SD Midweek Update: Grab your popcorn. There’s going to be fireworks in the markets…
Today is a big day in the markets.
Especially considering we have the Greatest Economy in American History:
The Greatest Economy in American History!
— Donald J. Trump (@realDonaldTrump) October 30, 2019
I hate to be the bearer of bad news, but when you’re the greatest, there is only one way you can go.
If that’s even what we have, and I don’t think so.
Regardless, there is a bunch of data pre-opening bell, such as Mortgage Applications, ADP Employment Report and 3rd Quarter GDP.
The main event, however, begins at 2:00 p.m. EST with the release of the October FOMC Statement.
This is where the Fed informs the public of the Federal Open Market Committee’s changes (or not) to the Fed Funds Rate.
As of this morning, CME Group shows the probability of a rate cut is over 96%:
It’s pretty safe to say the Fed will cut rates today.
Interestingly, all of the Fed apologists, enablers, defenders and propagandists are expecting rate cuts on a monthly basis, whereas when the Fed was engaged in its latest whopper of a rate hiking cycle, the expectation was no more than every other month.
In reality, the Fed took it even slower than that:
Even if President Trump says the Fed did way too much and way too fast.
Speaking of President Trump:
Consumer Confidence number very good. Housing sales in September up nicely. Economy Rocks!
— Donald J. Trump (@realDonaldTrump) October 29, 2019
He means, like this:
There is no special skill in connecting the dots to get an understanding of what is really going on.
All that is required is admitting to ourselves that what we think is real, may not be real at all, and then having an open mind to look at reality and change our attitudes and perceptions towards it, in conjunction with an active response to it.
Or something like that.
If that sounded cheesy, I do apologize.
For everybody knows ‘Ol Half Dollar ain’t no dang philosopher!
But I digress.
At 2:30 p.m. EST the fireworks really kick-off with the Jerome Powell press conference.
Recall that from last months FOMC, Powell basically dismissed the then brand-spankin’ new Repo Market injections.
Since then, the Fed has declared it will buy T-Bills through at least June of 2020.
In other words, even though the press conference is highly scripted, with nary a question from left field, Powell must perform at the top of his game with the stakes so high.
I would not be surprised if in spewing all of his nonsense, Powell pulls a Janet Yellen and kind-of throws up a little-bit in his mouth.
But I digress again.
Yield on the 10-Year Note, amazingly, and considering the floating, targeted nature of the Fed Funds Rate, is at this very moment in time, not really inverted nor dis-inverted but basically flat:
For now, I see noise, because we know the direction in which rates have to go to keep the system alive as it is today.
On Monday I suspected the dead cat bounce in the dollar was over:
The dollar index’s daily chart is looking all sorts of bearish right now.
Check at the VIX in a super-tight holding pattern:
I think we could start spiking as early as this week, and possibly even today.
The Heartbeat of America Index wants to join the party:
Traders and investors must be all giddy looking for conformation or non-confirmation of the all-time highs being hit in the other major US indexes.
Copper is starting to show the Fed’s pesky, persistently low inflation has pretty much run its course:
If the Fed comes out super-dovish on the basis of inflation, copper could take a slight hit from the jawboning, but as I’ve been saying for weeks, I think copper has bottomed.
Crude Oil, on the other hand, is right smack-dab in the middle of its allowable range:
With the dollar weakening and not many people discussing it, or even noticing, I would not be surprised if crude oil made a quick run to break-out above $60.
Palladium has nearly breached $1800 to the upside:
Palladium is proof that market manipulation eventually fail because we see the failure playing out in real time.
In other words, I can’t count how many days I see gold, silver and platinum smacked down in price, while palladium continues to grind higher.
Speaking of platinum, We’ve now had an entire week of suspense:
Last week, as platinum was surging, I asked if platinum was signaling the bottom for gold & silver, and so far, this seems to be the case.
Of course, trying to call the short-term bottom in gold is turning into an absolute nail-biter:
We only need about a $20 drop in price to begin to turn bearish in the short-term.
Silver is holding up much better than gold:
Silver’s daily chart is still looking bullish in the short-term with what could be argued as that all-important higher-high, even if not was not put-in on a closing basis.
The gold-to-silver ratio is clearly rolling-over:
The ratio is falling, yet the heavy hand since Monday has given silver stackers a flash sale.
The bottom line as we find ourselves here this beautiful Wednesday in late October?
We should see some volatility in gold & silver in the morning and afternoon.
Volatility doesn’t end today as we get the BLS Jobs Report friday.
Gold & silver have been under intense cartel pressure.
I still think gold & silver turn around this week.
The fundamentals are just too strong.
Even with lukewarm charts.
So weakness today?
Like free candy.
– 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.