Monday Outlook: The cartel has slashed gold & silver ever since September 8th, but by this Friday, it may be the Cartel who’s getting slashed…
The week is starting out a-typical and ending that way too. Today is Columbus Day, and the banks are closed, but the markets are open. On the fundamental front, we have a slew of Fed speakers starting tomorrow, and of course, by Friday the 13th, they are going to need all the jawboning they can get to keep their stock market propped, the dollar under hypnosis, and gold & silver out of the public conscious:
From Wednesday on there are market moving data releases for the HFTs to trade off of, including:
- Treasury Budget
- Business Inventories
- Consumer Sentiment
This is why it matters:
The data releases “hit the tape”. This means they are released, and everyone’s favorite tape is the market data feeding news platform Bloomberg Terminal, which no longer publishes yearly costs but, but it is safe to assume it costs around $25,000 for the program, which hedge funds and major trading firms (i.e. the revolving door between Washington and Wall Street) use in conjunction with their algorithms to trade positions back and forth all the while racking up the profits and creating nothing other than a bunch of synthetic paper currency and nothing of substance.
The Fed speeches are significant too. Computers calculate numbers, and the “black boxes” that are built to parse the data in the releases is not something a human mind can do in nano-seconds, let alone does a human have fiber-optic and laser connections to the major trading clearinghouses like BATS to front run, skim, spoof, snipe and pounce any other computer that is nano-seconds behind. So humans need fundamental news.
The fundamental news comes in the form of jawboning the markets. That is to say, all of those Fed Heads declaring that everything is awesome reassure any of the actual people left in the stock markets that the Fed has their backs. Said differently, this week is the typical data release feeding the computer algorithm trading, in conjuction with the various staggered Fed speeches re-assuring the humans that U.S. stocks are the place to be.
At one point, however, it won’t be, and with the exception of a few people on the inside who stand to profit immensely from knowledge we are not privy too, the Fed will not longer support the system in order to allow the bubble to pop. Since they know when that point is, they will bank on the whole way down too as investors loose their hard earned money that they trusted in paper assets.
But they will most likely have trouble with gold and silver this week.
Gold & silver have been under constant price smashing since September 8th. Can the smashings continue, such as the way we saw the precious metals fall until the end of the year in 2016? They could, but the pressure on price has come much earlier this year than last. The silver price was still at $19 just a year ago. Are they really going to be able to push silver down $2 from here to end the year? Not likely. Yes there is silver (and gold) on the markets at the retail level, but there’s no way there would be much if any left after the rush into the metals if they push the price down that far.
Here’s a chart showing just how they have barely been able to keep the 50-day from crossing the 200-day:
When that blue line crosses above the red-dotted line, that would represent a huge change in sentiment on the bullish side. Could we get that cross before Friday the 13th? if silver has some surge in price this week it’s possible, and if silver was $2 higher this time last year, it could indeed have that surge in it.
From the near-term, silver looks to be brushing off the ADP and NFP smashings from last week:
Remember, silver closed up last week. We have been wanting silver to start outperforming gold, and last week it did just that.
Gold looks to be recovered from NFP too:
We have been looking for gold to under-perform silver, and sure enough, we got just that last week with a slight loss in price of the yellow metal.
When we look at other precious metals, the bullish indications continue:
Whereas gold has spend the last 5 days carving out a short-term bottom, platinum has spent even more days than gold in carving out a bottom. Things are looking good to resume the uptrend from here.
Copper, the base metal, is also showing it looks to be turning up in price again:
Notice how copper was riding the 50-day moving average for several days. Near the end of last week, copper surged off the average, and now, the moving averages convergence-divergence (MACD) is turning bullish again. Technical trades look for these type of signals. In the case for copper, the MACD is signaling that price is going higher, so anybody holding coppers futures contracts would be reluctant to sell right now. The point is that copper, and platinum as show above, both support higher gold and silver prices.
Crude just put in a technical double-tap off of the 50-day:
If three times is a charm, and if crude taps the moving average but does not go through it, surely the case could be made for higher crude prices. We just had another hurricane make landfall over the weekend (Hurricane Nate), and while the MSM is nary a story this morning, destruction from Mother Nature, no matter how “mild”, is never good for economic “growth” because there is only the need to replace what was once there. If there is rebuilding, petroleum supply and logistics problems, and other economic hindrances from the already forgotten hurricane, oil could spike without warning.
The dollar is starting to show that it is being propped artificially for some reason:
Are we really to assume the dollar is just in a pattern of two tiny drops followed by a prop? Well, it’s certainly possible, but the greenback is certainly not in a “buy the dips” chart pattern, so there must be some other reason to which we will surely not be told. Once the Fed shows it’s tightening bluff, however, the dollar could fall hard and fast. One the stock market starts correcting, the dollar could fall hard and fast, and once the housing market shows it’s bubble is getting popped again, the dollar could fall hard and fast. Are we to assume that people are going to flood into the dollar yet again, when, all things considered, is still higher than it was over three years ago? With every other “asset” class having risen higher all year, gold and silver are the only assets not in a bubble, and they stand at the ready to soak up all the dollar that will desperately be searching for a home.
On Friday we said the 10-year yield would most likely touch 2.4%:
It did just that. We’ll see where it goes from here. Your’s truly doesn’t think rates can just slowly and methodically creep up. They will slowly and methodically creep down, and when the time comes, they will spike up abruptly, a la Paul Volcker.
For now, fear is still very suppressed:
Precious metals aren’t the only thing kept artificially low. That is all part of the bubble dynamics. How else are they going to keep the stock market rising after eight years without crushing the VIX? Just like precious metals, it will go on until it won’t.
For anybody who wan’t aware, this is still the same “big, fat, ugly bubble” Candidate Trump was able to correctly call-out on national TV. Somehow President Trump thinks that this time it’s different.
To paraphrase a wise man on the fallacy of this thinking:
Every grill-stravaganza may be different, but they always end the same…