CHARTS OF THE DAY – BONDS, COMMODITIES & STOCKS
Bonds – this past week saw one of the largest weekly selloffs in decades. After finally reaching negative rates in much of the world, has the 36 year bond bubble finally popped?
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Hi Gary,
For me I think you are onto something, your macro directional views I share, and the rationale you present for them I haven’t considered before, so good supporting pieces of analysis!
The bull market in bonds has likely ended. BUt shorter term TLT move has been a 6 std deviation outlier so a bounce …big bounce to reset sentiment first.
Stocks I think would be the beneficiaries of a bond bubble burst and actually go up.
It’s been my theory for awhile that stocks still have more upside, maybe a lot more upside. But…
If the bond bubble is bursting… and this entire rally in stocks has been driven by super low interest rates and QE, I have to wonder if the withdrawal of that would invalidate my theory and send stocks down or sideways and liquidity would instead leak into the undervalued commodity sector creating 70’s style inflation?
I think we will get some serious inflation. The labor market is tight and then if you add Trump’s protectionist measures…we can see serious wage growth. Already it is at 2.8% wage growth YOY which is the highest since the financial crisis.
Couple that with a corporate Tax cut which increases profits and we have a recipe for a big up move.
Putting aside pet theories, let us consider the following. Strong momentum in TNA , XLI and FAS. So, it is unlikely that the SM is about to roll over anytime soon. As fo pms, the trend is down. There could be occasional bounces before the final low. It is best to take one week at a time and let the market telegraph its intentions.
Exactly. And what happened to the 7 year cycle low, that stocks going to rally for the next 7 years??? With Russell, Transports so strong, how to be bearish? Market should be ok until the first quarter of 2017. Then let’s assess again then
Remember price never rallies for the full duration of a cycle. There is an advancing phase of the cycle and a declining phase.
Here is another theory. Now that QE has ended maybe stocks revert back to their normal 4 year cycle instead of the QE stretched 7 year cycle they’ve been in since 2000. If that’s the case then they just rallied for almost a year of a new 4 year cycle. A top now would be a left translated cycle with a bottom due in maybe 2019 or late 2018 (left translated cycles can often shorten a bit).
I think Gary is on to something. Just bit too early. I suspect rally till next year. Then watch out
Last week, bonds sold off and so did gold, and oil……..but stocks rallied…..doesn’t fit with your theory…..
Short term moves only. The election was the trigger for gold to start a final move into a yearly cycle low. Stocks to reverse the sell off into their ICL (maybe, I’m not convinced yet that stocks have completed an ICL). and for the bond market to dramatically accelerate the selling that began this summer.
Yes sir my theory precisely
Mr. Savage,
Can give an update on the gold and miners? Do you think that this is the ycl and leg 2 up is about to begin ? If so how will rising rates effect? Thanks.
Gary
Any chance Friday was the bloodbath you were looking for? Already tagged the 61.9 Fib target or very close to it.
No chance T-bonds to pierce 200Wma now.
A large bounce later next week through January and then the resumption of the downtrend with a break of the 200Wma in next spring makes the Trading Framework for Ts.
Agreed. You have been sharp as of late Mr Popovici.
Any other insight regarding markets would be appreciated.
RUPP, yes, I opine the same as you: retracement to 50dma and formation of the second shoulder of an inverted H&S pattern while stock market falls to YCL through jobs report on DEC2.
I suspect stocks continuation rally. Look at dax. Looks poise to breakout of it long consolidation range. It’s breakout could be like dow transport
I forgot to include $tran in my previous post. Your post fills that gap. There is no point in muddying waters by going into a complicated thought process in broad strokes. That kind of exercise did not help since September. Let us see how the strongest groups fare over time. With so much momentum behind strong groups, near term direction would likely continue. Regression to the mean could take place over several weeks. or months Who knows, who can predict the rate of descent? Let us be patient and watch price evolution over time.
