Silver and Miners have remained above their November lows as gold prices continue to edge lower. This divergence could be a bullish sign if it continues to carry. If it doesn’t hold and prices break below the November lows, then we could see them paly catch-up to gold during a sharp move lower. Prices are consolidating, and without a trending move, it’s difficult to make money. Just when prices are on the verge of breaking out, they reverse and head the opposite direction. We could see this continue until the FED decision next week. Hot money has moved away from the gold sector and jumped into stocks. The dollar is correcting into a cycle...
The Australian Dollar is under pressure early following the shock release of the third quarter GDP figures which came in well below market forecasts at 0.5% q/q on a seasonally adjusted basis. The annual GDP growth figure was also impacted, slipping to 1.8% y/y. The negative results had an immediate impact on the Australian Dollar which declined relatively sharply and is now trading around the 0.7428 mark but questions remain as to whether the vulnerable Aussie Economy is now flirting with an impending recession. It really isn’t a significant surprise that Australia has experienced a sharply negative quarter of economic growth given the rec...
Last week, Trump made a deal with Carrier (and its parent, United Technologies) to keep 800 jobs in Indiana rather than sending them to Mexico. Indiana agreed to give Carrier $7 million in tax breaks, and Trump assured United Technologies (UTX) that its $6 billion a year in military contracts would be secure. Then Tuesday morning Trump attacked aerospace giant Boeing (BA) – tweeting: “Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!” Later he added “We want Boeing to make a lot of money but not that much money.” Boeing shares immediately took a ...
After the market has a big move like the one the election just created, the next step is for it to be tested with a correction or pause. This test begins to reveal which sectors or stocks or asset classes will be the next winners or losers. The test of the Trump rally began last Monday, Nov. 28th, and in yesterday’s commentary I reviewed one way to use the Inside Day pattern to benchmark the progress of a market reversal. Today the market followed through on that reversal, and we learned that the Trump rally market rotation remains in full force. The new market leaders demonstrated their strength again. It’s often hard to believe that the...
US factory orders rose 2.7% exactly matching the Econoday Consensus. As with the trade deficit, economists got this number correct because of the advance report. Thus, this rise will not impact GDP estimates. Diving into the Census Bureau report on Manufacturers’ Shipments, Inventories, and Orders, we see new orders for manufactured goods in October increased $12.5 billion or 2.7 percent to $469.4 billion. The details are not all that inspiring. Manufacturers’ Shipments and New Orders Details Reveal Weakness Orders are up 2.7% but core capital goods orders, a sign of future expansion are only up 0.2%. For the year, core capital goods orde...
We covered extensively the copper price and copper miners in October, but decided to give the copper market a little bit of time to choose a direction. Right now, copper is at a point where it will start trending pretty soon. We don’t know which direction it will go, but it will become either a huge breakout or a painful breakdown. The reason we are convinced that this is the moment of truth is based on the chart pattern of the copper price. Watch the following chart, specifically the purple circle. A couple of observations: The copper price rallied strongly in October and November, but stalled right resistance of a long term bearish tr...
The Russell 2000 pushes again into the 10% zone of historic high prices (1,388 would be enough for the 5% zone last seen in February 2011). Back in 2011 the index rallied for another couple of months before it lost 30% from its high. The next few weeks would be a good opportunity to take some money off the table to use on the next swing low. On the Daily chart the ‘sell’ trigger in MACD reversed with a new ‘buy’ trigger. Other indices gained, but none are as overvalued as the Russell 2000. The S&P is close to breaking to new highs. Although Tech indices still struggle to regain lost ground. Santa looks like he will...
We’re moving very well now after a week of consolidation and I’m heavy into stocks since Monday. Steel stocks continue to move well along with banks and some pharma stocks, while precious metals continue to try to build a base. SPY is ready to breakout again with 222 now the breakout/buy level. Perfect timing for a nice run into Christmas as we break into new all-time highs with the continuation of the bull market. New highs means nobody anywhere has a loss so people feel great and buy, buy, BUY! Have a super evening. Warren...
Next week the Fed will make a decision on whether to hike rates or keep them steady. Since the last time I wrote about this topic, the chance of a rate hike has fallen from 100% to 92.7%. The idea that the chance of a rate hike is 100% was over the top given the Fed has not explicitly guaranteed a hike. This lowering of chances has brought them to a more rational amount. I still expect a rate hike in December after we’ve seen some moderate pickups in data and heard some hawkish language from the Fed. Objectively, the economy has been stronger at other parts in this recovery, so when I say the Fed will raise rates in December, I’m not defe...
With OPEC behind us, perhaps the market’s focus will swing back to fundamentals (as opposed to headlines) and following last week’s huge build across products, API reported the second week in a row of crude inventory draws (bigger than the expected 1.37mm drop). However, Gasoline and Distillates saw major builds but Cushing inventories rose over 4mm barrels – the most since 2008. WTI seemed to focus on the crude draw at first… API Crude -2.21mm (-1.37mm exp) Cushing +4.01mm (+2.87mm exp) Gasoline +828k (+1.59mm exp) Distillates +4.08mm(+1.24mm exp) A second week of bigger than expected draws in crude inventories b...