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Stocks & Gold Soar As Macro Slumps
With US Macro slumping to 3-month lows, is it any surprise that markets everywhere traded with a decidedly Taper-off confidence this week. USD was sold (-0.6% on the week) though commodity currencies (CAD/AUD) were sold also. Stock 'traders' bought every dip, lifting the Russell 2000 for the 8th straight week (first time since 2003). Gold completed its best 2-weeks (+6.4%) in 23 months. Treasuries have been very quiet since Tuesday, ending the week 5-8bps lower in yield. Growth hope faded as Copper (-1%) and Oil (-3%) fell on the week and earnings overall tumbled. Of course, it wouldn't be Friday if we didn't melt-up into the close (helped by a VIX slammer) and sure enough the S&P tagged its all-time highs as panic buying ensued with just minutes left in the week. Headlines will crow of new all-time-highs for the S&P (but credit remains a non-believer, not buying the rip).
US Macro has collapsed at its fastest pace in 8 months over the last 3 weeks... (notice the continual lower highs of US Macro since the recovery...)
and as we have now been indoctrinated into the "bad news is good news" mantra, that means buy stocks... (with Trannies leading the way off the lows...)
Discretionary, Industrials, and Homebuilders lead the pack off the lows across sectors...
And on the basis that the Fed wil never step away, Gold has seen its best 2 weeks in 23 months...
and gold and silver recoupled perfectly in the week as Copper and Oil (growth?) slide...
Treasuries have been very dull as stocks soared the last 3 days...
and despite notable dispersion (CAD/AUD weakness - global growth?) the USD has sunk on the back of more EUR buying...
Of course EURJPY was in charge again...
and of course the ubiquitous VIX-slam, ES melt-up into the Friday close...
and credit markets remain the great non-believers...
and this was NOT a short squeeze - as "most shorted" names sold off very rewardingly for the shorts... (doubling the markt's move to the downside)...
This is the first time in.. well as long as we can remember... that the market rallied and "most shorted" names did not get squeezed... smalls awfully like a euphoria stage to us...
Charts: Bloomberg
Bonus Chart: (via Phil Capone from BNP): On a weekly basis going back to 2010 the SPX and the Bloomberg Weekly Economic Index have been 86% correlated... until now...
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Bang Dat Close!!!
While I believe the Austrians are correct, I do not think they fully appreciate what Keynes said: "The market can stay irrational longer than you can stay solvent". I am starting to doubt the theory that there will be another market crash since the market IS the government and the market IS the banks.
Gold Miners Index (GDX) looks boxed into a corner.
http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=0&mn=3&dy=0&id=p47229332315
Didn't you say GDX was at resistance yesterday? And you are saying again today? I see the 50 but has GDX ever used the 50 as s/r before?
Can you show me the resistance you were discussing yesterday?
Just stay away from the GDX...
Does anyone know how "US Macro" is calculated?
Tegrat,
Just expand the GDX chart like this and you will see the price action at the 50. Historically (until just recently) it has shyed away from the 50 dma. Yesterday it came close to the 50 dma, and today it pierced it, closing right on the line. It is possible that on Monday it will shoot up and over, but historically that is unlikely. So that's why I issued a caution.
http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=1&mn=3&dy=0&id=p48580708739
Makes no difference my friend. With gold and silver stored away (and NO leverage) you can stay solvent far longer than the markets can remain irrational.
"Beware the fury of a patient man"
We are waiting. We do not forgive. We do not forget.
<Gold lows are in
<One more smash
More smashes likely. I think gold remains subdued through the petrodollar transition period. This will be more of a "flip the switch" revaluation that won't come with advance public warning.
Too true. As long as gold is seen as a proxy/valuation of the dollar it will not be allowed to rise.
It cannot be allowed to rise. For now, a worlds economy relys upon the fantasy of the dollars worth.
Ben Yellen! Precious To da moon.
Gold sure is soaring right now (+$10)
Call me after the collapse and then we can call it 'soaring'
Isn't Gold only up 0.38% ($5.10) at the time of this posting? If so, how is that called soaring?
It's possible that I'm missing something though.
No, no, Tyler meant 'boring'.
Gold&silver are boring. That will change. The day will come pm's are being discussed so much that even the Shoeshineboy gets tired of it.
