Stocks and Precious Metals Charts - The Game's Afoot - Gold Breaks 1350 - China Trade Looms

The Fed did as expected today.

While they did not cut interest rates, they did make the appropriately dovish sounding noises.

And dot plots, yada yada.

So gold and silver moved higher, stocks not so much, and the dollar dropped.

I had my eye on stocks in the afternoon since gold had obviously decided that 1350 was going down. 1350 is now support. Gold must hold 1340 to continue making the cup and handle active.

Target for the cup and handle is $1530.  The short term objective is $1370 as has been marked on the chart for some time.

There is a stock market option expiration on Friday.

Stocks are going to be watching the macro global economy, specifically through the lens of the US-China trade situation.

Let's see what the stock market does tomorrow after a night to think about things.  I did not make a move in stocks today.  The metals are a nice long to keep riding for now as long as they can make it through any backfilling and retests.

On the situation chart below scenarios 1 & 2 are now the most probable.  Can you tell which way I was leaning?   We still have to see what happens with China next weekend in Osaka.

The metals went out on the highs of the day, so we know pretty much what the market thought about it.

The usual suspects may attempt to try capping it again at some new level, perhaps a bit higher or lower from here.  Next resistance is at 1370 and then around 1400-1410.  I put my thoughts on the charts as always.

Grab some popcorn. This will be interesting to watch.

And throughout all this bear in mind what is most important, the three great gifts that give us life: repentance, forgiveness, and thankfulness.

Have a pleasant evening.

Stocks and Precious Metals Charts - Risk Off - Gold Breaks Out to the Upside from the Wedge

"The received wisdom is mistaken on how recessions are made. They are not simply caused by shocks.  They are caused by a window of vulnerability in the economic cycle where the cyclical drivers of the economy have weakened to the point where it’s susceptible to a negative shock.  Within that window of vulnerability, virtually any reasonable shock becomes a recessionary shock. That’s how you get a recession."

Lakshman Achuthan, Economic Cycle Research Institute

In a similar manner one also gets a stock market crash.  Or the collapse of a long running gold pool.  What he calls a negative shock I call a 'trigger event.'

The more vulnerable and unstable a market structure may become, the less of a trigger event is required to initiate a sharp shift in valuations.

Today was definitely a 'risk off' day in the US markets.

Gold broke out and up out of the descending wedge, and with a relatively large about of energy.

As you know I had expected this to happen, but not until after the Non-Farm Payrolls report.

In contrast to May, June is an 'active' month for the gold trade, and there has been a remarkable withdrawal of gold marked as available for delivery at the NY Comex recently.

There are rumors that a bank was caught short with its pants down in gold, and it is now buying its way out, as sufficient bullion is not available in sufficient quantity, so that money must be thrown at the problem. Whoever they are, they must not be a member of the bullion bank club.

Well, in any event, it is difficult to contain a commodity market when it has been coiling with so much energy.   And so much of it has been flowing to the Asian markets, not to return at anything near to these prices.

Silver followed gold up towards its fifteen handle, settling just below that.

This breakout may not be a clear runner, but may have to back and fill a bit. Let's watch its progress, and see if the big cup and handle bottom can be activated.

Stocks slumped, and badly at times during the day, led by big cap tech.

The Trump administration is leaning on Silicon Valley. There is no love lost between Trump and the tech giants, and this makes for strange bedfellows with the progressive Democrats who also consider the antitrust aspects of companies like Facebook, Google, and Apple et al.

Let's see how the rest of this week goes. The stock decline was 'orderly' and there was a bit of a cynical bounce into the close.

Yet is this is truly a risk awareness situation, one wonders if it can be stabilized and pushed to the upside for long.

Or if the quote at the top of this posting described it, stocks will remain vulnerable, and it will take only some trigger event, some tweet, to set them rolling downhill again.

Have a pleasant evening.

Stocks and Precious Metals Charts - And It Is - Non-Farm Payrolls Next Week

"Shanghai Gold will change the current gold market with its 'consumed in the East but priced in the West' arrangement.  When China has the right to speak in the international gold market, the true price of gold will be revealed."

Xu Luode, Chairman, Shanghai Gold Exchange, 15 May 2014


“Imaginary evil is romantic and varied; real evil is gloomy, monotonous, barren, boring. Imaginary good is boring; real good is always new, marvelous, intoxicating. Everything beautiful has a mark of eternity.”

Simone Weil


"Nature is never spent;
There lives the dearest freshness deep down things;
And though the last lights off the black West went
Oh, morning, at the brown brink eastward, springs —
Because the Holy Ghost over the bent
World broods with warm breast and with ah! bright wings."

Gerard Manley Hopkins, God's Grandeur

Stocks dropped significantly after Trump initiated a 'shock tariff' on all Mexican goods effective June 10.

The Dollar declined.

Gold rallied significantly in a flight to safety. Silver tagged along, weighed down a bit by its industrial component.

On the chart gold has broken up and out from a large descending triangle.  Let's see if it can stick this breakout and expand it through the Non-Farm Payrolls report next week.

If so, this may activate the much larger cup and handle pattern that has been lingering on the chart for some time.

The US Treasury yield curve is now more inverted than at any time since 2007 and the inception of the last financial crisis.

Treasuries are apparently pricing in two rate cuts for this year.

At the same time junk bonds are signficantly diverged from this outlook on risk.

Something is going to break, and badly.

There will be a Non-Farm Payrolls report next Friday.

There is an economy of the lord of this world, that rewards the attentions of its adherents, temporarily if not fleetingly.   And there is the economy of God, that embraces all of us in the next, forever.

For some, that the economy of this passing world deems foolish, it is simply a matter of investment assumptions and horizons.   Their hearts are invested in what is to come— and what will endure.

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

Have a pleasant weekend.

Stocks and Precious Metals Charts Hang On To Your Hats - Gold Working 'W' Bottom on Big Cup Handle

“When an honest man speaks, he says only what he believes to be true; and for the liar, it is correspondingly indispensable that he considers his statements to be false. For the bullshitter, however, all these bets are off: he is neither on the side of the true nor on the side of the false.

His eye is not on the facts at all, as the eyes of the honest man and of the liar are, except insofar as they may be pertinent to his interest in getting away with what he says. He does not care whether the things he says describe reality correctly.  He just picks them out, or makes them up, to suit his purpose.”

Harry G. Frankfurt, On Bullshit

Yesterday I said, "We may get a tweet fueled rebound of sorts. But it is unlikely to last."

We may get a little more upside, if Trump-o-weenie puts out more fantasy tweets about a trade deal, and Mnuchin mobilizes the Exchange Stabilization Fund.

But, the risks remain elevated, highly elevated.

Gold hung in there today, despite a little profit-taking and a stronger dollar.  We may have put in a 'W' double bottom.   Let's see if that formation can activate on the chart.

Bloomberg *finally* fixed their intraday DX chart. Thank you guys. They have an excellent organization when it comes to collecting, organizing and presenting data.

As for the big picture, the 'recovery' may be faltering, the world may be teetering on the verge of economic stagnation, the US may be aggressively pursuing regime change in multiple countries, but at least the deficit is out of control, thanks in large part to the tax cuts for corporations and the ultra-wealthy.

As for the rest of us and these markets, hang on to your hats. We may be in for a rough ride.

Have a pleasant evening.

Stocks and Precious Metals Charts - Gold Chart Potential Cup and Handle

“Everything passes, only truth remains.”

Fyodor Dostoyevsky, The Brothers Karamazov