Stocks and Precious Metals Charts - Roll Out the Barrel - Risk On, Bubble Up

"In the field of monetary and credit policy, precautionary action to prevent inflationary excesses is bound to have some onerous effects— if it did not it would be ineffective and futile.   Those who have the task of making such policy don't expect you to applaud.    The Federal Reserve, as one writer put it, after the recent increase in the discount rate, is in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up.   But unless the business community, leaders in all walks, exhibit moderation, prudence, and understanding, then we will fail and deserve to fail."

William McChesney Martin, 19 October 1955

As I am sure you know by now, the Fed has switched off its interest rates 'autopilot' and has shifted to 'patient' which is code for easy-peasy.

And so the Dollar dived, precious metals jumped, and stocks took off higher.

After the bell earnings news tended to dominate, as Facebook beat and all was well with the world.

Have a pleasant evening.

Stocks and Precious Metals Charts - Gold To Run the Gauntlet - FOMC, Payrolls, and Chinese New Year

“There is a mysterious cycle in human events.  To some generations much is given.  Of other generations much is expected.  This generation of Americans has a rendezvous with destiny.

In this world of ours in other lands, there are some people, who, in times past, have lived and fought for freedom, and seem to have grown too weary to carry on the fight.  They have sold their heritage of freedom for the illusion of a living.  They have yielded their democracy.  I believe in my heart that only our success can stir their ancient hope.  They begin to know that here in America we are waging a war against want and destitution and economic demoralization.

It is more than that; it is a war for the survival of democracy. We are fighting to save a great and precious form of government for ourselves and for the world.”

Franklin D. Roosevelt

Stocks were wobbly again today, ahead of the FOMC announcement on interest rates tomorrow.

Gold and silver continued to move higher.

There may be brighter times ahead for silver this year according to Bloomberg.

"Silver Shortage Promises to Boost Price in 2019 - Think of it as a potential silver lining for investors. A burgeoning shortage of the precious white metal is promising to boost its price as 2019 rolls out. Silver surged 9.1 percent in December, its biggest monthly gain in almost two years.  This year, with miners avoiding new projects amid global economic uncertainty, the price could spike as high as $17.50 an ounce from about $15.87 now, according to a Bloomberg survey of 11 traders and analysts."

Gold will be passing through a kind of gauntlet for the next week or so, as it attempts to take on the long term resistance at $1310.

First we will have the FOMC announcment tomorrow. The market will be looking hard for an indication of the Fed's intentions about the unwinding of their Balance Sheet.

On Friday there will be a Non-Farm Payrolls report, and a 'hot number' will raise expectations of further action to increase rates and unwind the balance sheet by the Fed.

And finally, the celebrations for Chinese New Year, also known as 'Spring Festival', will be commencing quite appropriately for the Year of the Pig.

This is a multi-day celebration. For example, the Shanghai stock exchange will be closed for the entire week from February 4 through February 8.

This typically is a weak period for the price of gold because of the huge presence of China in the demand for physical gold bullion.

So let's see how gold makes it through this most difficult period.

It is very difficult to forecast these things in a 'managed markets' economy.   But the minimum measuring objective I have on a breakout is $1490 for gold.

Have a pleasant evening.

Stocks and Precious Metals Charts - The Will To Power Ascendant - Economic Data Heavy Week

"Love takes up where knowledge leaves off.   The things that we love tell us what we are."

Thomas Aquinas


"It seems that under the overwhelming impact of rising power, humans are deprived of their inner independence and, more or less consciously, give up establishing an autonomous position toward the emerging circumstances. The fact that the foolish person is often stubborn must not blind us to the fact that he is not independent.

In conversation with him, one virtually feels that one is dealing not at all with him as a person, but with slogans, catchwords, and the like that have taken possession of him. He is under a spell, blinded, misused, and abused in his very being.

Having thus become a mindless tool, the foolish person will also be capable of any evil and at the same time incapable of seeing that it is evil. This is where the danger of diabolical misuse lurks, for it is this that can once and for all destroy human beings...

Only the humble believe in Him and rejoice that God is so free and so marvelous that He does wonders where people despair, that He takes what is little and lowly and makes it marvelous. And that is the wonder of all wonders, that God loves the lowly.

God is not ashamed of the lowliness of human beings. God marches right in. He chooses people as his instruments and performs his wonders where one would least expect them. God is near to lowliness; He loves the lost, the neglected, the unseemly, the excluded, the weak and broken...

In the Incarnation the whole human race recovers the dignity of the image of God. Thereafter, any attack even on the least of men is an attack on Christ, who took on the form of man, and in his own Person restored the image of God in all.

Through our relationship with the Incarnation, we recover our true humanity, and at the same time are delivered from that perverse individualism which is the consequence of sin, and recover our solidarity with all mankind."

Dietrich Bonhoeffer


"People who know nothing of God and whose lives are centered on themselves, imagine that they can only find themselves by asserting their own desires and ambitions and appetites in a struggle with the rest of the world. They try to become real by imposing themselves on other people, by appropriating for themselves some share of the limited supply of created goods and thus emphasizing the difference between themselves and the other men who have less than they, or nothing at all.."

Thomas Merton


He prompts you what to say, and then listens to you, and praises you, and encourages you. He bids you mount aloft. He shows you how to become as gods. Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his."

J.H.Newman, The Times of Antichrist

Now might be a good time to grab something substantial, preferably something good that is rooted in moral principles greater than ourselves, and hold on tight.   There may be no other way to resist the hysteria and the madness that permeates our public behaviour and the thoughts and words of so many.

What we cling to is what we love.   And it will tell you truly who you are, because that is who you have chosen to be.

Have a pleasant evening.

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.