US Dollar update and the rotation back into the growth
Marc Chandler, Managing Partner at Bannockburn Global ForEx joins us to recap the moves in the currency markets this week focused on the US Dollar and what’s going to dive moves from here. We balance out the future data coming out of the US and the perception of what the Fed will do in terms of policy changes (or lack of change). Finally we move to the shift in investor sentiment toward risk on and growth.
I bet SPY:GLD will react at “R2″…
https://stockcharts.com/h-sc/ui?s=SPY%3AGLD&p=D&yr=1&mn=1&dy=0&id=p93421535570&a=976577908
Matthew you are saying then…Spy will be stronger then gold a few weeks here?
No. More like a few days, at most. Those Pivots and their labeling change after market hours and even my question mark was somehow thrown well above where I had it.
R2 will remain at 2.57 for the next three trading days/the rest of the month (you can check during market hours to be sure I’m not off by a cent). Now that the market is closed, it shows R2 at 2.71 but that’s for July and could change slightly based on the action in the next three days. If it does “react” at current R2 as I suspected it would, watch the important “P” for first support.
SPY:GLD could easily gap up on Monday as GLD gaps down to retest last week’s low. I think those selling gold here are in for a surprise and those who sell a new low next week are in for a bigger surprise (referring to the June 18 low, of course).
ok Matthew…I will be looking hard into my approach for a turn then,,,no problem…..you are deep into relativity….Very interesting and thanx again
bye and bye Matthew……if the equity market sort of cracks for profit capturing you are saying this spy/gld ratio will contract…but you are open to the price of gold simply consolidating during this brief time and then moving faster than the spy during recovery?…something like that….This ratio for you proves the common sense thinking of gold as a store of value in crisis etc….any comment is welcome…thanx for all you do
Relative performance is useful but I also look at straight dollar pricing. If SPY:GLD goes materially higher from here, I think it will be due to one more quick but small drop in $GLD, not so much a rise in $SPY. Once SPY has topped in dollars and in gold, I suspect that $gold will move up faster than $SPY/stocks move down, at least initially.
Gold finished this week one cent below its 80 week MA. In my experience such precise marking of a technical spot often matters. In this case, I think it might mean that gold is in for another dip. My guess is no more than a percent or two to retest the March low. Peak to trough, that low took 31 weeks just like in 2008 which was the longest such drop of that decade long bull market. So a new low now would add roughly 50% more time to the current correction and that would be fine because it would destroy what’s left of sentiment and get a lot more dumb money positioning on the short side as well as rid the long side of remaining weak hands. Good stuff.
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=5&mn=0&dy=0&id=p29147405841&a=974275774
Zoomed-in, you can see that the week of the March low was also very close to the 80 week MA but the closing price was 49 cents above it (also a tiny amount relative to the price of gold).
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=1&mn=0&dy=0&id=p27128816829&a=974275774
Priced in real money, the Dow would still have to rise more than 15% to take out its 2018 high. This one of the countless examples of the Fed’s hocus pocus distorting reality.
https://stockcharts.com/h-sc/ui?s=%24INDU%3A%24GOLD&p=W&yr=6&mn=0&dy=0&id=p82990427313&a=920888204
i am studying this approach…it helps identify the max. overbought oversold moments relative to a liquidity competitor ..because money Will go somewhere….very nice
great comments above………
Wow, I really “misspoke” above at 6:23. The line in question should read: “My guess is no more than a percent or two to retest last week’s low.” — NOT the March low.
