Chris Temple from The National Investor – Wed 11 Jul, 2018

Potentially Escalating Trade Wars, Commodities Hit, and US Markets Generally Stronger

Yet again we had some news overnight about potential new tariffs on $200 billion worth of Chinese goods. This pushed markets down in Asia and is really hitting base metals. US markets are also down but to a much less extent. Chris and I chat about how these trade fears continue to dominate financial markets as well as some inflation data out of the US.

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Chris TempleCory Fleck

  1. On July 11, 2018 at 9:17 am,
    spanky says:

    HUGE H&S on the weekly yen chart ($XJY) has been triggered. We are talking about a target of 65-70. (This would be an inverted h&S on the $USDJPY chart). The implications for commodities is frankly dire.

    Say bye bye to the whole commodity complex. Conversely, the US stock market should rocket. Input costs going to 50 year lows folks!

    • On July 11, 2018 at 9:30 am,
      CaliJoe says:

      This reminds me of Doc who was the opinion that gold and silver aren’t going anywhere quick this summer unlike prior years. Natural forces in play at best. There would be quick 2-3 day bounce in miners but profit taking will keep them subdued.

      • On July 11, 2018 at 9:31 am,
        spanky says:

        Well, I don’t think the miners will be spared. I think they will break down HARD along with the yen here.

  2. On July 11, 2018 at 9:24 am,
    b says:

    Spanky, are you tryin to tell me my Aug gold low and here we go guess is kaput?
    So far my July bounce guess has been nutin but a fizzler.
    So much for historicals.

    • On July 11, 2018 at 9:30 am,
      spanky says:

      Commodities and even the POS yen might be making a long term base, but in the short run (the next 6 months) the yen and gold could drop significantly below their 200 WMAs and could break their 2016 lows. I think the yen is virtually guaranteed to do so. Why people would be bullish yen while the Fed is infinitely tighter is beyond me. The huge counter trend move in early 2016 was just that–the yen had fallen so far and so quickly a large bounce and consolidation before the next leg down was virtually guaranteed. But to think 2016 marked some sort of secular low is just a massive, massive gamble at this point. Like I said, the chart is telling us it will make a new low vs the dollar in time.

    • On July 11, 2018 at 10:37 am,
      matthew says:

      I hate to defend you — especially from yourself, but it’s only the 11th and gold hasn’t even taken out its 1238 low of less than 2 weeks ago.
      The pullback in the miners this week has come on low volume (bullish) and with positive technical divergences.
      So it’s too soon to conclude that you were wrong.


      • On July 11, 2018 at 10:42 am,
        spanky says:

        Gold will be taking out $1238 today in all likelihood. We are going to get a MASSIVE dump imminently (this week) that will shock even you.

        • On July 11, 2018 at 10:58 am,
          Matthew says:

          Maybe, but you guys are still too bearish for what we have today.

        • On July 11, 2018 at 11:43 pm,
          Excelsior says:

          spanky – Gold did not take out it’s 2017 low support of $1238 yet, and has bounced back up to $1243. Everyone will just have to wait to see if support holds as a double bottom here or not but the sentiment levels are low and Gold is due for a short-term reversal.

          As for the discussion above that B was having reading the seasonality of Gold it is called the “Summer Doldrums” for a reason guys. After Memorial day, traders “Sell in May and go away” and June & July are usually a boring range-bound whipsaw with a downward bias. The big surge is seasonally from late August into the month of September which is normally a very strong rally. We are still early for that.


          >> Gold 40 year #Seasonality #Chart from (1976-2015)

          • On July 12, 2018 at 7:41 am,
            b says:

            What was that Ex?
            You sayin my guess wasnt original?

            And here I was thinkin all my hours toiling over historical charts had found something secret like the lost Inca levitating stone found in the Gobi sands by the famous unknown Scandinavian mathematician sir Rodrick of the Bolivian Hotus group native to New Zealand and the Azores prior to 1437ce.

            Now your sayin its simply doldrums?
            So much for tin foil hats then.

          • On July 12, 2018 at 9:38 pm,
            Excelsior says:


  3. On July 11, 2018 at 9:34 am,
    spanky says:

    Think July ’14 to July ’15 type drop in the yen. GDX got cut in half during that window. I wouldn’t expect any different outcome this time.

  4. On July 11, 2018 at 10:24 am,
    spanky says:

    If/when gold breaks below the 200 WMA, the selloff could turn into an all out crash a la 2013. How long before Matthew uses the word “relief” in a sentence? Any bets?

    • On July 11, 2018 at 10:29 am,
      matthew says:

      It’s a relief to know that I’ve not been wrong about you. 😉

      • On July 11, 2018 at 10:32 am,
        spanky says:

        The only thing you have been wrong about is price action over the last 2 years.

