Extended Market Wrap – US Markets, L-T Yields, Trade Wars, The Yen, and Chinese Rate Hikes
Chris Temple joins me to wrap up another interesting day in the markets. The markets closed at their lows for the day with the Dow down over 700 points. Long term yields were also hit with the 10 year touching 2.80% but not breaking lower. Volatility spiked again tuning this quarter into the most volatile in history. We also also look internationally at the move up in the Yen and Chinese rate hikes. So much to consider which is why this is one of our longer market wraps.
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“A History of the Fed Funds Rate Since 1979”
Cartoon source: Hedgeye
$DJIA – Dow Industrial Average (Last:23,957)
By Rick Ackerman – Posted March 22, 2018
“Now wasn’t that refreshing! Sellers drove the Dow Industrials 724 points lower on Thursday, displaying unaccustomed boldness and panache that perfectly matched the spirit of the headline I’d sent out to subscribers the night before: Stocks Look Primed to Plummet on a Dearth of ‘Good’ News. And there is even more good news for those who had begun to despair of the possibility that sanity would ever return to the stock market. The next dose of sanity — call it a second spoonful of castor oil — is all but guaranteed to knock the Dow Industrials down to at least 22,822, a Hidden Pivot target that lies 1135 points below today’s close. (Note: If that number is exceeded by more than a few points, keep 22,544 in mind as an alternative.) A bounce from either will almost surely be tradable, and I don’t foresee this selloff exceeding the lower number, at least not before the Indoos have rallied sharply enough to suck everyone back in.”
I sensed weakness in the market so I sold off on the rallies last week to 100% cash as I was waiting for the s&p to go to the 200 day. I missed the strong rally this week in energy (my main focus) and could have made some significant money. Started buying energy stocks back today as they look ready to break out.
Bitcoin Provides Freedom, Says New PBoC Chief as China Opens Doors to $27 Trillion Payments Market
March 22, 2018
“For the first time in history, the Chinese government and its central bank, the People’s Bank of China (PBoC), has opened its $27 trillion payment market to the world. Foreign firms are now allowed to apply for licenses to operate within China, competing against local service providers.”
Bitcoin Could Become Illegal Almost Everywhere, After Shocking Discovery in The Blockchain – There’s something hidden inside it.
Peter Dockrill – 22 Mar 2018
“The Bitcoin world is coming to grips with a shocking revelation that could potentially threaten the very existence of the world’s foremost cryptocurrency.
“An analysis of the Bitcoin blockchain – the publicly accessible ledger of transactions upon which the system is built – has revealed this vast trove of data is irrevocably tainted with unremovable links to illegal child pornography, which are inevitably distributed among and by all users of the currency.”
“The discovery of this – in addition to other questionable and possibly outlawed content stored within the blockchain – hypothetically makes Bitcoin ownership illegal in almost every country that has laws against the possession and distribution of images of child abuse.”
“That’s the view of a team led by researchers from Germany’s RWTH Aachen University, who sifted through the blockchain to examine how much “arbitrary data” it contained.”
This probably an erroneous legal interpretation.
Also it is a stupid action by the person who inserted the links into a block with URLs to pornography.
Because actions in a block are NOT anonymous; the perp can be tracked down and prosecuted. It does present a possible legal problem more for miners.
The issue appears to be that those links were embedded as “arbitrary data” but not necessarily tied to a specific user on the ledger.
It also begs the question of what else may turn up to be buried in those blocks.
Gold Should Have A Good Year But Silver Should Outperform Gold
Ronald Stoferle: March 22, 2018
One would think silver should be cut loose, but, JPM all the banks board of directors. needs to go to jail first……
Silver will play catch up to Gold in due time…. then it will blow past it in outperformance.
Silver and Gold both up another 1% in overseas trading this morning, and may still buoy an environment for the miners to rally for a bit longer and have a better weekly close.
