Below is the first segment of this week's edition of Notes From the Rabbit Hole, NFTRH 393: The Fed has been trying to promote inflation. That is not the guy…
We talk a lot about USD, Yen, the 'inflation trade' and of course, silver. We set targets, parameters and risk profiles. We personally benefit once again from grinding out this…
A look at how a few markets are setting up pre-FOMC.
The charts are what they are, but we are dependent upon what the Fed may or may not put out there on Wednesday. I would put the odds of a rate hike at just this side of zero. But they are free to leave forward looking wording as is or do a little tweaking from the currently ultra dovish stance toward at least opening a discussion for rate hike expectations for June.
We talk a lot about FOMC stuff, inflation stuff and silver stuff. At 40 easy to read pages (w/ lots of graphical data backing up the themes) NFTRH 392, the…
On March 4 we reviewed the technical reasons why the gold sector was launching as opposed to blowing off. This, after articles began appearing calling the rise to that point…
Very simply, the weekly moving average that contained silver through its bear market has been broken to the upside. That is another booster of our assertion from earlier in the…
The tout is that we NFTRH+'d the energy sector months in advance of the bottom as a 'look-ahead' to a big buying opportunity. Here is the updated chart from that…
I like a party as much as the next guy, but here is a turd in the punch bowl just to make sure we are balanced and partying within bounds. The top panel is the Silver-Gold ratio (SLV-GLD) and the lower is the Commodity sector ETF.
In US pre-market silver is +2.47% and gold is +.72% at 7:00 Eastern. The silver-gold ratio closed like this yesterday, still above the daily SMA 200.
This week we abbreviated to a review of limit and/or trend change points in several markets, further discussion of inflation and what needs to be in place to call an…
Note: A reminder that I will mostly be away from the markets on Thursday and Friday. This update is an extensive review of where markets stand now. We will update the situation on Sunday with an abbreviated NFTRH 391.
Precious Metals
HUI made it to the resistance line and the projected zone of 202 to 211 off the consolidation triangle (ref. daily chart reviewed in this update last week). From the ‘bottom line’ of that update: “Watch the gold miners. A breakout (on a weekly close) here would signal a new leg to an initial target of 211.”
The Silver-Gold ratio (SGR) has been a primary indicator we have awaited for a confirmation that a phase of overt inflationary effects may get under way. This would have implications for everything from commodities to resource based economies (like many emerging markets). It is one of the ‘market-based’ inflation indicators we have discussed; a metallic “credit spread” as Bob Hoye calls it. When silver leads, price increases across many other asset classes are more likely.
The market, despite weakening corporate profits and several other headwinds, has decided it liked what it heard from the Inflator in Chief yesterday as it has scored the game Janet Yellen 2, Hawks in Drag 1 and US dollar 0. Is it a final score? I am not sure how our hawkish transvestites can be taken seriously now.
But with a market running on the black boxes of a million quants, large and small, who knows what will happen the next time some clown decides to eat a microphone and dispense dissonance into a situation that Yellen seems very clear on; as my late friend Jonathan Auerbach once famously said (it was famous to me anyway) as we prepared for the post-2008 inflation phase, “it’s inflation all the way baby!”
Today I did something I rarely do and listened to nearly the entire Yellen speech. The reason I usually don’t listen to these things is because I don’t want to get caught in a mental whipsaw if markets start reacting to the jawbone du jour. But considering that in March alone the FOMC meeting (ultra dovish) and the subsequent clown show (hawks in drag paraded out just a week later) I felt that I needed some signals from Yellen.