        • On July 11, 2018 at 10:39 am,
          matthew says:

          That’s funny, then why am I no worse off for it and up significantly since you were squealing with fear in December?

          • On July 11, 2018 at 10:46 am,
            spanky says:

            I’m glad you can make perfect long trades in a bear market. That is quite the skill, I will admit.

          • On July 11, 2018 at 10:57 am,
            Matthew says:

            No, I’ve been far from perfect but perfection isn’t necessary.

          • On July 11, 2018 at 11:48 pm,
            Excelsior says:

            Agreed Matthew. I haven’t traded all my mining stocks perfectly either, but I was adding to positions the few days leading up to the Dec 2017 FOMC and caught much of the move up in the miners since then, and trimmed down some of the positions. Some I got in too late, and some out of a bit early, but there are a number of stocks that have done well since December and that was an easy pattern to trade on the fundamentals and technical set up.

            Perfection is not required, just capturing most of the trend.

    • On July 11, 2018 at 11:21 am,
      Matthew says:

      Hey spanky, copper should get some relief soon!

      Today’s drop does not yet show on the following chart…

      • On July 11, 2018 at 11:29 am,
        spanky says:

        I prefer the term “sucker’s rally.”

  5. On July 11, 2018 at 10:30 am,
    spanky says:

    AS I mention, the recent low in $hui was formed off a black candle. That low also represents the neckline on a H&S formation that projects to about 150. I would expect some sort of bounce there for a few weeks before $hui plunges to sub 100.

  6. On July 11, 2018 at 10:33 am,
    spanky says:

    $HUI is going to probably crash through 170 like a hot knife through butter, along with gold plummeting below its 200 WMA.

  7. On July 11, 2018 at 10:37 am,
    Paul L says:

    I am paying almost $7 per imperial gallon for 104 octane for all my cars. That looks to me like a sign that oil has topped at 75 and headed much lower.

  8. On July 11, 2018 at 10:46 am,
    Matthew says:

    My Brixton is up 15% this week:

    • On July 11, 2018 at 10:53 am,
      spanky says:

      It’s a sell/short at the 50 WMA, but it probably won’t even manage to get there in the next 6 months.

    • On July 11, 2018 at 12:04 pm,
      Charles says:

      I bought some of the American version. I will probably add some more when there is an opportunity. Anxious to hear more about their planned spin off of the Cobalt assets.

      • On July 11, 2018 at 11:45 pm,
        Excelsior says:

        Charles – I’m interested to see how Brixton’s spinoff of the Silver/Cobalt assets goes as well.

        Ever Upward!

  9. On July 11, 2018 at 11:01 am,
    spanky says:

    GDX a couple of cents away from making an outside week down. It will be sold like no tomorrow once 21.98 breaks.

  10. On July 11, 2018 at 11:05 am,
    CFS says:

    Look at oil. !!

  11. On July 11, 2018 at 11:10 am,
    Paul L says:

    Oil may have hit a major top at 75 now down near 5%. It could go a lot lower. Paying about $7 for 104 octane and the down south they complain about $3 gallon gasoline. Of our gallon is bigger.

    • On July 11, 2018 at 11:28 am,
      spanky says:

      Absolutely. Just like the rest of the complex, oil’s long term chart was absolutely destroyed between 2014-2016. The recent rally and consolidation was nothing but a rally in very very long term basing pattern or possibly a continuation pattern and oil is going even lower than $24 or whatever it hit previously. Oil will be basing for another decade in all likelihood.

      • On July 11, 2018 at 12:36 pm,
        Paul L says:

        I think BP CEO had expected oil to be averaging 55 for this year and basing plans on that price.

    • On July 11, 2018 at 11:47 am,
      Matthew says:

      I agree that 75 may be a significant top but I think oil is heading much higher after it consolidates in the 60s for awhile.

    • On July 11, 2018 at 6:54 pm,
      Paul L. says:

      mistake. Should be 94.

  12. On July 11, 2018 at 11:23 am,
    Bonzo Barzini says:

    I pay 2.73 for a gallon of 87 octane in TX. England leads Croatia 1-0. Vamos Angleterrrrrra!

  13. On July 11, 2018 at 11:42 am,
    Paul L says:

    Before Trump complains about Germany buying energy from Russia he should look in his own backyard. The US is importing the majority of products from China and that it makes it an equally large national security threat.
    Of course Ivanka gets special treatment from China to run her business and there will never be tariffs on her goods being manufactured in China and imported back. The Trumps are making America great again by outsourcing from China for materials and labour for his projects.
    He is shipping jobs overseas. A different standard for the Trumps.