Trump Rally Continues as U.S Stocks run to New Record Highs

November 21, 2016 - 5:17pm

 by Gary Wagner

As we approach Thanksgiving later this week, it seems as though the recent presidential election continues to have a positive influence on the US equities markets. The overall market sentiment continues to be a short-term optimism based upon the current belief that President-elect Trump’s policies will be supportive of business as a whole. It also includes optimism that the new administration will add fiscal stimulus in addition to the monetary stimulus already being funded by the Federal Reserve.

Renewed optimism in US equities today was also fueled partially by higher crude oil prices, which rose approximately 4 % today to close at 47.50, a gain of nearly 2 dollars per barrel.

Signals made by both Iran and Iraq which pointed to a potential OPEC accord were primary factors that were cited as a major motivating factor for crude oils upside spike today.  Based upon this news, energy stocks led today’s equities advance.

Energy stocks are now up 18.6% year to date.

Precious metals closed higher on the day.  Driven by a weaker US dollar, precious metals got a boost with gold trading higher on the day closing up roughly 6 dollars to 1214 (spot).

Both platinum and palladium gained on the day. However, even with a moderate push due to a lower US dollar, silver was only able to eke out a small gain today, closing slightly lower on the day (Comex Futures) at approximately $16.58.

Noteworthy today was the fact that according to Fed Funds futures the probability of an interest rate hike in December is now at 100%.

More so based upon this high probability of the forthcoming interest rate hike in December being factored into the markets, we could see the precious metals rise on other factors now that an interest rate hike has as been completely factored into the current price of precious metals.

On a much more somber note, I am saddened by the news that I received on Sunday about Robert DiLallo. On Saturday Robert suffered a massive heart attack and passed away. He will be deeply and sorely missed.

Since 2011 Robert headed up our research department, and was responsible for the research to create the content in our opening fundamental letters. He was also responsible for proofing the final draft of the opening letter and members page commentary, so please excuse any typos or errors over the next few days.

His passing which came just preceding the Thanksgiving holiday, highlights how much we all need to be thankful of what we have.

To that end we need to always embrace the good fortunes that we have, and to cherish our family, friends and health.

Wishing you as always, good trading, 

Gary S. Wagner - Executive Producer

Gold Forecast: Proper Action

We are currently flat with no active trades in either gold or silver.

Although this recent move up today is a relief to the rapid decline in precious metals prices that we have seen since the election was held on November 8, we have no technical evidence that a key reversal is at hand.

Gold Market Forecast

We have been actively looking for technical indications that this most recent selloff in the precious metals has concluded. As of this writing no such technical evidence has been uncovered.

There are two key levels that we are looking at as potential price points that could be supportive of gold. The first price point is a 50% retracement of this year's high and this year's low, which occurs at approximately 1210 per ounce.

The second level that we have been looking at as a potential support level in gold is the 61% retracement which falls at about 1170.

It is my belief that we will find support at one of these two price points. Upon technical confirmation that we have reached the bottom we will issue a buy signal that we will send out as a special trade alert.

Trending Markets Forecast

Contrary to what most investors originally believed, the election of Donald Trump is our 45th president of the United States has fueled a significant rally in US equities resulting in new record highs in both the Dow Jones industrial average as well as the Standard & Poor's 500.

Crude oil prices rose dramatically today and were also cited as a major impetus in today's upside surge in equities. Lastly we have seen the US dollar which is moved to 13 year highs as of last week begin to weaken for the first time since the dollar rally began.