Wouldn’t It Be Nice? Oil and Equities Higher, Gold Slides

September 15, 2015 - 4:10pm

 by Gary Wagner

What we’d like to say today is, “Relax. Don’t worry. Be happy.” That is, when it comes to thinking about the Federal Reserve and the start of its September FOMC meeting.

We’d like to say, “Follow the data,” except you’d tear yourself in two, given how contradictory the data points have been (forever, it seems like). Just today, consumer spending was up, but not as much as predicted.

However, spending has been up for two straight months now and August is a notoriously flat retail month. One note: often enough, sales figures for back-to-school shopping are late to the mix of statistics. On top of that, gasoline prices have been plummeting and driving down raw spending numbers, which are not adjusted by the Department of Commerce. In fact, consumption of gasoline was up significantly although pricing was down impressively.

So, follow which data?

Also in the energy sector, it was announced today by the White House that it distinctly does not support a move by the U.S. House of Representatives to repeal a 40-year-old ban on exports of crude oil. That helped – for a number of perverse reasons – to push U.S. crude prices higher. One would think that shutting out demand from the at-large world market would lower prices.

The rise in energy pricing provided a good assist for the Dow and for the S&P 500. Apple’s rise of almost 1.0% on the day surely pushed the NASDAQ along nicely. Follow the leader, as they say.

Which way are the equities investors betting on the outcome of the Fed meeting? All three U.S. indices are up 1.3 to 1.5%. In short, that means they are expecting no rate hike and therefore more of the easiest money ever in the U.S. economy.

The release of positive, but not stellar, news about retail sales and industrial output in the U.S. seems to be acting as a further tempering of analysis that had been saying a rate hike is inevitable come Thursday.

Interestingly, volatility has continued to decline as measured on the VIX, which certainly must be interpreted as a vote of confidence by the investment world. Confidence in what?

That regardless of what happens in two days – rate rise or no rate rise – life will go on, the Rockies won’t crumble and Gibraltar won’t tumble into the sea.

But we are just like everyone else right now… waiting, wishing and hoping. Wouldn’t it be nice to go to sleep and wake up on Thursday at 2 PM? Wouldn’t it be nice to stop talking about the FOMC?

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

Gold Forecast: Proper Action

This morning we sent out a special "TRADE ALERT" reccomending that you sell gold @ the market

Maintain current short gold @ 1105.36

Main current stop just above 1117

Gold Market Forecast

Interesting day in the precious metals markets with a mixed bag all around. We have gold trading moderately lower on the day, silver trading in essence unchanged, and platinum and palladium both surging to the upside. Worth noting is palladium’s rise today which amounted to a 2.5% gain that took the precious white metal up above $600 per ounce.

We did sent out a special trade alert recommending that our subscribers initiate short positions in gold, see proper action for details on that trade.

Trending Markets: Proper Action

On Wednesday (September 9, 2015) we sent out a special trade alert recommending that you initiate a short position in crude oil.

Maintain short @ 44.25 

Maintain protective stop @ 46.50

Trending Markets Forecast

Today we saw the equities markets once again ignite with the Standard & Poor’s 500 trading up in triple digits. Over the last few weeks we have seen a pattern emerging which can be characterized with an ascending support line made up of a series of higher lows, and a flat top consisting of a series of equal highs. At this point we are approaching the apex of this pattern.

A compression triangle looks for a significant release of energy as the price point approaches the apex of the pattern. With that in mind we are looking to initiate a long position in the Standard & Poor’s 500 (E-Mini S&P 500). We of course will send out a special trade alert once this signal is triggered.

Inasmuch is oil is trading higher on the day I still believe that there is more potential downside ahead. It is for that reason my recommendation is to maintain your current short position and maintain your current stop.