA is going to be a point where it will be shorted.

    Terrible chart action. The major long term MAs are rolling over here. Again, none of this is in any way consistent with a trending bull market.

  9. On June 27, 2018 at 12:17 pm,
    spanky says:

    Buy buy? No, bye-bye.

  10. On June 27, 2018 at 12:20 pm,
    spanky says:

    Boom, silver getting hit intraday now. This next few days will be interesting.

    Ichimoku cloud for SLV on the weekly chart says lower prices are in our future. No hope for getting above $16 until October.

  11. On June 27, 2018 at 12:22 pm,
    spanky says:

    Well at least silver hit its lower BB today. Maybe a near term low is very close in time.

    • On June 27, 2018 at 7:17 pm,
      Excelsior says:

      Silver was down 4/10ths of 1 percent today…. not 40%, so I’m not sure it was getting “hit” very hard. If anything the action in the PMs has been boring – just like we’d expect seasonally after the “Sell in May and go away” trend into the Summer Doldrums. There are always fits and starts in any market though, so things may get a bit more volatile soon.

      A short term bottom is likely close at hand, because the sentiment is extremely low in Gold & Silver. Really, most investors are not even paying attention to vast majority of the metals & mining sector (especially the monetary metals). It will be interesting to see if conditions in many markets do reverse around the 28th during Full Moon Fever……

  12. On June 27, 2018 at 12:31 pm,
    CFS says:

    What drives the price of gold?

    Is it physical supply and demand?
    I would suggest not. Perhaps a slight dependence for large amounts, but, in general, there appears to be little dependence of price on demand or supply.

    Given that sentiment correlates with demand, does not a lack of correlation with demand imply there is no dependence on sentiment?

    The price appears to be dependent on the COMEX.
    How many times do we have to prove that the COMEX is manipulated?

    I.E. Is it not stupid to try to find ANY other correlation?

    Only what the criminal behavior of COMEX operators counts!

    • On June 27, 2018 at 12:48 pm,
      spanky says:

      USD liquidity. The USD is on an absolute tear at the moment. Looks like it made a major, long term bottom back in January to me.

      I know the Austrians are squealing that it can’t be…. but it is. All that matters to gold is the USD relative strength compared to other currencies. The absolute quantity of dollars is completely irrelevant, clearly. At least in the short run (and by short run I mean the lifespan of an average human).

      • On June 28, 2018 at 9:18 am,
        Matthew says:

        Your understanding of the Austrians needs a lot of work, Spanky.

  13. On June 27, 2018 at 1:05 pm,
    Jason says:

    To the KE clan. I enjoyed shorting YOUR 401Ks today. Thank you for the profits. 🙂

  14. On June 27, 2018 at 1:26 pm,
    spanky says:

    What is going to send gold surging to new heights on the next bounce pray tell? The Fed raising interest rates (while commodity prices are tanking)??? That’s what is going to send gold to the moon?

    Between 2014 and 2016 we saw a once in a lifetime drop in commodities. The fact that the dead cat bounce happened to coincide with the Fed’s first interest rate hike lead people to believe commodities were in some sort of new raging bull and that rising interest rates were somehow inflationary by themselves? How wrong those people are and have been.

    Invest in how things are, not how they should be.

    • On June 28, 2018 at 4:08 am,
      Excelsior says:

      I’ve read a number of editorials and heard a number of interviews from the recent resource investing shows (and even here on the KER) where pundits have dismissed that move in 2016 as nothing more than a “dead cat bounce” or a “relief rally” but those comments are wrong on many levels technically.

      First of all, a “dead cat bounce” or “relief rally” is when an equity is still in a cyclical bear market and bounces, but will resume the downtrend; and that is clearly NOT what happened in Gold as it has never gotten anywhere close to the $1045.40 low from December 2015 in 2 and 1/2 years.

      In fact, some pundits seem to have amnesia that in 2018 the high in Gold ($1369.4) actually already took out the 2017 high lf ($1362.40), so Gold is much closer to making new highs if anything.

      When Gold surged for the first 8 months of 2016 it took out a number of prior peaks & the 2013 spike down trough that really accelerated the bear market, and those hadn’t been cleared in years. That makes 2016 an “impulse leg” higher because it took out the most recent prior peaks, (actually gold took out about 3 critical prior peaks).

      Next up, Gold pricing surged up through a number of key prior moving averages (233, 144, 89) day EMAs, that it hadn’t surpassed in years. This was also true on the weekly charts. In addition, the EMAs reverted back to the shorter ones on top and the longer duration ones on the bottom, where in the bear market the shorter were on the bottom and the longer were on top. Those were 2 more key clues that the bear market had truly end in the metal in Dec 2015. Relief rallies don’t do that.

      Lastly, 2016 broke down most of the normal seasonality trends in an outside year where the metals continued rallying through the PDAC curse in March, and then powering through the remainder of Spring and into the Summer Doldrums to new highs. It was very unusual and strong action.

      Finally, Gold had gotten too far ahead of itself and corrected back down during late Aug – Oct (a time that is typically a strong seasonal period for Gold). That move up for the 8 months into August showed how strong the energy being released was and was yet another tell that this was not just a fluke or a relief rally, so the consolidation since then makes sense to digest those gains.

