What A Pause In Rate Hikes Mean For US Equities, Commodities, and Other Central Banks
Chris Temple joins me to recap the recent statement from Jerome Powell and the two words everyone is focusing on, just below. This was referring to rates being just below this neutral level which is where the Fed would pause. We play out the scenario where the Fed pauses either in December of early 2019 and look at where the money could flow.
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SLV’s full stochastics on the daily chart haven’t hit overbought in over 5 months. That is absolutely insane. If it were to break down now… wow. Only silver is capable of this sort of stuff!
Off topic:
KTN.V breakout:
http://schrts.co/56Lz63
Weekly:
http://schrts.co/Pk4TDE
Watch for a weekly close above .155…
http://schrts.co/aDKFVD
Daily with Fibonacci fan:
http://schrts.co/HFdfxg
Was there any company specific news to cause that pop? If not, that’s a positive sign for the sector.
The most recent news was 10 days ago:
https://kootenaysilver.com/news/kootenay/2018/kootenay-options-high-grade-columba-silver-project-in-mexico
Matthew. Thanks for the KTN chart.
As a shareholder, it made me happy to see a silver miner going up in this environment.
You’re welcome, Ex. I’ve got quite a few shares myself.
Good work, Matt
Thanks Marty
The odds of a move of any significance pre-FOMC is likely small the more I think about it.
Tomorrow is probably the most important day for GDX prior to the Dec. 19 meeting based on the daily Ichimoku cloud. It just needs to close above the 18.90 level tomorrow. After that I’ll bet it more or less remains rangebound as the 50 and 100 dmas converge on each other.
GNX (commodity index):
http://schrts.co/ANkk67
The monkey wrench here though is that after such a massive decline, even under the best circumstances, one would expect a retest or marginal new low, possibly with a divergence.
Looking at GCC, the 200 WMA should actually be flattening out here. Even if the bear continues, you gotta believe we would get at least a test of the 200 WMA before another leg down.
The charts are all a mess, but the primary trends look to still be intact for now. As long as the Dow can hang on to the 50 WMA, I am reluctant to say a bear market has started. While I believe the set up for the miners is there and its worth taking a stab here on any weakness, I can’t rule out a continuation of the 2+ year bear trend yet.
UUP (USD) looks likely to fall from here:
http://schrts.co/86wAcF
Thanks for all your efforts Matthew
Aussie stocks have been ok during this year but are probably richly priced v US/Canadian PMs. But if US gold price can get a wriggle on…they may be able to grind higher
So need UUP to take a leg down
Cheers
Thank you Chris. Here’s to UUP going DDOWN.
Cheers
lots of ugly little reversal candles today ($xjy and $silver to name a couple).
I think the odds of any sort of pop in silver before the December FOMC is very small. Looking at GCC’s daily ichimoku cloud is not encouraging at all for any sort of sustained uptrend (it’s trading below a totally flat bottomed cloud currently). The closest transition point is on January 2, and it is a 1 day window. It could get uglier in the next 2 months for sure.
Agreed. The pop the last few years has been after the Dec FOMC meeting.
The time to position is in any weakness leading up to the Fedbabble.
Fedbabble… I like that term. The upcomong FOMC Dec meeting holds, I believe, alot of importance to determining whether gold can maintain the year on year uptrend since the Dec 2015 low. The yellow metal needs some fresh speculative buying to break the 200 week ma. Then and only then can it make a run towards the $1280 region which if it held by years end would see a continuation of that uptrend from Dec 2015.
Good thoughts Ozibatla. Personally, I haven’t seen anything negate the fact that Gold bottomed right after the very first rate hike back in Dec 2015 (3 years ago now).
GDX, GDXJ, SIL, and SILJ are still above their Jan 2016 lows as well, so despite the sideways to down action for the last year 1/2, there have not been any lower lows under the Major lows of a few years ago.
The one that is worrying me is Silver, but it is normal for it to outperform to the upside and downside, so it’s corrections are much more extreme than Gold’s are (but then again, so are Silver’s rallies).
I want to see how PMs react coming out of the Fed meeting & rate hike in December, and if we get the seasonal Q1 Run from late December into Jan/Feb.
Ever Upward!
Agreed. If silver does break the low it set back in 2015, there could well be some follow through selling that could have a flow on effect into the miners as well as possibly dragging gold down. At this stage however, it seems as though the muddling along continues,: nothing drastic to the downside, nor to the upside. That meeting in Dec could change all that.
For this to happen we will need to see a short term price spike similar to what occurred in Dec 2016 and Dec 2017. I gotta say at this stage, that is unlikely.
Don’t need a price spike per se. I would imagine all gold has to do is tag its declining 50 WMA in the next 6 weeks. That’s like $40 away if I recall—which really isn’t a big move. After that, a mild 4-6 week correction, perhaps back to the 20 WMA, could set up a serious move higher.
Yeh by short term price spike, I meant something in the order of $60-$80.
The next 3 trading days are massively important for silver. It needs to get above its 50 dma (at 14.46) and hold it.