Gary… you become more & more equivocal….
can you be more clear…??
Thanks
Alex,
Great to hear from you. I was in surgery Friday, so I missed out on Thursday & Friday market action.
But yes, I believe gold’s YCL is still ahead — a view I’ve held since that lovely triangle formed during the month of September.
Stanley Druckenmiller….who has more money than anyone on this blog…sold all this gold into the election night. Now that would have to be futures as he cannot trade GLD till the morning.
http://oneradionetwork.com/archive/trader-scotts-market-blog-druckenmiller-sold-gold-night-election-november-10-2016/
I am assuming he had a sizeable position and good for him that he unloaded into strength rather than into weakness.
I am betting the next COT (not one being released tomorrow) shows a big improvement.
So I am writing this post at half past midnight New York time. Gold has fallen damned close to my target price of 1212.10 and then bounced. It has actually bounced back from 1212.80 which means I was off by 70 cents but nobody got hurt so no worries!
The only reason I mention this is because its now coming in for its first retest of that price. And so this is the moment of truth the way I see things. Gold need to hold 1212 which is the 50% level (based on closing numbers) or its probably all over for our precious this year.
**And there we have it (some minutes have now gone past). Gold hit precisely on 1212.00 which is 10 cents lower than its half way point. I suspect this implies we will be in doubt a little longer and the bounce now taking place is less certain to be the real deal.
Still holding my bear trades by the way but it looks to be time to get out until the declines resume.
Oh yeah, the point of my post was that Gary had noted on his Remembrance Day post that 1208.76 was the 50% Fib level. I just wanted to note that I only use closing numbers for the calculation because using intraday’s lead to too many problems and missed targets. We have a four dollar difference in what we think is the 50% level. That might not matter to most people here but depending on how you trade it that four bucks can really affect your trading life!
**Update as I post: Gold is bouncing back by the look of it. It stands to reason this is a day to get bullish and be a buyer but I doubt it holds until Friday. My technicals say we had a failure with the tiny breach lower and that gold will continue to fall later in the week.
We shall see.
Silver bouncing back too at this time from a pivot established back in May this year. The bulls will get some relief after all. For a few days anyway. It is still early but I very much doubt we see a Monday morning smash on any of the precious metals. The sick puppies who like to trade all night long are in a mood to push metals back up and the market will likely go along for the ride however brief it may be.
Any bets we don’t hit a 100 on the dollar today? There are Burrito’s on the line people so this could be costly. To me we have at least a month of sideways to down consolidation before we get a run a real run at the 100 mark despite how close we are already. We are right at resistance now and I think we start falling back to 97 and a half as we recoil and recharge for the next run higher.
107.58 on USD/JPY.
The anti gold perfect indicator.
But USD/JPY is driven by the inverse of TLT.
So I expect a bounce in TLT. lower USD/JPY and hence higher Gold. Silver may bottom a little later.
Yes Duck. I agree with that assessment. So you also see a cycle high on Yen. I prefer the JPY/USD chart though because it doesn’t force me to invert my brain to follow gold! On that one we hit .9300 this morning which to me is the cycle low and reversal higher is now due. So far so good as a small bounce is already in progress. You should make hay with your metals trade this week. Looking very positive so far. Good call.
Not a good call yet :).
I am not sure how the final bottom plays out, because I see USD JPY touching 110 at least eventually. Correlations don’t hold forever but this one has held for a long time so breaking it (Gold going up alongside USD JPY) would require some work but would be very positive for Gold longer term. Going to bed. Good night.
God morning, ZKOT!
May you recover quickly!
I think gold is to bottom (YCL) early tomorrow in Asian trading as USX gets over-stretched to the 99.90 target.
Do you think gold can form its YCL tomorrow (while USX its ICH) ?
Good health to you, Z!
Thank you, JPeter!
USX HAS REACHED THE 99.90 TARGET ! THE FIGHT HAS STARTED!