I think that this article was summarizing the week's activity. 2-3% increase for a major asset class is, though perhaps not soaring, certainly very solid movement. The technicals are cleaning up very nicely for the metals and the attempted Friday smash was well bought and reversed today. I think that a trend is developing. We'll see.
All tangible assets priced in USD will rise as more printing occurs. Companies and their stocks will go up too. Invest in something safe without counter-party risk and enjoy the long ride up as the fiat currencies coast downhill.
Early this week the markets decided Yellen is in..so then became a turning point for many tangibles. Inflation will also go up, and interest rates.
Completely fucked up societies, rigged everythings, paper giveaway nice ride profits on pm's. I know, ZH has to cover both worlds. For now.
closing over $1350 would be nice with the next leg up being in the $1420's. I was going to wait to go to the LCS and make a nice size purchase before Thanksgiving. I'm bumpng it up a few weeks because I think we've seen the lows.
Anytime it's in the bottom channel on the DOW it's a buy. Seems like an infinite upward trend. Doesn't matter what happens.
Just buy the dips.
The worse the news, the more QE is expected, the higher the market goes.
This is so easy a monkey can do this.
Now that was an impressive little ramp-fest in equities for the final hour of trading.
On Monday, the HFT-bots will know the joys of once again BTFATH.
Oh, God bless America! We're the Greatest Country in the WorldTM!
Gold will be "soaring" when it gets above $1800-1900 again. Until then, keep your head down and adding to your stack.
I'm 97% invested in a diversified portfolio with the other 3% sitting in a leveraged VIX ETF.
Bring on the crash. Or the rally. It's all good.
Look, it's the Hindenburg Omen followed by Ben's helicopter!
Ha, the market is a discounting mechanism, so it's discounting that the macro will get better since it has to get better, right?
If it's gonna get better, why worry about getting worse, just skip that part, unpleasant just to think about it.
John Q retail is going to get the fire hose soon and it will not be pretty.
He will be wishing that all he had to deal with was a fat cop with pepper spray ...
Metaphorically speaking, of course.
Print more motherfuckers
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My father predicted that one day there would be more deadbeats on the guberment teat than folks working to pay for it. He died in the 80's but he understood the fed's fiat game perfectly and taught me well. SAD DAY FOR OUR COUNTRY.
im starting to think this "Macro" indicator is bullshit
You must be in the early stages, soon you will realize its "all" bullshit
Yes, it is as much BS as the idea that CommieCare will give you any healthcare.
CommieCare usually means a bullet in the back of the head outside nsa hq.
Dont worry AMZN up $31 on the fact that they will lose money this year. Every sell-side analist jumping over themselves saying profits are better, (what profits??) but cutting estimates from now to 2015. Why ever let the truth get in the way . These are the times we live in truth is un American. This puts the greed I saw in the 80's and late 90's to shame.
I give GDX a 70% chance of pulling back a few bucks next week and a 30% chance of busting through resistance. I wanted to gamble and load up but stayed my hand as I just don't want it on my mind this w/e.
According to Macquarie Research:
https://app.box.com/s/pzbyrvapbxjs27ql0lnw
Banking on Unconventional Monetary Policy
Event
- We analyse the implications of maintaining current unconventional monetary policy (UMP) mechanisms in the major developed economies for some time into 2014.
Impact
- Financial markets are now expecting the US Federal Reserve to maintain its current program of QE bond purchases until at least March 2014. At the same time, several other major central banks have recently signalled an intention to maintain highly accommodative monetary policy settings for the foreseeable future. Consequently, the medium-term outlook for global liquidity has shifted and should be seen as supporting the strengthening cyclical upturn in the developed economies.
Outlook
- Recent actions and comments from the major central banks indicate that unconventional monetary policy (UMP) can be expected to remain a key feature of the global landscape well into 2014. This reflects a combination of factors, many of which have both domestic and global economic dimensions.
- Notwithstanding concerns in some quarters of financial markets that UMP is an unsustainable policy approach, central banks appear to assess the near-term risks of macroeconomic instability as being better managed through the protracted use of extraordinary policy measures.
