Hey! Where Did All The Money Go?

July 21, 2015 - 5:10pm

 by Gary Wagner

Granted, the euro is up over 1% today. And Asian equities ran to positive territory, although only the NIKKEI showed any real vitality as it bumped up almost 1% on the day.

Some investment money was flowing into Shanghai and Hong Kong, but no market-shaking money migration was seen.

In Europe, equities fell by 0.30% (FTSE) to 0.70% on the CAC (the French bourse) to the DAX, which fell by more than 1%.

U.S. equities are down as well in afternoon trading, but only the DOW saw a significant downdraft, off around 1%. The S&P 500 is off about 0.35% while the NASDAQ was off a tenth of a point, which is understandable because of its recent hearty moves higher.

It is Q2 earnings report time and with each day, uncertainty flings open its cape and is ready to bite into the neck of the current bull-run in stocks. Earnings are mixed and through a series of strokes of fate, it seems as if all bad news is released one day and all good news the next so the stock markets will be bouncing around for the while.

Many thought that crude oil ought to come off its dip below $50. It has, but not by very much. West Texas Intermediate is up only 0.40% to 50.59 per barrel. Brent North Sea fared slightly better. It’s up 0.60%.

Gold see-sawed on the day, is up about $2.30 in late afternoon, but all of that is due to dollar weakness. If regular trading alone were to be examined, the yellow precious metal would be down $5.70. Silver is up almost a full percent.

Back to currencies for a moment: the dollar is down against the yen today as well as against the euro. In the case of the yen it seems almost like a slight fluttering of the heart. The dollar is off against the Japanese currency by 0.25%. It is virtually unchanged against the British pound.

Most of the downside pressure on the U.S. dollar today is due to profit taking knocking the greenback off its recent highs reached Monday. We don’t look for this to be a longer-term trend. The dollar has many hidden strengths, not the least of which is the American economy. While it seems to be stuck in middle gear the U.S. has shown some very intriguing depth, especially, of late, in housing, both new and existing.

Investment is also humming along. The main drag on the world’s largest economic engine remains consumer spending and it will stay that way till wages rise.

We expect that to happen as more and more Baby Boomers retire and they have to be replaced with members of the Millennial generation moving up the ladder.

The retirement phenomenon will also affect housing. There are about 7 million more Millennials than Boomers. Those young people are becoming creditworthy. Once they leave their starter rentals, there will be a stampede toward home purchasing.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

Gold Forecast: Proper Action

We issued a buy signal yesterday:

Maintain current long gold @ 1106

Maintain stop below 1093

Gold Market Forecast

Yesterday we noted:  The real question is whether that intraday low completed our current Elliott wave count in which we are currently in our fifth wave down.

If that is the case we will see support enter the market and some sort of pivotal key reversal candlestick pattern will be identified. That would trigger a buy signal that would be sent out via a special trade alert. Last night we issued a buy trigger in gold. 

The ca·ve·at: On the other hand if we see continued selling in the market we will have to reestablish our downside target and in that case we would look to reverse our position to the short side.

Trending Markets: Proper Action

As we spoke about in market forecast, we have seen the potential for corrective phases entering the four primary markets that we have been following. If we receive technical confirmation of a key reversal in any of these markets, that would trigger a trade alert that we would send out by special email with specific trade recommendations.

Trending Markets Forecast

Over the last couple of weeks we have seen clear and concise trends in play with the US dollar and US equities markets moving higher, with the euro moving lower along with crude oil.

Although we cannot make a definitive statement from this one-day move, it appears that these markets for the most part have entered a corrective phase in which they are reversing the former direction that was prevalent within the market.

US Dollar –Lower corrective phase now possible

Euro –Higher corrective phase now possible

Crude Oil –Higher corrective phase now possible

S&P 500 –Lower corrective phase now possible