Gold will not get to my 1182 target, USX is late-September-ripe to revert at any moment.
AMAZING! Gold has retraced 50% sharp to 1212 today in this yearly cycle
[or in the former…we may well be in a new YC already].
Now I am just waiting for my signal to get LONG GOLD!
Right on Alex. Good to see another guy here charting with closing numbers. So 1212 it is and this bounce has come at a really interesting time. Take a look at Yen/USD today. It has struck my 200 week MA perfectly and is dropping below, possibly on its way to the 50 week which comes in a .92 if you are using Stockcharts.
OK, now that 200 MA on Yen that I keep blathering about just happens to be my turning point signal for gold so this is a really bullish set up provided Yen does not get stupid and crash lower. I will exit all metals shorts today and go long based on these readings.
Looks like we see eye to eye on this one again. And the poor beaten gold longs will finally catch a long awaited and well deserved break from this nasty downtrend. More on that later. I cannot yet rule out that this may be THE turning point for gold and all other precious metals. If it is, we have picked the bottom off to the day.
Cheers!
Yeap, Pedestrian!
Good luck!
I do feel lucky. How crazy is that. JPY sitting on the 50 week now. Should reverse higher right around here if the Gods are willing. We will probably get a day or two of consolidation first though but its not necessary. About the USD; dang, it did exceed 100 so I lost a Burrito bet to myself (nobody else answered the call, thank goodness).
Gold=1226 is on BUY.
If the market were open I would have bought it here.
YCL = 1212 today 14.11.2016
Platinum also looks like it may be a buy and take a ride up right here. If you notice its now sitting on a support line going all the way back to the low of December 2015. Funny I did not see that until today but this would be an excellent reversal point if it happens so its worth watching.
Alex you are nailing it. I love that you state your predictions unequivocally! Please keep posting. Happy and prosperous trading to you. And thank you!
If the OPEC meeting fails and oil crashes to lets say a minimum of $30. I think a rethink will be needed in the comms sector. I would say gold $1000, silver $11-$12.
Oil has to continue its contraction down to its YCL alongside stocks indeed but I do not think it will get below $37
Treasuries to bottom also today, alongside gold.
Besides many reasons, pessimism on all treasuries has got to extreme: people are scared and analysts and bloggers speak about break down on long-term moving averages….THE PERFECT TIME TO BUY! All arguments to buy are ticked off for treasuries too.
PS: On the other hand, I am convinced we will not see a higher high in treasuries – the Big Bear, the INFLATIONARY PERIOD STARTED ON JULY 11 – a day which I called here, on this blog as, most likely (I was not certain though at the time) as day 1 of the Big Bear.
Likewise, USX’ ICH today @ 100.03 is already obvious.
If 1208/1212(depending on your calculations) fails then down to 1180.
Anything is possible but for me the Yen has bottomed given the look of the 5 minute chart so I think this is the end of golds declines. Who knows though. A Monday smash on gold would ruin my morning prediction but I really doubt it happens today.
5 minute chart ,how often are you trading? I’m hoping the low is in but silvers weakness leads me to think we are in for more declines.
I use the charts of lesser degree to locate hints of what is about to take place on the larger charts. I can’t really get good accuracy without them. When I hit a target like today and come within 10 cents of my goal I am pretty pleased about it too. No big fanfare or parades or anything like that because I am no ego hound but there is some personal satisfaction when I can hit a bulls eye and pin down the chart to make it more tradeable. Anyway, I am using 5 minute and even 1 minute charts when I get active. Otherwise its the hourly and daily for perspective.
Sorry didn’t mean to cause any offense. I had a look at the gold chart(5 min), stoch, and rsi, and tsi indicating a possible rise, macd not very clear.
No offense taken Dday. None at all. It was a good question.
Alex, you obviously are not trading futures as GC trades close to 24 hous/day (a little less). What vehicle are you using to trade gold?
UGLD etf
Alex, would you agree the dollar topped at 1.004 this morning?
