Video-June-18-2013-Archives-Daily-Show
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Waiting Game
The waiting game for the results of the FOMC drove investors today to liquidation in the 1375 to 1380 range, which then led to pre-set selling, driving down gold a little more than 1%. Silver, continuing its free fall, is down almost 7/10ths of a percent.
The waiting game has grown excruciating for the safe players. Of course the bears out in the field are elated.
Meanwhile, the consumer price index rose a measly 0.1%, the first rise in three months. The last 12 months have seen only a 1.4% rise in the inflation rate. So, we can assume there is no fear of inflation and we can also assume we are many miles from the Fed's target of 2.3% inflation.
"Inflation has faded to only a minor irritant," said economist Michael Montgomery of IHS Global Insight.
According to USA Today, "Housing starts rose 6.8% to a seasonally adjusted annual rate of 914,000, the government reported Tuesday. April's rate was revised up to 856,000 from the 853,000 pace originally reported. Single-family housing starts rose 0.3% last month after two months of declines."
But we are all waiting for the outcome tomorrow of the FOMC. The equities markets, seemingly in anticipation of a continuation of QE3, rose again. Today the composite of indexes was up 0.8%. Bond yield also rose.
"Here we are again," said Gregg Fisher, founder and chief investment officer of Gerstein Fisher in New York. "We don't know what the actions will be. We're all trying to figure that out."
Interestingly, yesterday President Obama had some thoughts about Ben Bernanke in a television interview.
He suggested that he was likely to nominate a new Fed chairman later this year, saying that the current chairman had "already stayed a lot longer than he wanted or he was supposed to." Hmmm... The President also praised Bernanke's service.
Perhaps it is time to shuffle the deck. But, if the President really wants to help the American economy forge ahead, he and Congress will have to devise plans that will open up growth, cut waste and invest in larger infrastructure projects that will benefit the country well into the century. All this without hurting education or taking bread from the tables of poor children.
We wonder if either branch of government is up to the task. And that's why the Fed seems so disproportionately important these days.
Wishing you as always good trading,
Gary S. WagnerExecutive ProducerMarket Forecast:As we spoke of about in our opening letter the fundamentals are in a holding pattern awaiting tomorrow’s release of the minutes from this most recent FOMC meeting. The technical indicators however provide us with different insight. Most recently we have been testing support levels and breaking through them as the market has been meandering to lower prices. Most recently the area of 1380 which had formerly been support as now becomes resistance. Today the market went and tested 1360 once again our new area of support. We have a minor level of support at 1340 with our major support at 1320 the most recent lows. We have been recommending the use of an option strategy in which you are a option writer. As a writer of call options you base your strategy on the belief that gold prices will maintain trading in either a sideways pattern or trade lower. Another strategy is simply to initiate and maintain short positions in gold. In either case those two scenarios would be effective. Although no one knows what will be revealed in tomorrow’s Fed minutes release, we do know that our current monetary policy will not exist forever and at some point the process of tapering will begin. The question on all traders’ minds is not if quantitative e easing will end but how and when it will end. Video archives:http://thegoldforecast.com/video/april-2013-archives-daily-shows http://thegoldforecast.com/video/may-2013-archives-daily-shows
Market Sentiment: Bearish, Range bound sideways market.
Support at 1360 resistance at 1380, 1403 then 1424
From the week of 06.07. 2013 COT LINK See previous weeks in Historical Commitments of Traders Reports. |
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Gary S. Wagner - Executive Producer