SD Outlook: The risk of spotting a black swan is rising…
Editor’s Note: Mike & Half Dollar will be live-streaming today at noon (EST) on our YouTube Channel! We hope you come join us and be a part of the show by participating in the chat or calling in with a question and/or comment.
Thanks for your consideration!
Last week there were several market and geo-political uncertainties which dominated the news cycle.
On the geo-political front there was the attack on the Saudi oil facilities, and on the markets front there was the September FOMC.
Additionally, there was the DOJ’s criminal racketeering case brought against two current and one prior JP Morgan gold & silver traders.
But this week?
There is no clearly leading news story, perhaps other than the Biden-Trump-Ukraine distraction pushed over the weekend by the MSM, but I don’t expect that story to last or have much of an impact on the
narrative markets as the sheeple, in general, no next to nothing about the past or the latest developments.
What does not having a clearly leading news story mean?
It means that for the moment, we’re in the proverbial “calm before the storm”, but it also means we’re highly susceptible to something swooping in and wreaking all sorts of havoc.
In other words, with the markets having no clear focus to start the week, there is a higher risk of some sort of “black swan” event.
I’m not sure how long the calm lasts, and we don’t necessarily know if this week will be the week which changes everything, but without a doubt, it can’t last much longer and we’re surely close to it.
Perhaps gold & silver are sniffing this out?
For silver has looked strong overnight and is challenging $18.50 to open the week:
The white metal has plenty of room to run to the upside with the technicals no longer extreme.
Gold was also strong overnight and looks to be starting the week above $1525:
Gold’s technicals are slightly more bullish as silver’s, and we also have plenty of room to run to the upside.
This may be the calm before the storm, but looking at gold & silver’s overnight price action, it’s a very uneasy calm.
The gold-to-silver ratio looks poised to drop:
If the rally begins this week, I think we could be in the 70’s very soon.
Palladium is starting the week out at all-time highs:
I would feel much better about the support at $1600 if we got a hard break to the upside.
Platinum is also looking good to start the week:
Technical analysts would say we’ve got a textbook “bull flag” on platinum’s daily chart, and if we do, that means the break-out is coming very soon.
I think we could begin the next rally in the precious metals this week, in part because I don’t think this calm remains for long.
That said, I will be closely watching the narratives that are pushed out by the MSM.
For example, if there is “progress” in the trade war with China, then it will be clear the intention is to keep the markets or confidence held together for just a little while longer.
Recall from a few weeks back, one of the things I’ve noticed is that the cartel is having a hard time keeping all of the plates spinning, and we saw exactly that last week with the lack of coverage on the trade war front.
If Dr. Copper is still an influencer, the outlook does not look good for the global economy:
We’re already forming what looks like a sixth consecutive day of losses, but as I said on Friday, I’m not looking for this weakness to last much longer due to the cartel’s coming “too little, too late” attempt to bring more silver to market.
If the technicals matter, crude oil is painting a “bearish engulfing candle” today:
There is a full trading day and trading week ahead of us, however.
Now to the interesting dynamic of the week: China.
You see, the markets in China are going to be closed all next week for “Golden Week” festivities.
That includes the Shanghai Gold Exchange:
Which adds an interesting dynamic to my “calm before the storm, or week it all began” analysis of what comes this week because, well, if you really wanted to screw with the Chinese, wouldn’t you want complete and total chaos in the markets for the entire week before China’s markets go on holiday?
Think about it this way: You’re going on a vacation to visit family, across country, for the entire week of thanksgiving, and the week before you go, an arsonist is on the loose in your town and burning down ten houses a day.
Now, how would you feel about going on vacation for a week after 70 houses in the town burned to the ground?
That’s what we call “psychological warfare”, and the US would have the upper hand on it over the next two weeks.
Normally the cartel likes to use Chinese holidays to strong arm gold & silver, but just like we saw no summer doldrums this year, I’m not so sure we’re going to see the cartel strong arming gold & silver during Golden Week like we’ve seen in recent years.
Furthermore, now that it is indisputable that gold is in a bull market, strong arming would only lead to more dip-buying.
The Dow is still close to an all-time record high:
I was thinking the stock market would get ramped to all-time highs last week, which makes this week all the more interesting.
Well, in my opinion, we’re not just going to sit here near all-time highs indefinitely, which means the break-out or break-down is coming very soon.
There is still a lot of back-and-forth between analysts about whether the stock market continues to all time highs and beyond, or whether we’re in for a nasty crash.
I think we’re in for a nasty crash, for a couple reasons:
- The government and the Fed need a crisis, not so much for propping-up the markets at this point, but for exerting power over the people.
- If the plan is to bring economic misery and financial ruin to America, that is not done in conjunction with a surging stock market bull run.
The VIX has a feeling of uneasiness to start the week:
Whereas last week we were on the brink of war with Iran yet the market couldn’t care less, this week there is no clear catalyst which would inject a dose of fear into the market, but someone or something looks like it’s getting spooked.
Yield on the 10-Year Note will be interesting to watch this week:
Especially since the Fed unofficially began QE4 last week.
The dollar looks strong to start the week:
We could see another bull trap in the DXY, but any strength here is a gift for people spending dollars.
It is a gift in much of the same way that weakness in gold & silver prices is a gift to stackers.
The bottom line as we find ourselves here this beautiful Monday in late September?
With no one thing dominating the news cycle right now, we’re in a relative calm.
The MSM wants to push the Ukraine scandal, but that news is all noise.
Does anybody really think the Deep State’ll be held accountable?
Other than a Globalist stepping down here, or a firing there?
I’m not sure about you, but I have this uneasy feeling.
It feels like the calm before a huge market storm.
Last week was the potential for big turmoil.
We didn’t see any big market turmoil.
This week there is little potential.
But it could be catastrophic.
It could be devastating.
Use this calm wisely.
Use it to prepare.
Or to fine tune.
– 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.