SD Outlook: This is a critical week for the stock market, gold and silver. We also get important data to start and to end the week. Here’s more…
On Friday I argued my theory of why the Globalists/Deep State would want to crash the stock market this week. It may be important to read that post for those who understand that, at times, groups and people get together and conspire to do things in attempts to shape desired outcomes.
What is the gist of my theory?
The Globalists/Deep State plan to crash the stock market and place the blame on President Trump in a last ditch effort to get desired Deep Staters and especially the democrats back in control of congress.
I would also not be surprised if there were some sort of damaging false flags or false flag hoaxes carried out in some capacity that would also allow the Globalists/Deep State to place the blame on President Trump.
Finally, to expand on my theory slightly: We know that many elections are rigged or outright stolen. That said, perhaps the Globalists/Deep State already have the capacity to steal the elections they need to steal, but if they don’t have the narrative to support the outcomes, then suspicions could be raised about the integrity of the elections.
If I jumbled and mumbled that expansion of my theory, let me state it differently: If, going into the mid-term elections next Tuesday, the collective social mood is that President Trump is not doing a good job, those who stole the election will be able to say something like this:
“See, the President is failing at his job, and these election results, with the democrats now in control of both the House and the Senate, show the American people are growing dis-satisfied and disenfranchised with President Trump and his leadership.”
Bottom Line: I don’t think this week is just going to be some “everything is awesome” narrative on the economy or in the markets as the MSM has been pushing for years.
We start the week with the Fed’s favorite inflation gauge, PCE:
Recall that on numerous occasions, as part of the narrative, President Trump has been boasting about wage growth. We will get a taste of wages today (actually, by the time this post is live, the number will have already hit the tape). Recall that in President Trump’s dispute with the Fed, the President reiterated on multiple occasions that inflation is non-existent. So it will be interesting to see today’s numbers.
To end the week, we get the all-important October Employment Situation Report:
The BLS Jobs Report on Friday will basically be the last hard piece of data going into the mid-term elections. Yes, there will be other data coming out on Monday and Tuesday of next week, but we know the President is very proud of his JobsJobsJobs!
So I’m looking for an action packed week with the Globalists/Deep State using every dirty trick in their book.
I talk about moving averages a lot. Many traders and investors think they are important, and for good reason.
That said, this doesn’t look good at all for the stock market bulls:
The 50-day moving average of the Small Caps is quickly descending upon the 200-day, and readers here know that when the blue line crosses the red-dotted line to the downside, that’s known as a “death cross”, and it is very bearish. Although that chart is very bearish looking even without putting any technical indicators on it. If we take the peak to trough, the Russell 2000 has been down over 16% in less than two months.
If I’m right about the conspiracy, we would clearly be in a bear market this week.
Of course, that means we would get a spike in the VIX:
It is interesting too, because with the carnage in the stock market of the last few weeks, we still didn’t get a spike in the VIX that would be comparable to the “Vol-pocalypse” from back in the first week of February.
If I’m right about the stock market, I think we could see additional strength in the bond market:
Strength in the bond market means yields come down as people rush in to buy bonds. Yield moves the opposite of the price of the bond, so if you have more buyers than sellers, the bond price goes up, and the yield on the bond goes down.
The dollar is a bit of a wildcard only because of the constant flip-flopping of the President. Is he or isn’t he a strong dollar or weak dollar guy? I don’t think it is the President playing 4-D chess as many others do. I think it is simple pandering to the dynamics of the day.
That said, some of the last things the President said about the dollar was in boasting that the dollar is strong, and because of that, I think we could see dollar weakness this week.
Furthermore, it looks like a double-top has formed on this bear rally:
If we do make a new high, however, I would also look for President Trump to make some sort of comment on the dollar one way or another, so while it is possible to go higher from here, I still think the Globalists/Deep State want a lower dollar going into the mid-term elections.
Copper is riding the support of its 50-day:
Copper has worked so hard to get that major moving average stabilized, and I really don’t think this fade is in preparation for the next leg down.
Crude Oil is perched right at its 200-day moving average:
I have been using the price of crude oil as a proxy for the metals, and especially for silver. At north of $67 a barrel, I still think the floor crude oil has placed under the price of silver is a solid foundation. If we get into the low-$60s, however, and I would start to get concerned, and if crude oil drops into the mid-$50s, I would expect an additional drop in the price of silver. If that is the case, those looking to add to their stack will want to keep an eye on premiums like a hawk keeps an eye on a squirrel.
For now, however, I maintain the the bottom is in for silver, with the price of crude oil being a significant factor in my confidence with that call.
POP QUIZ: What is platinum trying to do on this chart?
To me it looks like platinum is trying to put in a third higher-high. If that happens, we will have a stout series of three higher-lows and three higher-highs on platinum’s daily chart, and that would be nice and bullish.
Palladium has pulled back, but it is up overnight and in the pre-market hours:
Just check out that “golden cross” on palladium’s chart. Wow, that’s bullish!
The gold to silver ratio is still providing stackers a “once in a cycle” opportunity:
At over 84 ounces of silver needed to buy just one single ounce of gold, making a play on the ratio means that when the cycle peaks (as in when the gold to silver ratio bottoms), converting ounces of silver into gold means free weight in gold added to that stack.
Which is why every single humble purchase I’ve made this year has been silver.
I plan to take advantage of that arbitrage. All that is required is that one is willing and able to purchase physical silver, and then hold on to it until the cycle plays out.
It sounds easy in theory, but in practice, only a few people will be able to succeed.
I want everybody reading this to succeed.
We see the pressure overnight and into the morning hours in both gold & silver:
Of course, if I’m right on my theory about the markets, gold and silver would be rallying this week.
Is this the week we finally get over $1250 in gold and $15 in silver?
Isn’t it amazing that here we are in late 2018 talking about $15 silver?
Regardless, I think silver’s chart is painted like the white metal could indeed run this week:
Could silver even make a run at the 200-day moving average?
That might be a little too much to ask, but if there is to be an explosive move, I think that explosiveness will be to the upside, and with a rise in gold & silver being a vote of “no confidence” in the President as I have argued many times, including last Friday, It is certainly possible we finally get that upside surprise I have been calling for but never seem to be right about.
Yes, I have been wrong about the upside surprise. I still do think it is coming, and if I’m right about this week, we would get it this week.
I’m not that far off-base, however.
Let’s look at gold for as example.
All gold needs to do is rise approximately 3.49% (not even 3.5%) on the week to be at its 200-day moving average at $1276.20:
If the metals do run, and if they run up to their 200-day moving averages, that would be enough to nail my “upside surprise” call.
But that’s not the point.
The point is a move to those averages would be bullish.
– 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.