Larry, I really like the looks of this GDX vs SPY chart. It tested declining support in each of the last 5 sessions and hasn’t been so oversold since the summer of 2018.
https://stockcharts.com/h-sc/ui?s=GDX%3ASPY&p=D&yr=1&mn=2&dy=0&id=p90928648363&a=964878287
From a weekly perspective, GDX vs SPY became oversold in March (for the first time since 2018).
https://stockcharts.com/h-sc/ui?s=GDX%3ASPY&p=W&yr=3&mn=0&dy=0&id=p06008022793&a=980522016
To flip SPY:GLD over, here’s GLD vs SPY. A major low low for GLD and high for the stock market is in the works…
https://stockcharts.com/h-sc/ui?s=GLD%3ASPY&p=D&yr=1&mn=5&dy=0&id=p78223406275&a=980568702
$1776.. THE GOLDEN PEANUT………. moving sideways………… controlled…… LOL….. WHAT A JOKE…..
No new low for TLT:SPY and TLT remains the much better bet…
https://stockcharts.com/h-sc/ui?s=TLT%3ASPY&p=W&yr=3&mn=6&dy=0&id=p60174030651&a=976582407
Nasdaq vs gold is nearing a top that will likely deliver a sharp reversal. The question is how near the top is percentagewise.
https://stockcharts.com/h-sc/ui?s=%24COMPQ%3A%24GOLD&p=W&yr=5&mn=11&dy=0&id=p03282740166&a=942653924
The same goes for the S&P vs Gold. I have zero doubt that the rotation is underway.
https://stockcharts.com/h-sc/ui?s=%24SPX%3A%24GOLD&p=W&yr=5&mn=11&dy=0&id=p82724352083&a=942651397
Took a risk this afternoon and began shorting and S and P.
Doc, I also took a risk and bought more WRMCF today. Do you and Ex and Matthew own that one? HH and BM do.
Bonzo, I do not own that one.
Bonzo, I do not own White Rock Minerals either but am familiar with it, have followed some of their progress through the Crescat Capital interviews with Quinton discussing it and in conversations with the Hedgeless Horseman.
Bonzo, thanks for the tip—-technically it looks like a buy down here since it’s very close to support.
Bonzo, who is HH?
Come on Doc……. shows you have not been paying attention …… LOL…
I haven’t been paying attention either. The only HH I recall is Heavy Hitter and I’m sure that’s not who he means.
Go back to the charts… LOL……. 🙂
We will see what the answer is…. anyone know.. ?
GIVE Up…………… ok,,,,,,,,,,,,,
https://www.thehedgelesshorseman.com/
Hedgeless Horseman…… HH…………. ME THINK……….. 🙂
HEY bonzo……….IF, I am correct…. please acknowledge….. 🙂
I’m sure you got it, Jerry. I was trying to think of a person’s actual name. HH is Erik W. To me.
Only the Great Bonzo……. will actually know …what he was thinking…. 🙂
Yes, I’m sure Bonzo mean the Hedgeless Horseman (Erik W.) as he has been very constructive on what they are doing for some time, and has mentioned White Rock Minerals in a few of the segments we’ve done with him over the last year as a company he likes.
Doc, HH is Hedgeless Horseman, Erik wetterling.
Hubert Humphrey, Howard Hughes, Herbert Hoover, Horatio Hornblower, Hulk Hogan, Heinrich Himler, Helen Hunt, Harry Houdini, Howard Hesseman, Hedda Hopper, starting to draw a blank….
Go back to sleep David…. LOL…….. just joking…. It is Freaking Friday… and the cabal is in overdrive…. 🙂
The “Horseman” …that should have been my first guess.
David…….. those were some great guesses….. applauds in order…. CHEERS….
Hogan’s Heroes..ya.. I know.. lame!!!
Yes another good one….
Don’t forget Hermann Hesse. And Herbert Hoover did open the Dolly Varden mine over 100 years ago.
Please excuse the rant…. But some things NEVER change.
https://youtube.com/watch?v=koY6kXhQDQo&feature=share
You, All might want to watch …Part ~2
https://www.youtube.com/watch?v=cIL22kPUILU
Strong message follows…
There is a lot of chart reading and interpreting here but not often an experienced guy comes out and states what you just did. It is risky and a wake up call for others.
