Video-May-30-2013-Archives-Daily-Show
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Submitted by Konrad Urbanowicz on Friday, May 31, 2013 - 18:26.
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Predictable, So Predictable
I say high, you say low
You say why and I say I don't know, oh no
You say goodbye and I say hello...
- Lennon & McCartney
Alrighty. The previous five business days have focused on current Fed board members plus a past head of the Fed (Volcker) being quoted or misquoted, interpreted or misinterpreted, pulled, slapped and tickled for some sense of where the QE3 and overall interest rates are headed.
Here's the secret answer: they're headed wherever the economy is headed. If the economy keeps slogging, the Fed action could be with us for many, many more months, and even grow larger. If the economy heads up more sharply, the Fed could begin "tapering" the bond and mortgage buybacks.
Make no mistake. There is a brimming basketful of good things happening in the American economy. But, the two key criteria for the FOMC in the months ahead are sorely failing.
New unemployment claims are up over estimates for the third week in a row. Inflation, as noted innumerable times here, is non-existent or on the razor's edge of deflation.
The rise of the equities markets has been bad for gold. But, the luster is slowly being rubbed off stocks, except for strong blue chippers (old and new) and companies that have a strong core product or service line - energy drilling; raw or processed farm commodities (watch corn and beef this year); and certain high tech categories. Autos remain strong, but eventually all the pent-up demand due to millions who had held onto their old cars way past the sell-by date will dry up. Older new tech issues that are already top heavy in price will struggle. New tech companies with innovations to cope with what's needed now will make money for their shareholders. (Cyber security is one such sub-sector.)
These dynamics affect gold: 1) Uncertainty as communicated by the Fed. 2) Poor or no action by elected officials - lack of vision. 3) Anything slightly erratic in sensitive marketplaces other than precious metals. 4) War (What is it good for? Driving up the price of gold.)
While we believe strongly in our technical trading system, we can't entirely discount fundamental information.
When Fed officials begin to hem and haw about the direction of the American economy and try to tie that to how they might act in FOMC meetings, head for the nearest trading terminal and buy precious metals.
But! Be prepared for prices to come right down and stay within a range.
Wishing you as always good trading,
Gary S. Wagner - Executive ProducerMarket Forecast:On a technical basis today’s upside move of over $21 in gold is extremely significant. First and foremost the market was able to rally and sustain a close above 1400, but more than that it not only challenged the former high of 1412 but on a closing basis was able to take out that price point. Therefore it seems as though we have a potential bottom in the market and our best advice is to begin to scale long positions into the market placing stops below 1400 in gold and placing stops below 2170 in silver. This trade is a high risk trade in that up to this point we have not tested 1400 to see if that will ultimately hold as superlative support.Video archives:http://thegoldforecast.com/video/april-2013-archives-daily-shows http://thegoldforecast.com/video/may-2013-archives-daily-shows
Market Sentiment: Possible Bottom Former resistance at 1400 may become support short @ 1400 out at 1412 loss of- $12
From the week of 05.24. 2013 COT LINK See previous weeks in Historical Commitments of Traders Reports. |
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Gary S. Wagner - Executive Producer