Timing & trends
From Jason Goepfert at SentimenTrader: The Dow has had a big little losing streak. Over the past 30 days, the index has seen 27 days with either a loss or tiny gain. That’s among the worst stretches since 1900, especially when the overall loss is small and it occurs relatively close to a multi-year high. The others usually led to gains over the next several months, and the exceptions’ losses were all small…
…also from King World:
One of the greatest monetary experiments in financial history has been the global central bank buying of government debt. This has been touted as a form of “money printing” that was supposed to produce hyperinflation, which never materialized as predicted by the perpetual pessimists. Nevertheless, the total amount of Quantitative Easing (QE) adding up the balance sheets of the Federal Reserve (Fed), the European Central Bank (ECB) and Bank of Japan (BOJ) is now around $13.5 trillion dollars, which by itself is a sum greater than that of China’s economy or the entire Eurozone for that matter.
“So hold on – this is going to be the craziest ride in monetary history of humankind” – Martin Armstrong
…also from Martin:
- Don’t miss the next big rush in the cannabis / marijuana sector.
- Where is crude oil and natural gas headed?
- What about gold and silver?
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Commentary & Analysis
Shorting Euro today…cautiously…
Clarity in the currency markets of late has been cloudy at best. The competing rationales continue to be: 1) End of the Trump reflation trade and therefore the US dollar has peaked: or 2) It wasn’t necessarily the reflation trade (which still may be on but delayed) but the rising US yield differential supporting the dollar on the back of three Fed hikes in 2017 which was the driver anyway.
Some news from today and yesterday gave us a bit more confidence in our Wave chart setup….
This headline story from Reuters, coupled with some data that suggest a decline in US growth momentum supports the dollar bearish view (or the euro bullish view):
- WASHINGTON, April 20 (Reuters) – Dallas Federal Reserve President Robert Kaplan said on Thursday that three interest rate hikes this year remains possible but that the U.S. central bank has the flexibility to wait and see how the economy unfolds. “The median for three rate increases this year…is still a good baseline. If the economy develops a little more slowly, then we can do less than that and if the economy is a little stronger, we can do more than that,” he said in an interview with Bloomberg TV.
Yesterday’s inflation data out of the Eurozone likely plays into ECB rate expectations:
…so we went short a ½ position EUR/USD on this setup this morning, as we had an extension target of 1.0776, which it hit right on the button today. The target, technically, based on an extension of Wave C equaling 1.618 x Wave A and also a key retracement, 61.8% of Wave [1] down, coming in at the same level…1.0776…it seems to be holding now and looks as if this is a good risk/reward short:
You never know; but so far so good…
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- Gold has no counter-party risk in a 2008-style crash.
- The continual devaluation of the US dollar is inevitable.
- Gold will eventually return to its true historic role as money.
- The destruction of government balance sheets, continual devaluations, and the widespread implementation of zero interest rate policies probably will result in hyper-inflation.
- Central banks are nearing an inflection point where they no longer can supply the gold necessary to prevent rising gold prices.
- Gold has survived governments, leaders, parliaments, central bankers, economic stupidity, graft, corruption, and wars.
- Investment demand for gold is rapidly accelerating. The western world is in the early stage of a panic and “gold rush.”
- There is growing recognition that many paper gold products are not backed by physical gold.
- Mine supplies are not anticipated to rise for several years, if at all.
- Eastern Central Banks are accelerating their purchases of gold.
- Skepticism about official U.S. gold reserves is increasing.
- Large short positions in futures markets must be reversed or “cashsettled.” (The paper suppression game cannot continue forever.)
- Gold prices are climbing from their December 2015 low in an established bull market.
- Up to $10 trillion (Doug Casey) in U.S. dollars may return to the U.S. and create dire inflationary consequences if global confidence in the dollar fades due to war, politics or economic policies.
- A derivatives disaster is likely. Counter-party risk will rise again!
- Long after most fiat paper and digital currencies have disappeared, gold will be used as money or backing for currencies.
- Gold will rise to $10,000, or far more, depending upon government and central bank devaluation policies. Expect $10,000 in years, not decades. Read: “Buy Gold Save Gold! The $10 K Logic.”
(This list was edited and adapted from an email blast by Tom Cloud).
….related:
An In Depth Look at the Precious Metals Complex
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