Ed Moya – Financial Markets Big Move Down. Is It All The Fed and Russia-Ukrane Tensions?
Ed Moya, Senior Market Analyst at OANDA joins us to recap the down day for markets today. Outside of small moves up by the US Dollar, gold and bonds everything is aggressively moving lower. While most headlines today are pointing to the growing tensions between Russia and Ukraine as well as the upcoming Fed rate hikes that are leading this shift to more risk-off. We tie in the moves in gold and cryptocurrencies to the big picture theme for both.
Lot of bears……….. were wrong on the down side….. goes to show, …
referring to gold……
so far so good for gold, holding like sh*t to a blanket. A dip below last weeks low before fed day wednesday blabber with quick recovery following the blabber and above last weeks high has me adding another third. The opposite action would not be good at all for the immediate term. Producer underperformance the metal continues to stink however.
On conventional markets great hope now is a rally to sell vs the dip to buy.
Somebody’s buying the dip!
yup, and may at least with the fed blabber.
On Friday I posted:
GDX:QQQ weekly:
https://stockcharts.com/h-sc/ui?s=GDX%3AQQQ&p=W&yr=3&mn=9&dy=0&id=p80554104599&a=1101101871
A pullback in this ratio next week would be a gift to those looking to sell the stock market and buy the gold miners.
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Today, GDX:QQQ barely dipped into Friday’s gap before reversing strongly.
Gold Up, Fed Policy Decision Looms and Eastern European Tensions Remain
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By Gina Lee – Investing.com – Jan 23, 2022
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“Gold was up on Monday morning in Asia but remained little changed. Investors continue bracing for the U.S. Federal Reserve’s latest policy decision, while concerns over inflation and geopolitical tensions in Eastern Europe burnish the yellow metal’s safe-haven appeal.”
“The Fed will hand down its policy decision on Wednesday. It is widely expected to tighten monetary policy at a faster pace than expected to curb the continuously high inflation, now viewed as the biggest threat to the U.S. economy in 2022 according to a Reuters poll.”
“Tensions between the U.S. and Russia over Ukraine continue, with the U.S. on Sunday ordering the departure of eligible family members of staff from its embassy in Ukraine. It also urged all its citizens to leave the country as the risk of armed conflict increased.”
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https://www.investing.com/news/commodities-news/gold-up-fed-policy-decision-looms-and-eastern-european-tensions-remain-2745888
SILJ vs SPY finished 4.35% off of today’s low.
https://stockcharts.com/h-sc/ui?s=SILJ%3ASPY&p=D&yr=0&mn=9&dy=0&id=p99166570860&a=1099398016
Yamana(AUY) up 1.4%, SGI flat and cannabis etf(MSOS) up slightly.
The Plunge protection team was probably at work today—-they’ll probably want to ease this market down slowly over time.
Hi DOC……It’s called … ” MANIPULATION “…. It happens every day , in all markets. Free markets , ceased to exist many – many years ago…. Thats why i keep saying , the charts dont work anymore.
I think the action is mostly legitimate. Traders and and buy-and-hold dumb money would logically buy a big gap-down into daily oversold readings especially when they occur at support(s).
https://stockcharts.com/h-sc/ui?s=%24COMPQ&p=D&yr=1&mn=3&dy=18&id=p93719726804&a=954015424
I outlined on the weekend why I thought AMZN and NFLX could turn this week and my arguments were only made stronger by the gaps lower at the open. All the big gaps followed by piercing Bollinger band and other supports are reason enough for today’s action and a broad fizzling out among stock indices by the end of the week is still perfectly possible.
https://stockcharts.com/h-sc/ui?s=SPY&p=W&yr=5&mn=0&dy=0&id=p58270769574
AMZN fell 28% in less than 3 months as it hit an 82 week low so it should be no surprise that a lot of investors would see it as a bargain and then jump at the chance to buy a capitulation gap down. Don’t forget that there are a lot more Kool-Aid drinking paper bugs than there are gold bugs.
https://stockcharts.com/h-sc/ui?s=AMZN&p=W&yr=5&mn=0&dy=0&id=p48423416668&a=636788691
Good point, millions following Amazon while mostly a few old geezers looking at gold.
Big move down? Did I miss something? Uh, let’s sanction Russia after they invade. That’ll halt their ICBM’s in their tracks…
Like uranium stocks, rare earths stocks have a lot of correcting to do versus silver (and gold) stocks.
REMX:SILJ weekly:
https://stockcharts.com/h-sc/ui?s=REMX%3ASILJ&p=W&yr=5&mn=0&dy=0&id=p24995606998&a=1102536658
The same goes for lithium stocks which have been topping versus silver stocks for months.
LIT:SILJ weekly:
https://stockcharts.com/h-sc/ui?s=LIT%3ASILJ&p=W&yr=3&mn=3&dy=0&id=p75828863728&a=997311027
Good charts Matthew. Looks like Silver stocks have some room to run on many other commodities in 2022, be it Uranium, Rare Earths, or Lithium (all of which did quite well over the last 2 years). It makes sense that since Silver stocks underperformed, that they’ll have more room to surprise the markets to the upside. I’m stocked, cocked, locked, loaded, and ready to fire in my portfolio as far as Silver miners… So let’s get the party started in 2022.
Synchronistically, we’ve been doing a lot of interviews with Silver companies lately. Currently we have up both the Defiance Silver and Vizsla Silver interviews, with plans to have up two more silver companies after that over the next few hours. Hi yo silver…. Away!!
A couple more reasons today’s rebound in stocks made perfect sense: The S&P has not been so daily oversold since the covid crash of early 2020 nor had it gone below its lowest pivot point support since then.
SPY
https://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=0&mn=11&dy=11&id=p16881912071
Bitcoin bounced precisely at the S1 pivot point support but its problems are far from over.
https://stockcharts.com/h-sc/ui?s=%24BTCUSD&p=W&yr=1&mn=11&dy=0&id=p91457562289&a=1102557845
It is more daily oversold than it was last May so it might bounce have a decent short term bounce.
https://stockcharts.com/h-sc/ui?s=%24BTCUSD&p=D&yr=0&mn=10&dy=11&id=p13994260640&a=1102559533
Yes, after a 50% crash in Bitcoin, it may get a tradable relief rally soon, but it is very telling that after a whole year of Bitcoiners pounding the table that it was the better store of value and inflation hedge compared to gold, that narrative completely bit the dust.
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The complete demolition of Bitcoin from the November 9th high of $69,000 down to $34,000 last week, happened all in 2 months, and those were the 2 months showing the hottest inflation data in 40 years. Yeah… some “inflation hedge” and a very dubious “store of value.”
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Bitcoin also claims to be a digital currency, but currencies don’t typically get chopped in half in just 2 months, so even that claim is silly at this point.
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Bitcoin remains a very volatile speculative tech stock, and like many of the Cathy Woods Arc Innovation “growth” and emerging tech stocks, it got hammered over the last few months. It’s been fascinating to see it all play out…
Whoever mentioned they bought some Lion One yesterday, had some good timing as some good drill results out today. Narrow widths but really impressive grades. Soon as the artificial smashes slow down, we can see how Lion One performs from here.
This is a bad week for the financial sector.
XLF vs GLD weekly:
https://stockcharts.com/h-sc/ui?s=XLF%3AGLD&p=W&yr=7&mn=0&dy=0&id=p24641082322&a=1101859294
Nothing to worry about here:
SLV
https://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=1&mn=3&dy=0&id=p45944578855&a=649141163
the world is coming apart…………… hang on to your hat……….