100%
Cool 🙂
I’ve placed a buy-stop order to buy UGLD at the equiv of gold’s 1226 [after market open].
OK. Trading UGLD is a teeny different from trading futures, but I get your drift!
yes, it is this tiny difference that makes me not to trade futures.
Last week I got the anniversary of 8 ys (Obama was a fresh President-elect) since I more than tripled my futures account (increase of 3.3x) in just 3 days by trading oil futures. Needless to say that I was seeing myself a millionaire by the end of that year (2008) while I got wiped out instead.
So…you see what an appetite I have for 24/24 futures trading 😉
Added 3,000 GDX at 20.37
First position was SLW 1000 long at 17.88 or so…cannot remember exact.
Dollar new highs!
108.37 USD/JPY…Gary, still think it is a bull market in Yen?
I only have my short SPX position.
Holding my buy stop gold @ 1226 for half position. If filled, I’ll pyramid to a full position on follow-through tomorrow.
Checking out.
Good night to you all!
Gary – wrong again- Nasdaq crashing and gold as well..
Garage Savage does not know any technical aspect of trading. He plays on guessing. I have been reading his comments and he is the worse of his own. “It is the bull market, does it matter where you buy?” Sure it does. If you are guessing, then you have no clue. He was trashing Avi or EW analysts about how dumb they were looking not getting in the October bottom and ride it to 1500$.lol
At some point, most people will lose a TON OF MONEY, following Gary’s guesses. Especially on gold. He’s clueless, and only gets lucky when its obviously trending. How many more legs down is there going to be Gary ? Gold now at 1214 and falling. Gold will then break $1200. If you bought JNUG you lost 50% of your money in 5 days. Thats just the tip of the iceberg with Gary’s calls. You have to go back and watch his videos to see how confident he was about gold rising. calling other people fools, because they will miss the rise, and go in and out at the wrong time. If you hold on as he says you will lose a LOT more money.
I just discovered this site a few months ago. I listened to a few vidoes that are current. Then went back and listened to 2013. It was the exact same confident, certain, commentary. That’s when i posted in the comments asking if he had a video explaining how this time was different??? I never received a link to such a video, but gold did start crashing almost immediately after that. Anyway, at this point, i’m thoroughly enjoying the comments section. Alex, duck, Ped. There are more, but Keep it up guys! Thanks.
Someone explain how gold can be in a bull market when GDX crash from 26 to 20 in 4 trading days. That doesn’t look like no corrective pullback. How many months will it take to recover. I think my money is gone forever. F gold and f trading I’m done
That is easy. Tons of bull markets have severe corrections.
In 2002 HUI corrected by 40% peak to trough.
Sorry to hear that Robert.
We have all been there. Just try and learn from it. Study more (and listen to gold bugs a lot less!).
Avoid this site, and you will lose a lot less.
It looks so. Had I stocked to my plan of waiting would have avoided loss
Thx ped
Robert, at least have a little patience. It bottoms here. I am in jnug 6.2. This will take GDX back to 20 MA/50MA.
USD on day 6 of a new Daily Cycle and making new highs for this IC as I have been expecting. That said, my weekend charts are showing it may be running into resistance here.
https://surfcity.co/2016/11/13/usd-intermediate-cycle/
Gold moving into its’ YCL and nearing my targeted support areas. Will support hold is the question. I would like to see the May 31st low on Gold hold and 19.60 hold on GDX for the YCL.
https://surfcity.co/2016/11/13/gold-silver-and-gdx/
My silver entry has been blown out of the water. Had to back off. Still waiting and holding my bear trades though. They are still absorbing the news on metals this morning and making gains. Yen still above the 50 so no big change there yet. Dollar went up more than expected. Looks to me like Mr Market had to kick the snot out of all those guys who went long GDX and GDXJ late on Friday. But I still think a bounce is coming very shortly.
I have been wrong before though. What a life.
