People getting just a little too cozy may want to peek in on the markets every now and then because they could turn into complete chaos…
Editor’s Note: Merry Christmas to all!
There will be no Midweek Update on Wednesday.
I want to share with everybody one of my favorite prepper/survivalist movies of all times – Panic in the Year Zero. If you have some time, and if you want to watch a sweet oldie but goodie, check it out (full movie embedded below):
It’s really a coin toss.
The markets close early today, and the markets are closed tomorrow in observance of Christmas.
That said, not all is calm and tranquil.
Check out Stevie playing Mr. Fixit:
Today I convened individual calls with the CEOs of the nation’s six largest banks. See attached statement. pic.twitter.com/YzuSamMyeT
— Steven Mnuchin (@stevenmnuchin1) December 23, 2018
Things must be pretty bad for the Treasury Secretary to be “working” on a Sunday and making it known to the public.
Side Note: Does anybody else find it odd that the Treasury is calling up private banks and checking on “liquidity”, while the Fed Issues our (debt-based fiat) currency and goes on CNBC to talk the markets?
What’s to come to the markets this week?
Anything from relatively calm markets, with some light gold & silver smashing, to totally chaotic markets, with the stock market crashing the holiday party!
Anybody who comes into Christmas cash may find it advantageous to stack some silver:
When it currently takes 85 ounces of silver to buy just one single ounce of gold, the gold to silver ratio is telling us that silver is pretty darn cheap right now.
Let’s see if we can remain above the 50-day moving average in silver:
That would help the bullish case for silver, and after a year like this, I’ll take it.
I’d rather have confirmation of a bull trend than be falling into the end of the year.
In similar fashion, let’s see if gold can hold above its 200-day moving average:
If we do get some light smashing, that will be hard to achieve.
Of course, we could still get that upside surprise I have been looking for in both gold & silver, but it is hard to see the cartel not smashing gold & silver at a time when the cartel could exude minimal selling pressure for maximum price-smashing effect.
I’d be content with palladium continuing to consolidate here:
With nearly every asset down this year, palladium is actually up nearly 10% year-to-date.
Thankfully, unlike I did see with crude oil, I see neither a bear flag nor a bear wedge on platinum’s chart:
After double-bottoming this year, let’s see if we can’t begin climbing that wall of worry.
Crude oil is down over 40% from the peak:
This is not “year-to-date” but since the peak some two-and-a-half months ago. Said differently, the crash in crude oil has been hard and fast.
A taste of things to come?
Let’s see if copper can get back on its feet this week:
The commodities sector sure would like it if copper could stay above its 50-day moving average.
The Russell 2000, the Heartbeat of America Index, is down 26% since its August 31st peak:
A decline of 20% is the mainstream definition of a bear market. We’re there. One by one the indices are coming down.
Of course, if we get market chaos this week, look for the VIX to spike:
To me the VIX looks like it wants to spike higher even without Stevie’s non market-comforting liquidity concerns.
I have said all along that this economy can’t handle higher interest rates:
If the stock market crashes, we could see a 26-handle on the 10-Year Note before the end of the year.
And despite all of this, the dollar is still perched near 97:
If we get selling pressure in the stock market, however, I don’t think it is going to cause a flight into the dollar, but rather, a flight out of the stock market, followed by a flight out of the dollar.
In other words, international investors begin pulling out of the US.
Let me finish this Outlook with a little holiday anecdote.
This weekend, my wife and I were casually wondering (since we don’t watch TV), if there were commercials on TV to the effect of “Hurry in, doorbusters start at 6:00 p.m. on the 25th”.
Because, you know, God forbid anybody calls it Christmas anymore. Even though they took Jesus out of the holiday, everybody still needs to shop, shop, shop!
As it turns out, we didn’t have to wait long to find our answer.
In the Sunday paper there was a Kohl’s advertisement. While it said nothing about being open on the 25th, the ad did say something to the effect of “hurry in on December 26th for our stock-up sale”.
I may be missing the exact words in the ad, but it was in fact advertising a “stock-up” sale event on the 26th.
Let’s put it all together.
Our Treasury Secretary wants to give the illusion that he cares about America, so at best he spends a few minutes on the phone (for all we know, he could be a lying about what he did), and he gets some low level aides to fire out a Tweet.
If you get your news from the alternative media, you already know that not only is all not well, but you know that economic collapse is right on our doorsteps.
We have a holiday that is completely removed from the holiday, with retailers pleading in sheer desperation for customers to keep on spending.
Can the economy and the markets get through the next two weeks unscathed?
Or do we finally get the major events we’ve been looking for?
Might want to get some corn for popping.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.