As Goes January, So Goes the Year...

And so we say goodby to January 2016.

There is an old saying on Wall Street that as goes January, so goes the year.  This is also known in some circles as the 'January barometer.'

If this is the case it is going to be a good year for precious metals and a very wild ride for stocks.

It certainly did not 'work' last year, which also forecast a good year for the metals and a bum year for stocks.  The metals continued their bear market decline, but stocks were in fact down to flat.

Ah, if only life and forecasting was that simple so that a single metric would suffice.

Gold Daily and Silver Weekly Charts - BoJ Shocks, Silver Inventory Drops

"Love is patient, love is kind. It does not envy, it does not boast, it is not proud.

It does not dishonor others, it is not self-seeking, it is not easily angered, it keeps no record of wrongs. Love does not delight in evil but rejoices with the truth. It always protects, always trusts, always hopes, always perseveres."

Gold and silver were stronger than expected today as the US dollar was soaring on the shocker that the Bank of Japan is going negative on yen interest rates.

This set the markets back on their heels because just a week ago BoJ's Kuroda publicly dismissed the possibility.

This is a possible artifact of the currency war, in which certain countries will be seeking to devalue their currencies through various mechanisms in the hope of stimulating their economies, among other things.

On that announcement the US dollar index lit its afterburners and rallied harder.   I am wondering if these currency interventions, because this is exactly what the BoJ has done, will do anything to roil the massive currency carry trades and derivatives associated with these.

BoJ purportedly acted to stimulate Banks to make loans, which is a bunch of hoo-haw.  All the BoJ would require is for a few well placed people to pick up the phone and make some phone calls.

Gold is still outpacing silver, and this is due to the 'flight to safety' environment, even though we saw a sharp reversal in the Risk equilibrium in equities today that I suspect is more technical and short term.

I will probably have something more to say about January a littler later on.

There was some actual movement in the Comex licensed gold warehouses, bring the monthly delivery total to a staggering 5,800 ounces.  Wow.

Silver was most interesting with a 21.5% drop in registered bullion which is a big one day move.  I commented on this earlier today here.  There are plenty of screaming headlines one can write about this in the search for clicks, but for now it is just an interesting fact with a significance that is not known, excepting that it is not 'business as usual.'

One theory I have heard is that the recent 'glitch' with the new London silver price fix that was so oddly far below the market spooked some holders of the metal into fears of having their registered bullion delivered out from under them 'on the cheap.'

There are also the usual rumours involving China which is said to be scooping up the remnants of gold and silver where they may. This I cannot address, but the notion that the 80 cents below prevailing market 'price fix' in London tightened up some strong hands makes some sense.

Let's continue to keep an eye on the chart formations and try to listen to the markets.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - BoJ Goes More Negative Than Hillary's Campaign

Stocks were on a tear today as the first look at the GDP number for 4Q 2015 came in as lousy as expected.

If the past is any indication, the next two revisions will take it lower to the zero bound, perhaps even negative.

Digging beneath the numbers, it appears that rising healthcare costs were a major contributor to GDP. Since healthcare costs in the US are far above what is paid in the rest of the developed world, one might consider the growth of those costs as a distortion on the greater economy, almost in the manner of a tax.

And the BOJ shocked the markets by opting for negative interest rates, just one week after Kuroda san came out and said they were not going to do it.

One wonders what they have seen that so greatly changed their minds and so quickly.

Stocks may have a little more upside, and the targets on the charts are somewhat visible to the discerning eye. But we must be wary of a failed rally on puff and stuff and HFT buying in the short squeeze. Because the problem with this market in general is that its underpinnings are lacking in substance to say the least, and vulnerable to a decline.

Have a pleasant weekend.

And Now For a Hard Drop In Comex Deliverable Silver

The 'registered' for delivery silver bullion at the Comex licensed facilities dropped by 7,792,110 troy ounces yesterday.

This takes the total from 36,322,409 to 28,530,299.

This is a one day decline of 21.5%.

This also brings the total deliverable silver down to some unfamiliar lows not seen since 2011.  The level is not nearly as extreme as gold's, but it is getting there if this keeps up.  I include a chart of the registered silver at Comex for the last ten years below.

Silver in these warehouses has been seeing some large movements for some time now, a fact which I attributed to CNT using the Comex as a delivery mechanism for the silver which they use in their wholesale business.  But this kind of drop is not usual.

Comex Silver looks positively lively compared to Comex Gold, which is starting to resemble a Madame Tussaud's depiction of a commodity market, seeing very little activity, and almost frozen in time like some artifact from the past.

I bring these facts to your attention not out of some sense of alarm, and I do not wish to sensationalize them. Although some do. I think it is just something a bit unusual that bears watching, since it does not seem to be occurring in isolation and is an 'outlier' from the usual business. And I would not have brought it up except in passing if it had only related to CNT, which I would have then assumed was related to one of their large wholesale transactions.

Below is the statement of the warehouses from the day before, from last night's posting here.