Dudley Driving
Video section is only available for
PREMIUM MEMBERS
Submitted by Gary S. Wagner on Tuesday, November 19, 2013 - 16:33.
The President of the New York Federal Reserve is in the driver's seat today. Unfortunately, he drove gold down.
"While growth in 2013 has been disappointing, I believe a good case can be made that the pace of growth will pick up some in 2014 and then somewhat more in 2015. The private sector of the economy should continue to heal, while the amount of fiscal drag should subside," William Dudley said in remarks lifted from a speech he delivered at Queens College in Flushing, New York.
"Despite near-term concerns, growth prospects among our major trading partners will improve further next year. This combination of events is likely to create an environment in which business investment spending will strengthen."
Memo to Mr. Dudley, et alia: please show us the money. We mean the real progress. It's got be more than a feeling.
For instance, explain this: The National Association of Home Builders/Wells Fargo Housing Market Index came in unchanged in November at 54, missing analysts' calls for an uptick to 55 this month. We're at a loss as to evidence. Dudley alluded to that himself.
"As growth picks up, I expect to see more substantial improvement in labor market conditions and a gradual updrift in inflation back towards the [Federal Open Market Committee's] target rate," Mr. Dudley said.
The bigwig banker, mindful of how the economy has confoundedly managed to under-perform expectations in recent years, warned that a true improvement in growth "remains a forecast rather than a reality at this point." The FOMC "will continue to monitor U.S. and global economic conditions very carefully and will adjust our views on the likely path for growth, inflation and the unemployment rate accordingly," he said.
Many forecasters have expected that mixed data and lingering uncertainty resulting from October's government shutdown would drive the Fed to press forward with its $85 billion-bond-buying program until sometime in early 2014, before cutting the pace of those purchases. [Quoted from NASDAQ's website]
If we were to speculate on which employment report is crucial, it would be the one issued for the month of January in early February. January is a typically heavy layoff month, that position abetted by the end of holiday selling.
We are also skeptical of inflation numbers - in general - but even when we look at the figures that the Fed ostensibly pays attention to. With Europe and Japan fending off deflation, - two economies that, together, are larger than the U.S. economy - where would inflation come from?
Certainly the Fed can't be thinking that a shrinking workforce and a steady-as-she-goes unemployment rate is cause for celebration. Or tapering.
Regardless, Dudley's remarks have gold down 1.25% and silver down 1.85% as of 4:40 New York time.
Curiously, the dollar is down today as well. One would think that tapering would mean a rising, not falling, dollar. Oil and the 10-year bond yield are also down. Those stats are contraindicative of a meaningful by Dudley. Stay tuned.
Gary S. Wagner - Executive Producer
Market Forecast:
After gold price ran into resistance at 1335 two weeks ago, we began to look for lower gold prices. Then on November 12, gold hit an intra-day low of 1250, and we expected an upside bounce. I thought the bounce would be short lived and take prices to 1300 to 1310. Well we were right on one count. The rally was short lived. However, the rally (if one can call it that) took gold prices to an intra-day high of 1294, before returning to a downward path. Now that the selling has resumed we need to look at the key support levels. First is the recent low of 1260 and 1250. Just below that is the Fibonacci retracement level of 1236-1239. Today’s video will detail these critical support levels.
Proper Action :
The fact that gold and silver prices have once again found themselves under strong selling pressure is not what concerns me the most. It is our current Elliot wave count that we need to focus upon. Our current count is indicates that gold is in a final wave 5 down. Within this wave (5) we are in 3 of 5, which by definition cannot be the smallest of the impulse wave. With that in mind todays video will extract the 3rd wave by comparing it to wave 1. Today’s video will report the findings of this technical study. Traders should look for lower prices and look to short any rally that falls short of a break out.
No open trades
COT LINK See previous weeks in Historical Commitments of Traders Reports.
Click on bull below for current chart gallery
Gary S. Wagner - Executive Producer