To those who kept criticizing Armstrong, he is spot on. Said regardless of who won election, dollar is shooting through roof
Yep. Dollar will continue getting stronger, due to the inevitable rise in interest rates. People are choking on bonds, and selling them left and right. Biggest bond bubble ever in the history of the universe. Dollar will be getting so much stronger its going to make people puke bonds, and it’ll be a vicious unwind unlike the planet has ever seen. Gary was way wrong saying too many dollar bulls. Nope. Just the opposite. You have 40+ years of a bond bull, that had nowhere to go, but now down (yields up). That is why Trump can boast he will spend more than a $1trillion on infrastructure. Strong dollar makes everything we import, including steel and cement for roads and bridges much much cheaper. Oil will get lots cheaper. Our energy will continue to be cheapest on the planet. You might see a quick 10% correction in stocks near term, but then its the buy opportunity of a lifetime. Just follow Dr. Copper. Its going rapidly higher. People saw doom and gloom bc everyone thought Hillary would still win, and continue Obamas legacy of stupidity and corruption. Everyone thought wrong about a gold rise, and stock market crash if Trump was elected. It was the exact opposite. Gold would have skyrocketed under Hillary, and market would have crashed. Even buffet, and druckenmiller got this right. Druck unloaded ALL his gold. Smart man.
Don’t follow Dr.Copper.
It is an idiot.
http://fat-pitch.blogspot.ca/2016/11/copper-prices-and-global-economy.html
And one wrong word from Donald Trump and copper will come crashing back to Earth as Chinese speculators who are behind the biggest jump in coppers history dump it like a hot potato. There really is no fundamentals behind this recent move. It is just the usual casino effect in the speculation dens in China sending the metal to stupid highs. Careful not to get caught in the predictable downdraft.
http://www.theglobeandmail.com/globe-investor/investment-ideas/copper-explodes-above-6000-with-prices-set-for-best-week-ever/article32812793/
Problem is he always said that, it is not possible to trade on his views, they are too hedged and timing is not there at all.
alex,
do you still see 1212 as the YCL in gold? It looks as if it’s going to break any time now…
To Alex and others
Isn’t 1225 or even 1200, 1174 a little too obvious to shake people out and create a YCL?
Everyone is looking at those numbers. When is it ever that easy?
Wouldn’t sub 1100 be needed to really force everyone out and create the YCL?
Shorting the S&P/ Big payoff coming. Buying more silver.
Time to buy some miners. Trying a bit of jnug
Do you guys think GDX will go over the 50ma, or do you think that will be the cap again for lower moves? Thanks in advance.
And now platinum failed to bounce where I thought it might. Looks a bit dark right now. Hmmm. Maybe it’s going back to the bottom as I have been musing about for some days. What can you do? Nuthin, that’s what.
filled on my JNUG order at $6.38. Stop at BE
Still down massively but hopeful. This is a nice bounce in GDX. Praying for 26 or higher
Don’t freak out if it does a retest of the days lows. Its a pretty common kind of pattern Robert and could go on for a couple days. No guarantees of course. Just look at prior instances of bottoms to see what those look like and it might cheer you up to see a retest since they can signal a trend reversal higher.
It might be a bit obvious, but if you guys look at the cycle lows on Dec 16, 2015 and May 31, 2016 and walk forward the cycle, you get this time window right here. Sentiment has been blown out of the water on this down move and obviously a good deal of technical damage, but I do think that it’s a pretty low risk entry (perhaps options) in case we get another death gap lower.
Alex you think 1212 was ycl? I thought you were looking for an undercut at 1182? What made you change your mind? You don’t think this is a bounce and we will go below 1200 to run the stops and get ycl? Thanks
I don’t know about Alex but 1212 looked great earlier except since then both silver and platinum blew a fuse and dropped quite steeply putting that 50% retrace as a final low in doubt. Its play it by ear time I suppose. What else can you do?
