Stocks and Precious Metals Charts - Dollar Dumps and Metals Soar - Non-Farm Payrolls Next Friday

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only."

Charles Dickens, A Tale of Two Cities


"The corporate Democrats who dominate the party’s power structure in Congress should fear losing their seats because they’re out of step with constituents.  And Democratic voters should understand that if they want to change the party, the only path to do so is to change the people who represent them.  Otherwise, the leverage of Wall Street and the military-industrial complex will continue to hold sway."

Norman Solomon, The Democrats' Fear


"In 1995 President Clinton signed a tax change law that effectively guaranteed that US wealth and income inequality would rise ad infinitum and that over time, the US stock market would effectively become the US economy.  Seemed like a good idea at the time.  This is one reason I can’t understand 'progressive' adulation of the Clintons. They did as much to screw American middle class as any Republican.  Control the language, you control the dialog, you control the people."

Luke Gromen

The biggest market-moving story of the day was the news broken by the Wall Street Journal that the Fed is considering the unwinding of their Balance Sheet much earlier than had been expected.

The markets had already been factoring in two or less interest rate hikes this year, down from the original three. The Fed's target is said now to be 3.00%.

But it was the liquidity being drained from the financial system by the Fed's Balance Sheet reductions that had traders on edge.

And on that news the US Dollar took a drop of a little over 80 cents, which is a fairly sizable move.

And gold and silver both rose sharply in reaction, with gold jumping almost $20 to close slightly higher than the magic $1300 level.

As you can see from the gold chart below, the breakout is not quite here yet. Gold needs to keep moving and stick a solid close over $1310.

Next week will be a key test as we will be getting quite a bit of economic news, including the January Non-Farm Payrolls Report. I have included the calendar below.

We will also be getting more earnings reports from US corporations.

Late in the day there was an announcement that a deal had been struck to 'temporarily' reopen the government for the next three weeks.

We will be watching the outcome of that, plus the budget debt ceiling discussions, and the impending visit by the China trade delegation.

Need little, want less, love more. For those who abide in love abide in God, and God in them.

Have a pleasant weekend.

New Silk Road Physical Gold Demand Since 2005

Gold is flowing from West to East.

Stocks and Precious Metals Charts - Building Pressures, Gathering Storms - Chips Falling

"The human mind, except when guided by extraordinary genius, cannot surmount the established conclusions amid which it has been reared.”

Winston S. Churchill, The Gathering Storm


“Before mass leaders seize the power to fit reality to their lies, their propaganda is marked by its extreme contempt for facts as such, for in their opinion fact depends entirely on the power of man who can fabricate it.”

Hannah Arendt, The Origins of Totalitarianism


“Privilege is not knowing that you're hurting others and not listening when they tell you. Facts are threatening to those invested in fraud.”

DaShanne Stokes

Stocks were wobbling around again today. Since they have already retraced 50% of their big decline as shown on the futures charts below, a consolidation and decision point is natural.

There is no clear chart formation to reliably forecast the dirction of the next move. Several exogenous factors weigh on this.

The first is of course the simmering China-US trade war. A breakdown in talks would most likely cause equities to break to the downside, especially if it involves the activation of more tariffs.

The global economy is struggling, and this impacts and includes the US. Anything like a fresh trade war, or an unmanaged 'dirty' Brexit, might schock traders negatively.

Secondly, the Fed is still a major factor, although the likelihood of two more rate increases this year to 3.00$ has been greatly discounted in the futures markets.

There will be an FOMC meeting next week, and the markets will be watching what the Fed does, and especially what they say about their outlook for the rest of the year. I think there is a good possibility of a 25 bp increase, with hints of a more data-oritened, vigilant outook for a second. Unless something unexpected happens I suspect that a third rate increase this year looks unlikely.

It should be easily understood that macro events like China trae and Brexit may impact the Fed's future decisions. Their bias to raising further from the zero bound is there, but they need 'cover' from the economic data to continue to engage it.

Perhaps more imporantly, although less headline inspiring, will be the continuing unwinding of their balance sheet.

Gold continues to mark its place, tied up in the whole 'wating' mode in the markets. At this point silver is following, yet to be unleashed.

After the bell Intel beat earnings estimates but posted a clear miss on revenues. Since earnings are much easier to gimmick up in the short run vis accounting strategies, the big revenue miss had quite the negative impact on the stock which had been rallying into the close on expecations of a bigger beat.

Both the Democratic and Trumpolini proposals to end the government budgetary shutdown were defeated in the Senate. One has to wonder how ugly the next 'debt ceiling' discussions will be.

Need little, want less, love more. For those who abide in love abide in God, and God in them.

Have a pleasant evening.

Stocks and Precious Metals Charts - Wobbly

"Some wonder if it did fail, or did QE do exactly what its proponents wanted it to?  That is drive massive wealth to very small connected circle.  Some wonder if that wasn't the real goal all along and the crisis was a good excuse to implement their policies."

Harald Malmgren


"The public needs no further proof of the Fed’s inability to supervise the global banks than the fact that, at a time when it had dozens of its own inspectors sitting inside the banks, the banks were able to create toxic waste dumps of subprime debt and derivatives that blew up the U.S. financial system, the housing market, and the U.S. economy in 2008 while also taking down 100-year old Wall Street institutions.  If that’s not incompetence, we don’t know what is."

Pam Martens, Wall Street On Parade


"The Lord is my shepherd; I shall not want."

Psalm 23:1

Stocks wanted to go down today, and sank quite a bit after the initial open.

However, once again stocks were able to shake off their lows into the afternoon trade and finish with modest gains into the close.

Gold finiashed off a bit even as the dollar drifted slightly lower.

The fear and hate mongering business seems to be on the increase.

Lord, make me an instrument of your peace.

Have a pleasant evening.