- Moreover, the complicated nature of exit strategies for the major central banks, including the likelihood of further unsettling capital outflows from some emerging market economies, is leading to an acceptance that UMP will be sustained for longer than originally anticipated.
- We noted previously that the market consensus in respect to the US Fed’s commencement of a wind back in its quantitative easing (QE) asset purchase program has shifted into 2014. Indeed, market expectations have now aligned with our base case of Fed QE tapering commencing at the 18-19 March 2014 FOMC meeting – although the risks are still skewed to an even later date.
- Given the ‘general equilibrium’ spill-over effects of any shift in the stance of US monetary policy, it is not surprising that most of the other major central banks have acquiesced with the financial markets expectation for a protracted deployment of UMP.
- In our view, there are three key macro implications for global investment markets in the extended use of UMP, namely:
- ongoing elevation of investor risk appetite and a focus on ‘capital growth’ driven assets;
- near-term abatement of ‘capital account’ pressures in several key emerging market economies; and
- persistent concerns about competitive exchange rate devaluations and asset price bubbles.
PRC should issue a new currency: Au coins 1mg and up.
Actual real Au in the coins!
"Say, buddy, have any gas?"
"Do you have the new PRC coins? Then yes."
Gold is in Breakout now:
Gold Spikes to $1349.00 - Is Initial Claims Report Leaked Again?
Gold has spiked to $1349 well before 8.30 am when Initial Claims Report is scheduled to be released. Is the data leaked again?Update 8.30 am:
All jobs' data is WORSE than expected again. How can we get on that "Early Bird" email list? It is just getting totally ridiculous, is there ANY rule of law left in the U.S.?http://sufiy.blogspot.co.uk/2013/10/gold-spikes-to-134900-is-initial-claims.html#
September Nonfarm Payrolls Huge Miss - Gold Spikes Up, Data Leaked Again GLD, MUX, TNR.v, GDX
"We have September Nonfarm Payrolls with the Huge Miss and Gold Spikes Up immediately. Data was leaked yearly again with Gold printing:
+$5 at 8.28 and +$18 at 8.33 "Cowboys" shorting the Gold market, according to Eric Sprott, must be in a serious trouble now. The yearly trade on October 15th has amounted to 640 million and Gold was Sold at 1270 - 1250 levels. Now with CFTC out of hibernation can we expect at least some kind of investigation? There are more and more calls about the US Dollar loosing its Reserve Currency of Choice status now. Default was avoided, but the damage is done.
All FIAT currencies are based on trust. The geopolitical shift is making its way to mass media and we are witnessing the groundbreaking developments in the Gold market. Nobody can manipulate it all the time and China will be busy writing "Thank You Cards" to the FED and related Cartel members at LBMA and BIS, buying all the physical Gold available for Delivery at this levels. We can forget about the Taper until mid 2014 now and Janet Yellen will be following the new FED's playbook written by Michael Woodford. Peter Schiff has dissected for this situation very well."
I still stick to my 18xx for Snp into November.
Nov 7th-15th +/- 1-2 weeks I expect most markets (yes: also gold) to paint major turning points. Some smoothly rolling over, others with an exhaustion move.
Thereafter sooner or later MAJOR corrections into at least later part of Q1/2014 if not even into Q2/2014 or some even Q3/2014.
Yes - that means we are now (Oct 25th) VERY close to a deflationary period of several months.
Time frame around April 22nd 2014 should be quite "dense". Won't be surprised to see some "events" taking place or peaking around that time frame. But maybe also a bit (a month or so) earlier or later. Could be floods, earthquakes, volcanos, but also unrest, revolution or even war(s) - anyway something very unpleasent will be on the way into the latter part of 2014/Q1. And me thinks at the center of that storm is America.
Aftermath could be a final hyperinflationary period like we had it already in the seventies. In that context also expecting a low of the metals around June-August. Odds are favoring August right now, but it is too early still to have trust in that odds. Also I won't be surprised to see a similar correction like in the seventies - that is around 50% from the previous all time high - so 9xx.
Gold in Dollar might perform different (= worse) from gold in other currencies. As the dollar is expected to gain in value while the rest will decline.
Lot's of wild guesses again. But we will see how much of them turn of to be wild guesses - or valid projections.
In any way DYOD as above expectations could turn out dead wrong.