VIX below 11 and momentum continues into US stocks
Today with Chris Temple we quickly touch on gold’s move down and dive into what Dow over 20k means for momentum chasers. We are seeing a divergence between the Dow move and the US dollar which is moving down today. Even with a pullback in precious metals Chris has still be recommending resource stocks which are preforming well.
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Who knows? On the surface that’s extreme and should mean a pause/pull back. But remember that the VIX is a measure of the cost of options; not a direct reflection on stock prices. So even a pull back not marked by any big news or reason to fear won’t mean the VIX moves up that much.
That’s a great point Mr T. The VIX can also move up on a day where stocks are rising if there are investors hedging their bets with options.
……still, I’ve been adding to my UVXY position last week and this week. Today stung a bit on the pull down from DOW 20,000 enthusiasm, and it may have a few days of more bullish behavior, but if we stay lofty into the end of the week then I’ll likely add one more tranche of UVXY going into next week.
Mr T – you may like this video of Brent Cook interviewing SolGold in Ecuador:
Better late than never for Brent Cook, I guess!
😉
silver needs one of those alert devices they give old people ……..”help I’ve fallen and can’t get up”
Looks like my call for lower interest rates two weeks ago is going to stay wrong (that was not a big-picture call, I’ve been convinced that rates are going to trend higher).
$TYX now looks like it’s going much higher:
I guess that means we’re moving out of the eye of the hurricane. I was hoping we’d get one more respite.
My post on the 10-year from a couple weeks ago:
http://stockcharts.com/h-sc/ui?s=%24TNX&p=W&st=1980-01-01&en=today&id=p73726127179&a=499583201
I don’t expect major problems until it breaks 3%, but what do I know?
FWIW. The fact that options on the COMEX (CRIMEX) expire this Thursday likely has as much or more to do with the smash in gold this week. Simply makes sense, especially since the USD is sitting quietly near 100. Turk explains it in his interview:
http://kingworldnews.com/james-turk-on-short-term-trading-and-the-reason-gold-silver-prices-are-going-to-skyrocket/
Silverdollar:
The options scenario seemed plausible.
I checked the week of options expiration for the last 5 months,not including January.
3 out of the 5 months the price of gold did go lower into expiration.
2 out of the 5 gold went higher the week of expiration.
September and October gold went higher the week of option expiration.
August,November,December, gold went lower the week of option expiration.
And of course January will be lower two,making it 4 out of six or 67% percent of the time for the last six months.
The actual behavior seems to depend on where the stops are and the number held by commercial banks.
When the banks are heavily net short, the market is forced down, to trigger stop orders on longs.
I was watching the precious metals market this morning, monitoring volume.
I am now positively convinced there is no free market anymore.
I watched Pt and Pd move down $20 on NYMEX open.
OK, I thought there must have been some orders overnight to sell, and that caused the move down. GBut as I watched there was NO significant volume. The price was just moved down, without any trading to cause it. That is simply not normal market action.
So I then switched to watch US dollar index……that was not moving.
+1
Klondex drills 0.8 m of 62.8 g/t Au at True North
2017-01-24 19:58 ET – News Release
Mr. John Seaberg reports
KLONDEX ANNOUNCES NEW DISCOVERY AT TRUE NORTH; DRILLING CONTINUES TO EXTEND KNOWN MINERALIZATION
Klondex Mines Ltd. has provided an update on underground drilling at its True North gold mine in Manitoba, Canada. The drill results herein are not included in the mineral reserve and mineral resource estimates released on Sept. 12, 2016. The company expects to provide an updated mineral reserve and mineral resource update for True North in the second quarter of 2017.
S&p might break 2300 today. It only took a tiny dip. 2297 at 2pm which is a slow time and things should pickup from 3 pm.
I mentioned a day or two ago the market was about to rally and gold would head down. The January correction never happened and it was just sideways trading.
I agree with Mr. T. We are entering a neo-merchantile era.
Yeah, that was a good point from Mr T. on the Neo-Mercantile Era.
Chris, with the VIX under 11 do you think it is due to break up soon or will it take longer?