      Pundits that are now dismissing the move up in 2016 as some kind of novelty, or just a nice little “dead cat” bounce don’t seem to understand the gravity of that move up, or have a clue how technical analysis works. The overhead resistance that was sliced through like a hot knife through butter, and that definitively ended the bear market once and for good — That’s why Gold is nowhere close to breaking out to new lows below $1045.40.

      “Invest in how things are, now how they should be…” (ie. much closer to making new recent highs than new lows).

      Gold has been in a new bull market since the tail end of Dec 2015 and has been making higher lows ever since. It is nowhere close to $1045.50, and took out the 2017 high this year.

      Unless Gold takes out $1238 to the downside then even that trend upwards of higher lows has not been negated either.

      Let’s just say that $1238 falls and Gold does make a lower recent low…. does that mean it will plunge down $200 more and take out $1045.40 from the Dec 2015 low? Incredibly unlikely, so people need to deal in the real. The low for Gold is in from 2 1/2 years ago, and the bias and trend since then has been a bottoming process and slow grind back upwards (ie…. an ideal time to accumulate good mining stocks during weak period)

  15. On June 27, 2018 at 1:57 pm,
    Charles says:

    On a more positive note USAS had an engulfing candle today albeit on fairly low volume, but ended near the high of the day. I also like the fact that the Gold/SPY chart has a lot of positive divergences on it. So while gold could still continue down, it seems poised to at least fall less hard than the general stock market. That is consistent with the performance I had in my junior miner portfolio which was down small today and much less than the general markets. Call me crazy, but I don’t think there is a lot of downside in the miners short term.

    • On June 27, 2018 at 2:21 pm,
      spanky says:

      Not going to say it hasn’t found a short/medium term low, but it did the same thing on April 25th too. hell of a bull trap. Of course, we are at a very different stage of the cylce, so I would expect some sort of fairly significant bounce soon. Going on purely technicals and not the fact that I am a biased deluded gold bug who believes the market meets out justice, I would short it when it tags the 50 WMA. I don’t think it will be able to break above that MA for a long, long time.

    • On June 28, 2018 at 9:19 am,
      Matthew says:

      A couple of USAS fork supports have held for over a week:

      • On June 28, 2018 at 10:22 am,
        Charles says:

        Thanks for the chart Matthew. I just wish the fork wasn’t downward sloping! Lots of the secondary indicators are looking close to turning.

  16. On June 27, 2018 at 2:01 pm,
    Silverdollar says:

    Wow. What a day in the markets! Took a break about noon and didn’t look again until after closing. Couldn’t believe my eyes. Down again, pretty big this time on the Nasdaq. Things are about to get serious IMO. Nobody was buying the dip and the Nazdaq closed on the almost exact low. I look for a repeat tomorrow before any relief and even then it may not appear.
    Like Chris’ comments. Personally, I’ve always been more afraid of the people calling the shots behind the curtains. We really don’t know who in the hell they are. Trump is a puppet like every president since Nixon. Some more, some less.
    The more disturbing fact today was the announcement that Kennedy is retiring. His replacement should speed up the cultural wars as if that’s good. Damn place won’t be worth living in but where to go…….?

    • On June 27, 2018 at 2:15 pm,
      spanky says:

      Whatever. The Dow hasn’t even touched its rising 50 WMA yet. It hasn’t touched that MA in almost 2 years. Meanwhile, gold has broken significantly below both its 50 WMA and 100 WMA. It’s time for goldbugs to look at the scoreboard.

      I would expect the Dow to drop below the 50 WMA on this correction to “terrify” longs. The weekly MACD hasn’t even reached neutral yet!

      Expect commodities, gold and especially silver and the miners to get smashed as the Dow makes a completely normal correction.

  17. On June 27, 2018 at 3:12 pm,
    spanky says:

    GLD closed below its 144 and 233 WMAs today. Long term ultra bullish! Just one more flush…l

  18. On June 27, 2018 at 7:10 pm,
    CFS says:

    Bill Gates talks about cryptos: Clif High.

  19. On June 28, 2018 at 5:27 am,
    Excelsior says:

    Here’s a few smaller/mid-tier producers in Gold/Silver that have provided good opportunities since the Dec lows of 2017, for those paying attention.,SGI.V,PRU.TO,IPT.V,MYA.V,HMX.V&p=4&O=011000

    • On June 28, 2018 at 5:28 am,
      Excelsior says:

      Super scary First Majestic chart from 2018. (ooooohhh so frightening!!)

      • On June 28, 2018 at 5:28 am,
        Excelsior says:

        I’m freaking out over this Endeavour Silver chart man…… So spooky!! (lol)

        • On June 28, 2018 at 5:29 am,
          Excelsior says:

          The end of the world in Gold miners is nigh…… K92 scares me as it breaks out to new highs….

          • On June 28, 2018 at 5:29 am,
            Excelsior says:

            Silver miners are in trouble so tighten up your vest…. unless you got positioned in Silvercrest:


          • On June 28, 2018 at 5:30 am,
            Excelsior says:

            Gold miners are in trouble… I guess that’s why Guyana Goldstrike just doubled….


          • On June 28, 2018 at 5:31 am,
            Excelsior says:

            Adriatic had a monster discovery drill hole earlier this month and has tripled since then…

            Yep…. what terrible returns these miners offer….. (gimme a break)


  20. On June 28, 2018 at 5:32 am,
    Excelsior says:

    Oh….. and stay the heck out of Copper stocks like Trilogy Metals…. unless you’re interested in getting a trilogy of gains…..