Today Jeremy Stein (Fed member) lobbed his .02 into the media with talk about a ‘mechanical taper’ tied to economic data. He joins James Bullard who was out the very day after FOMC’s non-Taper talking about a possible October taper.
Regardless of what happens in the short term, I believe none of this ‘taper’ stuff matters in the longer term. But as long as markets respond to every utterance it is a difficult situation to manage; so over manage we shall not. With the debt ceiling debate revving up, it is likely to get even more intense in the near term.
I can put up public posts complaining or making fun about what is going on in the media, but I am not going to waste your time with it. So if there are fewer update posts realize that there is nothing new to say that may not be tainted by the ongoing perceptions management. If anything beyond the noise that seems important comes up, we’ll update.
The update the other day (24th) noted a point at which I was taking a stab at the precious metals. That is ongoing, but I am intolerant of anything (using HUI as a reference) that drops below the shaded zone by this 5 minute chart. In other words, my personal risk limit is around 229 off of the would-be ‘take a poke’ buy area in the mid-upper 220’s.
The precious metals have not proven anything bullish technically (generally, they need to get above the 50 day moving averages to do so) and the US stock market has not proven anything bearish, technically. My personal stance (and again I remind you that we all do and should have different orientations; mine right now is to preserve the still-intact 2/3 of gains off the June bottom).
We are in a bigger picture environment where public confidence should start falling with regard to policy makers before a bullish case establishes itself in the precious metals. I believe they are in the media so robustly to keep the masses (which in the markets, are not the brightest bulbs) believing that they are in control of events. Within this I continue to trade the broad markets, especially US tech, emerging and Asia.
But the bigger picture is still this… either they have fixed the economy for real and the gold-CCI ratio, gold-SPX and other ratios turn down and break the recent bottoms (breaking NFTRH’s big picture theme of economic contraction) or much more likely in my opinion, confidence will wane as the policy to date is eventually exposed as not only unhelpful, but damaging.
I didn’t mean for this update to get so talky, but one thing tends to lead to another.