The NYA may be key here. Note the potential triple top (any chart).
It is also fully saturated : Metals/Markets: https://tinyurl.com/6vpkf67m
GDX target now: 28.06
How Basel III Will Impact Gold Markets
https://www.abcrefinery.com/resources/media-articles/how-basel-iii-will-impact-gold-markets/
IS THIS A PROBLEM?
The fundamental characteristics of a HQLA align well with gold, however gold is not yet considered a HQLA as there was insufficient data collected to demonstrate that gold responds well enough to real world shocks.
High Quality Liquid Asset (HQLA)
The key take-away of all the above is that the Basel III provisions for NSFR and HQLA represent a potential cost to doing business along most, if not all points along the supply chain.
I don’t care about Basel III myself but some here do. Gold will have no problem either way.
Matthew……… I agree with you…….. long term…. does not mean a thing…except,
PRICE IS GOING UP…. ME THINK……. 🙂
This Tiny Junior Explorer Just Found High Grade Gold…and Unlocked a Mystery
Matt Badiali for Streetwise Reports (6/22/21)
“On June 16, 2021, Heliostar Metals Ltd. (HSTR:TSX.V; RGCTF:OTC) announced that it hit 88.3 grams per tonne (g/t) gold over 3 meters and 19.3 g/t gold over 4.5 meters at the old Apollo Mine on its Unga Project in Alaska.”
“That’s an exceptional discovery for a tiny gold explorer like Heliostar…but in this case it means a whole lot more….”
Gold Summer Doldrums Return After Two-Year Hiatus
David Erfle – Friday June 25th, 2021
“All it took to run the stops below $1800 in gold was for the world’s largest central bank to go from “not even thinking about thinking about raising rates” to “thinking about thinking about raising rates” at the June FOMC meeting.”
“In fact, the biggest weekly gold move lower in 15 months took place despite the Fed not acting at all in response to the recent inflation surge showing the Consumer Price Index (CPI) nearly hitting 5%, along with alternative measures showing inflation running even higher.”
“After the dust settled from the sharp decline in gold, investors have been struggling to interpret signals from the Fed about how hot it is willing to let inflation run before the central bank begins unwinding pandemic-era monetary stimulus. With differing Fed officials jawboning between being hawkish, or dovish, regarding the future of monetary policy this week, investors have been sending safe-haven capital into the U.S. dollar, while “risk-on” continues in the marketplace.”
https://mailchi.mp/41490c81ceae/david-erfle-weekly-gold-miner-sector-op-ed-1599890?e=3ac1473fe4
Gold Investors Ignore Fed
Jun. 25, 2021 – Adam Hamilton
– “Gold investors have ignored their metal’s sharp plunge following last week’s hawkish FOMC surprise so far. It is silly to fear slightly higher rates way out in 2023, an eternity away.”
– “The holdings of the dominant American gold ETFs, the best high-resolution proxy for overall gold investment demand, have actually climbed slightly in the wake of those latest dots.”
– “The FOMC doing nothing last week remains bullish for gold. Both the Fed’s zero interest rates and $120b of monthly QE remain in place indefinitely, flooding the world with dollars.”
Forget about the Fed. Focus on Finding good investments.
My portfolio is crammed full of good investments and I’m almost out of dry powder so I’m now more curious as to what will happen in the markets, metals, and interest rates, and the Fed plays a role in all of that.
The collusion is overwhelming when you consider how many insiders it takes to make the fraud of the Fed work. Think of the money it takes for everyone taking a cut to feel it is worthwhile to destroy the country. Really sickening…most don’t even understand it.
Obama’s administration is still running the government. All that needs to be purged, once the unwoke wake up…
/NQ…any stiff sell off would bring the weekly now crossed MACD inline w the daily macd……but untill that we are riding w embedded positive daily technicals…and the street knows this…selling could be pretty powerful if/when the technicals confirm the distribution cycle…