Before the update I want to make a correction. A subscriber kindly corrected my error in reporting Zoom under the symbol ZOOM, when the correct one, per the report segment in question should have been ZM. As you can see, it, while not hysterical like the other chart shown, is yet another bullish stock from last week. I’ll correct the report and upload a new one to the archive shortly. It’s been corrected and uploaded to the archive.
Fed will make up to $4 trillion in loans to businesses to rescue the U.S. economy, Mnuchin says
I purposely do not look at the news while writing the report on the weekend because I don’t want that influence in there. The details of the debt rescue package are emerging and they are massive, desperate and sadly, necessary. We have a mix of monetary (Fed) and fiscal (government) intervention and it is aimed a curbing and reversing recent trends. Did the little glimmer of a pullback in the gold/silver ratio that we noted in today’s report factor this news? The news was in play in a more general way on Friday.
I don’t think the size and scope of the package is going to be a big surprise but it could goose a market that is looking for relief. SPX slipped below its 38% Fib target and that opened up its better target of 50% and the 2100 +/- (refined to 2030) zone. Maybe a bounce and later fade to that area could be the play. Maybe spirits will reverse and the depressive selling will resume again promptly.
Frankly, I’d like to get 2100 +/- over with sooner rather than having it hanging out there but policy-armed manipulators are always in the mix, trying their best to alter what the market wants to do in the short-term.
As for gold and silver, their technicals and CoT have argued for lower prices and here too it would be policy vs. natural markets. The pullback in the gold/silver ratio may be the start or it may just be a pullback within an ongoing bearish market situation. We’ll just have to take it day to day, week to week.
Regardless of what this policy action does in the short-term, it does not change the fact that we are looking for a top in the deflation scare (watch gold/silver & USD) and bottom in many macro markets, likely led by silver’s ratio to gold. I don’t think that a policy action would just stop and reverse the process for good in real time. But they are introducing volatility and that goes in both directions.
Let’s see how the coming days and weeks unfold.
