Video-June-06-2013-Archives-Daily-Show
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Keep A Well Pealed Eye On Equities
The whispering is well under way. It can be heard from the Wall Street Journal to CNBC, from Bloomberg to The Financial Times. It's being whispered in Chinese, Japanese, German and all forms of English.
Equities are about to correct. The numbers that are floating around the airwaves and ether are anywhere from 12 to 17%. All of this is contingent on what happens tomorrow with the May labor report.
Weekly unemployment claims filed declined, but the four-week moving average, a more accurate gauge of the total picture, rose by 4500 persons. May's "jobs added" figure is due out tomorrow morning. Many equities analysts are putting a smiley face on the weekly figures.
Dan Greenhaus, chief economic strategist at BTIG LLC, an institutional brokerage, said in a note to clients,"While there is a fair bit of worry in some quarters about an economic slowdown, the stability seen in the weekly jobless claims data is quite reassuring."
To a certain extent Greenhaus is right, but if the 170,000 jobs predicted to have been added in May do materialize the unemployment meter will remain stuck at 7.5% or possibly go down a tenth of a notch to 7.4.
Those figures will be important to gold because they will give us a reasonably accurate bell-weather as to what the Fed will do at the FOMC meeting on June 18 and 19.
Due to strength of the euro and yen, the dollar ticked down significantly today so most of what has gone on today has been a currency play. Regular trading activity shows gold off 7.50 while a weakening dollar has added around 17 bucks to the price. The European Central Bank and the Bank of England said they would maintain interest rates at 0.5%.
ECB chairman, Mario Draghi also said he and many eurozone finance ministers are firm on continuing accommodation for as long as necessary. "Our monetary policy stance will remain accommodative for as long as necessary," are his exact words. Draghi also said that, "Euro area economic activity should stabilize and recover in the course of the year, albeit at a subdued pace." He was more optimistic about 2014.
While these developments are interesting, nothing really trumps the state of equities as it relates to our interests. We look for more volatility in stocks through the summer. But we also should start looking at a quick bump in the economy by early fall into the holiday season. We hope the latter generates a good foamy head of inflation.
Wishing you as always good trading,
Gary S. Wagner - Executive ProducerMarket Forecast:A weakening US dollar and softening equities markets were certainly factors influencing the nice upside move in gold today. Today’s intraday low in gold at 1391 lends technical evidence to gold’s current support level at around 1385. It is however the sustained move above 1400 that offers those gold Bulls the greatest ray of hope that what we have been witnessing is an extremely strong correction rather than a pivotal move from a bull market to a bear market in gold.Tomorrow’s jobs report could prove to be most interesting as we are well aware of the fact that the federal reserve is looking at employment in the United States is a key critical factor in their current monetary policy or quantitive easing program. For the moment we recommend maintaining our long position in gold however we might look to raise stops prior to the release of the jobs report tomorrow.
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Market Sentiment:
Maintain Long gold @ 1400 stop below 1380
From the week of 05.31. 2013 COT LINK See previous weeks in Historical Commitments of Traders Reports. |
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Gary S. Wagner - Executive Producer