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Timing & trends

Peter Grandich: Blip or Warning Shot

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Posted by Peter Grandich & Company

on Thursday, 15 February 2018 06:54

best-stocks-to-buy-now-1-300x214Must read: A report from someone who shorted this market and covered it right on the bottom February 9th. That is one hell of a trade.

Not only that but Peter Grandich has been correct being short the bonds and recently stated that he is as bullish as he has been in 34 years on Gold - Robert Zurrer

A Brief Look At The Markets by Peter Grandich

 Stock Market – I had noted in my February 10th observation, that I had covered my short position on the morning of the 9th. I stated,  “A significant reason for taking profits in my short positions was the personal technical work that I do, suggested the short-term selling was exhausted. Sure enough, the DJIA rallied 700 points from when I covered. I believe we can see the market rally back hard next week, as the first sell-offs in Parabolic Arc formations are almost always assumed to be buying opportunities.”
As I make this blog post, morning stock index futures indicate another 300 point rise to the already-huge rally since covering my shorts. I believe this qualifies as “rallying back hard”. The question is, was the previous sell-off just a blip or a true warning shot? If a picture is worth a thousand words, this photo should explain my answer:
IMGP8278-jrnl-1-300x199

  •  Bonds – While the stock market thinks it was just a momentary blip, the bond market has clearly viewed a major sea change and is acting accordingly. The POTUS has “joined the swamp” in insanely out-of-control spending and debt crisis, that just may make the can unable to be kicked down the road anymore. The warning shot will become this, if the 10-year T-Bond gets above (and stays) 3%


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Timing & trends

Key Change That Nobody Talks About

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Posted by Arkadiusz Sieron, Ph.D.

on Wednesday, 14 February 2018 06:22

Last week, everyone focused on the stock market sell-off. Reasonably enough, given the pace of the declines. But the analysts failed to pay enough attention to the very important shift. That change may be more important than Trump’s victory in the presidential election. Will the critical switch make gold shine – or dull?

Three Important Legacies of Yellen’s Fed Tenure

A crucial change is behind us. Powell is the new boss. Yellen is out. For better or worse, she doesn’t serve as the Fed Chair any longer. Although economists rated Yellen’s tenure very highly, President Trump didn’t renominate her for the position. Rightly or not? We don’t care. Let journalists debate endlessly – we will analyze the crucial Yellen’s imprints on the Fed, which could affect the gold market in the future.

First, Yellen focused mostly on the labor market, not without some successes. We don’t attribute it solely to her, but the unemployment rate fell from 6.7 to 4.1 percent under her tenure. As a reminder, the Fed has a dual mandate: maximum employment and stable prices. Although many Fed officials used to worry about high inflation, she was different. Yellen didn’t fear the uptick in inflation as long as there was a slack in the labor market. She, thus, believed that ultra low interest rates could and should stay near zero for far longer than previously thought to combat unemployment. Yellen hiked them not earlier than in December 2015. Since then, she gradually raised them to the range of 1.25 percent to 1.5 percent, which is still very low. The gradual tightening was positive for gold, which would have likely struggled more, had monetary policy been more aggressive. If Jerome Powell continues this cautious policy, gold may shine, despite rising interest rates.

Second, Yellen managed to start the unwinding of the Fed’s massive balance sheet, without triggering stock market turmoil. After unconventional actions of Bernanke, she had to get back to normal monetary policy, but not too fast. She definitely succeeded. If anything, the Fed is behind the curve. This is why gold wasn’t strongly hit by the Fed’s tightening. The U.S. central bank raised interest rates a few times, but the financial conditions remained easy.

Third, Yellen mastered communication with the public. She held quarterly news conferences and smoothly telegraphed the Fed’s moves well in advance. Thanks to well-planned expectations guidance, Yellen – contrary to Bernanke who triggered a taper tantrum by his unexpected remarks in 2013 – avoided any major stumbles. The clear communication transformed gold’s reaction function. The yellow metal now reacts more to the changes in the rate hike expectations than to real monetary policy decisions. Sell the rumor, buy the fact – as one can see in the chart below.

as1

Chart 1: Gold prices under Yellen’s Fed tenure

Jerome Powell – Great Continuator or Game Changer?



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Timing & trends

US Stock Market, Precious Metals & the Macro Backdrop

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Posted by Gary Tanashian - NFTRH & BiiWii

on Tuesday, 13 February 2018 06:27

US Stock Market

We will update global markets as well as the macro situation in NFTRH 486, but for this article I’d like to focus on the US stock market.

Let’s cut to the chase; the markets have finally fallen in line for those of us who manage markets, as opposed to dollar cost average into them through a money manager and then go about life, blissfully unaware. Much like during the 2015-2016 period, when the media were all but demanding investors go one way when the right way was the opposite (for example, we got bullish during the Brexit mini hysteria because sentiment, macro indicators and charts told us to) during the market top (that wasn’t).

But today the bliss is wearing off as the average person did not need to wait for his monthly statement to see that something went wrong with the up-melting market that was printing him money every month. Here is a look at the Google Trend for the search term “stock market crash”. Per Google’s computation method, the reading cannot go higher than 100.

stockmarketcrash

It’s a good bet that much of the new money, the ‘all-in and ready to make coin’ retail money summoned by the now-fiscally unrestrained economy and wooed by Donald Trump’s relentless stock cheer leading on Twitter, was pounding away at keyboards searching for what went wrong as well. Our handy graphic (courtesy of Sentimentrader) once again makes the point of who exactly got sucked in and likely, flushed.



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Timing & trends

Free NFTRH 486 (Premium): Market's Going Forward

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Posted by NfTRH & BiiWii

on Sunday, 11 February 2018 16:31

Let’s not go into great detail about sentiment and internals indicators trying to ascertain something already fully in play. The stock market has finally cracked, making an A-B-C correction in micro time per a 30 minute chart. Sentiment is in play from the negative side, volatility is now intense and while we will gauge the macro regularly going forward, we also are in the realm of straight TA. So #486 is going to be a breeze for us this weekend as we get down mainly to more TA and less theory across various markets.

Screen Shot 2018-02-11 at 2.29.27 PM

Table of Contents



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Timing & trends

Bob Hoye: Investment Fads

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Posted by Bob Hoye - Institutional Advisors

on Friday, 09 February 2018 15:44

Screen Shot 2018-02-09 at 3.52.07 PM

Screen Shot 2018-02-09 at 3.50.03 PM

Investment Fads

We have been fascinated by the chart on the publically-traded shares of the Swiss National Bank. Yes, it is the central bank, it trades, it zooms and it is long the latest fad in investing. Fiduciary responsibility being a constriction has become a neglected concept.

Their reserves have been committed to equities and the chart records the euphoria of the day.

Screen Shot 2018-02-09 at 3.43.22 PM

As one would expect the biggest positions include the fad stocks of today.



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