Bears trapped themselves at Wednesday’s lows, setting off a short-covering scramble that will leave them in poor position on Friday to extend the week’s winning streak. Fed clown-in-chief Yellen is scheduled to blather at 12:30 p.m., and it’s hard to imagine her saying anything that might spook the stock market. With the election less than a month away, Friday’s talk should be as warm and fuzzy as Fed drivel gets. If she pulls out all the stops, she may even say something that could be construed as dovish by Wall Street’s navel-gazing Fedologists.
Warm Fuzzies Coming from Yellen?
- October 14, 2016, 10:47 pm
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October 14, 2016, 12:12 am
Damn!
Sorry Rick. I must be tired. Here is the chart again but including the salient point readers need to see for my blathering to make sense. The simple moving average and exponential moving averages are crossing over NOW.
So whatever is about to happen is almost here. As easily observed from the chart when the 50 SMA crosses below the 50 EMA then the Nikkei rises.
And that means that Yen will fall and gold will take another tumble. But what does the Nikkei imply about US equity markets? That might be the real question.
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October 14, 2016, 12:04 am
Very sorry, here is the chart I was referring to: http://yhoo.it/2e2fS4j
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October 14, 2016, 12:02 am
In the same vein as the previous post but from another vantage point, I just wanted to talk about something interesting I came across this afternoon.
That is the subject of the Nikkei which has been doing a sideways dance for all of 2016 and appears not able to make up its mind what will happen next.
But when viewed from a longer chart though we get quite another picture. The Nikkei is trading just below its 50 EMA and looks poised to rise at any moment. The formation since the middle of 2015 is half of a bowl shape that I doubt is going to break down anytime soon.
Well, in a general sort of way, when the Nikkei rises then the Yen/dollar falls and when the Yen falls gold almost always goes along for the ride down.
Another technical set of eyes would be most welcome here. Any of the Pivoteers have a good idea about where Japans index is headed in the next month or two and if so, would you then agree it may mean the kiss of death to what remains of platinum and the rest of the precious metals sector.
In other words….are we going to retest the lows in gold of last December? That would be good to know.
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October 13, 2016, 11:19 pm
I just HAVE to say something about platinum here and particularly as it relates to stock market corrections. So this short post is kind of on-topic in an indirect way. The reason I bring this up is because of the steep losses platinum is currently taking relative to other precious metals.
Does everyone remember back in 2008 when platinum made a stunning dive beginning in January of that year? The stock markets had just begun to roll over and then platinum suddenly went into a free-fall death spiral losing more than 1300 dollars in the next 3 quarters.
Well platinum is a tight little market dominated primarily by professional traders. Unlike gold that attracts a fairly wide audience of retail buyers, religious nutcases and the blindly devoted, platinum sees far fewer of those type of investors who trade by-their-hearts and so is more subject to pure speculative and technical forces.
It is therefore something to watch carefully because of the nature of the players behind the controls who are better attuned to sell signals than the generalist retail crowd. In the case of 2008 the pro’s had seen the top was in and bailed out in a big, fat hurry.
Secondly, those guys were busy in 08 raising cash and taking profits as the stock market abruptly imploded and took almost everything down together. So when we see a sharp sell-off in this particular commodity that is steeper than the usual gold/platinum correlation might imply, the hairs should be standing up on the back of our necks like a porcupine in heat.
Ok, now I am getting to my point.
It may very well mean that the boys have sniffed out a stock correction in the offing and those guys are not waiting around to get slammed to the pavement when the bell tolls midnight. A platinum sell-off is our warning that serious traders might be preparing for what could be a significant event.
Here is some proof: Look at the following chart of gold and platinum and notice that plat leads precious metals in declines both on the way up and the way down. Its helpful to just study the chart and learn from the losses of others (yours truly) who found out how platinum works the hard way! (not always of course. nothing works “always” but this current platinum crash is coinciding with an obvious market top and my Spidey senses are ringing off the hook).
While you guys are at it, play around with the time periods on the chart such as six months, one year etcetera and you will quickly get a feel for how well correlated these two metals are. The correlation gets as high as 95% at times which is pretty damned scary and should give everyone a somber moment of pause to consider just what that is really saying about the future of gold.
The gold bugs will never tell you any of this of course. The current platinum trend tells me that traders are afraid and that deflation is still a work in progress for commodities. All commodities unfortunately. And that still includes gold until the correlation breaks.
http://www.macrotrends.net/2541/platinum-prices-vs-gold-prices
Farmer, Unfortunately, I have nothing short term at the moment.
I do have a long term chart for the Nikkei and it shows the next peak to be 18000. When you zoom into the Yahoo chart, it shows a spike to above this target – but this spike doesn’t appear on the Stockcharts.com for the Nikkei 225. So, ignoring that anomaly, the Nikkei will eventually peak out at 18000 at some point – I have no idea when. From there it’s down, down down to 10,000.