Gary you said you would reconsider your position on the dollar if it rose above 100. Where do you see it going from here?
Nobody on the circuits can explain this sudden bond rout. Further its apparent that due to whats not being said, nobody realizes how bad this is going to get, nor how fast its going to unravel.
They are [incorrectly] speculating inflation from perceived economic ‘growth’ or wage pressures, but the problem with that theory is the money supply, and also that the economy keeps on suffering month after month of contraction. Industrials have had 9 straight months of negative ‘growth’ (rather contractions), inventories are bursting at the seams, services (ISM) is bad and trending down. People suddenly decided bonds were a bad bet ???
Bonds getting hammered while the dollar getting stronger, is the exact recipe for a total disaster. At BEST, gold goes sideways for all of 2017, but the direction will be generally down to at least 800.
If stocks hyperinflate, then we are in real big trouble, because they are mis-reading the causes of the bond wipe out. It only means a temporary run for cover, while the damage plays out. Oil heading down is indicative of a sucko economy.
The stuff you need, other than gas, could get very very very expensive, and interest rates can’t rise fast enough, or high enough to slow it down. People are going to get very very confused by all the conflicting signals. The divergence between Nazdaq and Dow is getting quite ugly.
TATER, DAVE,
The YCL was set. I am confident about it.
DAVE, there are many things to convince me about it.
Now, after US trading, I am even more …convinced about it (if it’s possible 🙂 )
Primary thing about it is USX getting to my expected target of 99.90
US dollar topped at 100.22 and is stair stepping down. You think miners will be lagging to go down or you think the bottom is in for miners? Thanks Alex I know you only have a few hours until nightfall in Romania . Cheers
Well, it looks like Mahendra ‘Tractor’ Sharma, Harry Dented, and Stanley ‘Steamer’ Drunkenmiller may have some credibility after all. If their predictions come to pass we could see a deep depression soon. I just hope they’re wrong.
dollar has to give up for gold to move. any pop up in spx is a good short
DAVE,
i am back to my computer. I am switching btw my desktop and playing with the kids 🙂
So, I personally think that also miners have bottomed.
Actually they show what a resource stock should show: LEADING THE UNDERLYING RESOURCE.
Miners are already up in psitive territory – this makes another bullish argument of the many.
KR,
Dave
PS: I do not trade miners but rarely. I use them as an additional filter to investigate my gold trades.
It’s freaking amazing that every gold miner on the planet has lost 20 percent of its market value in the past 10 days.
USDJPY @ 108.05 is the bedrock of the market: once convincingly broken down tomorrow, everything will UNLEASH:
– USX and stocks down,
– gold/miners up,
– all other commodities down,
– treasuries up.
PS: Tomorrow I will add BOTH to my long gold position and to my short SPX to full positions.
Alexandru, why would “all other commodities down” be your prognosis? I am not disagreeing with you but I am curious as to how you arrived at that conclusion? Personally, I don’t see any great demand for commodities over the next few years but that doesn’t seem to matter to those who are piling into commodity related assets.
Copper starting to roll over …. head and shoulder pattern ….
It’s safer to cover all treasury positions and try and short again from higher numbers. That said, there is no way I would go long at this point. Yields could go up very quickly.
Gary would tell you that this is the time to buy the miners! The gold bull is intact, as he has said over and over again. The dollar cycle is just stretched, as it would seem all cycles are, which are either stretched or cut short by the manipulators.
Well
I for one will publicly admit I was wrong in the dollar…
What? You admit you were wrong?
Who is this Bill imposter anyway? Where is the real Bill?
Closed for + 4% on GDX. The TLT move is giving me shivers down my spine. Still long SLW.
the most intelligent commentator on Ker LPG
seems to have gone missing.. he was mentioned
but then they didn’t include him under comments…
the guy doc is a perennial metals bear… and keeps moving up now by a year- when the gold price goes higher.. he will no doubt move up this move again…he must work for kitco…