The Case for Precious Metals
Ronald Stöferle – #AudioInterview
“Will it soon be gold’s time to shine once again? Listen to the talk by Rick Rule of Sprott Global Resources, Simon Mikhailovich of Tocqueville Bullion Reserve and Ronald-Peter Stoeferle about gold.”
https://www.incrementum.li/en/journal/the-case-for-precious-metals/
Jordan Roy-Byrne: 2018 Likely to Set Off Large Gold Rally
Palisade Radio – Mar 23, 2018
“Jordan discusses the latest in the gold market and how it has been quite subdued. He is not predicting an imminent breakout although one should be looking to take advantage of the value out there. Juniors are unlikely to get much cheaper than where they are now, so there is minimal downside risk. The market will improve it’s just a matter of timing. There is still a bit of time before we make the run up to $1375. Now is the time to do your research and find the best companies.”
“The price of gold has been driven by the weak dollar, and the market is anticipating higher interest rates on the long end. Long-term bond yields breaking out will cause a lot of issues with the economy, the government, and corporations. This increase will be bad for the stock market and will likely cause a move from cash into gold. Two or three quarters is still needed for things to get set up for gold, we are not there yet both fundamentally and technically. ”
“The mining sector has endured the worst bear market in ninety years, and some mining equities are an incredible opportunity. The quantitative easing policies of the Federal Reserve has incentivized companies to borrow at very low rates when rates rise we will find that real capitalism has been lacking.”
“He compares recent market patterns to several similar market corrections and why this indicates a more extended consolidation period. There isn’t much downside in price. You should look to accumulate now and take advantage of values now, don’t wait for the breakout. You will be happy you bought early.”
The market will improve it’s just a matter of timing. There is still a bit of time before we make the run up to $1375. Now is the time to do your research and find the best companies.”……………..DITTO ON THAT ONE>>>>>>>>>>>>
After looking at this mornings jump in gold, “the run up”, might be sooner than we think….just saying…… 🙂
Yes Gold and Silver still charging higher this morning. I mentioned we’d likely get a post FOMC bounce but expected it to be muted. So far it is has been nice, but nothing to get too excited about. However if Gold gets back up above this year’s high of $1365.40 (which was higher than 2017’s high of $1362.40) then it may have a shot at closing above the 2016 high of $1377.50. Until that 2016 peak is taken out, then we are still in the same range-bound trading channel and the institutional funds and money sitting on the sidelines won’t be coming into the sector. Gold will take it out this year, but it remains to be seen if this is just a post rate-hike relief rally or the beginning of the next impulse leg higher.
Rate hikes will continue, and gold is going higher……that is about all we need to know….
🙂
Silver is still having a hard time………..JPM……is the problem……and that is about all we to know…….. 🙂
Yes, but nobody knows anything….. 😉
Ditto on that one……… 🙂
DJIA……..down 700 plus……gold looking good………….
BMW Mining Deals Shelved until EVs Can Be Mass-produced
Cecilia Jamasmie | about 7 hours ago
“Luxury vehicle maker BMW won’t be signing any supply contracts for lithium and cobalt at least until 2020, when mass-producing electric vehicles (EVs) proves to be profitable, chief executive Harald Krueger said.”
http://www.mining.com/bmw-mining-deals-shelved-evs-can-mass-produced/
Check out the 1 year Cobalt price as it steadily climbs…. (it may be getting a bit overdone here)
http://www.infomine.com/investment/metal-prices/cobalt/1-year/
Is the CEO of Twitter a twit?
Yes, he’s a twit.
Chris, Don’t worry about the Fed losing credibility.
You have to have credibility in the first place to be able to lose it.
https://www.wsj.com/articles/fed-officials-see-economy-slightly-overshooting-2-inflation-target-1521655479?tesla=y](https://www.wsj.com/articles/fed-officials-see-economy-slightly-overshooting-2-inflation-target-1521655479?tesla=y)
ditto
Oh, END THE FED……….enough is enough………..
The fed is a liar concerning INFLATION……….
US Stock Market – The Flight to Fantasy
March 20, 2018 | Author Pater Tenebrarum
“Divergences Continue to Send Warning Signals”
http://www.acting-man.com/?p=52454