SD Midweek: “Chaos”, “confusion” and “crashes” are the words of the moment for the markets. Let’s use this pause to take it all in and figure it all out…
Sometimes markets catch a lucky break.
Today is one of those such days. This “National Day of Mourning” is basically the equivalent to my kids getting a snow day off of school. That is to say, it is unexpected, but welcomed.
Especially for the markets.
It might not be talked about in the mainstream media, or even in many of the so called “alternative” websites, but these markets are really in chaos right now. I think things will get even more chaotic as the days, weeks, and months drag on.
So let’s reflect a little on where the markets happen to find themselves right now.
The death cross is now visible on the Nasdaq:
I don’t think the importance of the death cross should be overlooked. I mean, I was warning for weeks way back early in the year about the impending death cross on gold’s dally chart, and we all know the pain and agony that has followed since.
Additionally, just look at that massive drop yesterday in the Nasdaq. In fact, all of the stock market indices had similar nose dives.
So much for the surge late last week and on Monday. On Monday, I said the window of opportunity was open in the stock market after the “trade deal truce” euphoria, but after a day like yesterday, I’m not so sure anymore that the stock market has one final push left in it.
What we won’t see, today, is Jerome Powell.
Fed Head Powell is surely glad to catch a break today. His testimony before congress has been canceled – not that anybody would ask the difficult questions anyway. The congress only lobs Fed Heads slow-pitch softballs, but the thing is, batting average is never perfect, and with the yield curve once again front and center with the shorter time duration spreads already inverted (the 2-5 spread IIRC), and with the stock market drop, seemingly out of the blue yesterday, and with the trade war truce, there would have been plenty of opportunities for Powell to stick his foot in his mouth leading to market convulsions.
Speaking of yields, check out the yield on the 10-Year Note:
My goodness, after reaching nearly 3.25 percent at its peak, yesterday yields briefly even dropped below 2.9%. A move like that in that short of time is not insignificant, and its like I said, these markets are much more chaotic right now than the mainstream is leading everybody to believe.
The VIX surged yesterday:
And the VIX is something that can easily be manipulated, so a surge like we saw yesterday is one of those “almost got the best of the cartel” days.
Think of it like this: It is common knowledge that Hillary attempted to steal the election from Donald Trump in 2016 using various forms of outright voter fraud – from the busing of illegals to multiple polling locations, to double and triple counting votes, to the dead voting, to the maliciously programmed electric voting machines, to outright fraud in recording the numbers with ballot stuffing, etc. My point is that while elections are super easy to manipulate in this country, as are the markets for now, the Deep State could not overcome the sheer volume of votes coming in for Trump. That is to say – the manipulation by the Deep State wasn’t enough.
Why am I bringing this up?
The same actors who have a stake in the elections on the side of the Deep State include the same as well as cross-over actors in the financial sector. Think Eric Holder for example. The point is that these markets are nearly overwhelming the manipulation. At a point, the markets will overwhelm the manipulation, and just like Hillary couldn’t steal the election in 2016, the cartel will lose control of the markets, and it is starting to show with all the chaos on a nearly daily basis.
The dollar, for all it’s un-glory, looks like it is running out of steam:
I don’t think we are consolidating for the next leg higher. I think we’re topping out here. People are passionate about the dollar, and I get it, so in time, we’ll see whether the bulls or the bears or right.
Speaking of the bulls and the bears, what’s going on with crude oil?
Is oil simply making a dead cat bounce, or is the recovery in progress?
Because the signs of a dead cat bounce are tell-tale:
Since I think the dollar is topping out here, likewise, I think the next major move in crude oil is up, not down, but I do think there could be more downside in crude first, especially if the dollar sits just above or below 97, or call it range-bound between 96 and 97.
Copper is still doing the polka dance with its 50-day moving average:
Which further supports my case that these market’s don’t know what to do right now.
So let’s add another “c” word to go along with the market “chaos”, and that would be “confusion”.
I guess I should have added another “c” word back when I showed the Nasdaq graph, so I’ll do so now: “crash”.
“Chaos”, “confusion” and “crash” are the words of the day.
There is another word we could add too, but it doesn’t start with the letter “c”, but rather, with the letter “s”, and that word is “shortage”.
Yesterday I put together a quick post on palladium:
That’s right. That’s another record high in palladium.
But that’s not why I wrote that post. I wrote that post because depending on where you’re looking, palladium was shown pricing at parity with gold.
As in the gold to palladium ratio was/is basically 1.
Check out that post and the significance of it if you have not already – it has to do with the “s” word.
Platinum is confused right now:
Which makes sense with markets in chaos. I mean, think about it – gold and silver are arguably beginning their rallies, yet platinum continues to fall. So one might say, “well, it’s just the fact that platinum is mainly an industrial metal, so that’s why platinum is falling while gold & silver are rising”, and that argument could hold water, but it doesn’t explain the fact that platinum is falling in the face of a surging palladium, which is also a mostly industrial metal.
Gold is slowly but surely making a run at its 200-day moving average:
Could we get there this week?
Tomorrow will be very interesting for sure, and Friday too with the release of what will surely be labeled “the most important jobs report, ever”.
I honestly don’t think we get smashed on Friday.
Silver is holding above its 50-day moving average:
I think the opposite for silver as I do for the dollar. I do think there is consolidation in silver in preparation for a surge higher.
An explosive surge higher?
If the paper markets are buckling under pressure, as evidenced by palladium, then the coming surge in the price of silver may very well be explosive.
The GSR still favors the white metal:
But if we get the upside surprise I’m looking for, and if we get any explosive upside surprise, then the window of opportunity I talked about on Monday also applies to the arbitrage play with the ratio.
What’s the bottom line?
“Chaos”, “confusion” and “crashes” are the words of the day, and the markets are happy to take a day off to re-assess the situation.
Oh yeah, doesn’t anybody else find it interesting there is, what seems to me, eerie silence regarding that 1988 Economist Magazine that everybody loves to hate?
Time is running out, but could we be in for a December surprise?
I mean, we do have the President declaring market holidays.
What if we get another one for some other reason?
And what if we get a bank holiday?
Might as well add another word, but it is for us, not the paper pushers or the status quo apologists: that word is “vigilance”.
We all need to be vigilant here, and we also need to be prepared, be aware, and not let our guards down.
Only one week into the last month of 2018, and it sure looks, figuratively, and possibly quite literally (vive la France anybody?), that 2018 could end with a bang.
If you’re like me and you think former President George H Bush was a corrupt and dirty treasonous Traitor, then instead of mourning for him, take the time to do what the markets are doing.
Assess the situation and figure out what the heck is going on.
The chaos, confusion and crashes are only on pause.
Will Thursday return to normal without a hitch?
Or will there be some sort of glitch?
Or something even worse?
– 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.