200 DMA

200 DMA

Ganging Up On Gold

Gold remains the asset Wall Street loves to hate. It is currently under pressure due to the recent increase in rate hike odds and there was definitely a need for stale long positions to be cleared out. When we see the mainstream gang up on gold so quickly though, we tend doubt that the bears will be correct. Of course we have no crystal ball either, but we remain convinced that the monetary experiments of recent years will end quite badly.

Global Stocks Unchanged; US Futures Rise Above 2,100 As Traders Celebrate Memorial Day

With the US closed for Memorial Day and UK markets also offline, overnight volumes have been weaker than normal on little newsflow. The main story remains the stronger USD which not only led to the lowest Yuan fixing since February 2011 but pushed the USDJPY as high as 111.50 overnight before paring gains. Europe’s Stoxx 600 is unchanged on poor volume, after earlier rising above the 200 DMA for the first time in 2016. US equity futures were 0.2%, or 4 points higher, currently resting just above 2,101 with the last trading day of May tomorrow expected to push the cash market over 2,100 as well.

Credit Suisse Is Now A Seller As S&P Hits "Bull Target" Levels, But With A Big Caveat

S&P 500 (June) now up at our 2070/80 bull target - the measured objective from the base and price resistance.  With potential trend resistance not far above at 2090, we continue to look for sellers here. Russell 2000 stays trapped in its near-term range...  Concern, as always, is that market positioning remains short, and if we start taking out resistance levels, we could see a big short stop out...

Groundhog Day Trading: Stocks Slide As Oil Plunge Returns; BP Suffers Biggest Loss On Record

It certainly does feel like groundhog day today because while last week's near record oil surge is long forgotten, and one can debate the impact the result of last night's Iowa primary which saw Trump disappoint to an ascendant Ted Cruz while Hillary and Bernie were practically tied, one thing is certain: today's continued decline in crude, which has seen Brent and WTI both tumble by over 3% has once again pushed global stocks and US equity futures lower, offsetting the euphoria from last night's earnings beat by Google which made Alphabet the largest company in the world by market cap.

Gold And Gold Stocks - A Meaningful Reversal?

The recent reversal is definitely positive. Both false breakouts and false breakdowns often turn out to be reliable trend change signals. An additional bonus in this case was that the initial breakdown has induced widespread capitulation. Contrary to the immediately preceding rally attempt, the current one has been a “scared rally” so far. The mainstream financial press is still busy penning obituaries on gold, which is generally a good sign as well.

Futures Rebound On Hope Today's "Most Important Ever" Jobs Number Will Not "Draghi" The Market

Optimism in US equity futures appears to have returned, and as of this moment US equity futures are higher by 9 points to 2060 as the attention shifts to what, according to BofA, is truly the most important ever. It is unclear just how the algos would take a second consecutive major disappointment in a row: should today's NFP print be well below the 200,000 consensus, December rate hike odd will tumble and the EUR will surge even more after declining modestly from overnight highs just below 1.10, leading to even more losses in European equities and spilling over to the US. 

Global Markets Surge Overnight On Fed Minutes Optimism; ECB Minutes Set To Keep Rally Going

While it is still unclear just why the FOMC Minutes which are said to have made a December liftoff "more likely" unleashed a dramatic market rally, one which sent both stocks and TSYs higher, the sentiment continued overnight, with both Asian stocks surging on the US momentum, as well as Europe, where the DAX gapped solidly above the 200 DMA as most European shares advanced, led by resources, travel stocks. U.S. futures continue their ramp higher, and at last check were another 8 points, or 0.4%, in the green.  But if the Fed Minutes were enough to unleash the latest leg in this rally, than the ECB's own minutes due also today, should send futures back over 2100 without much difficult, regardless of their actual content.

US Equities' "Impressive Rebound" Is Hollow Inside

If one looks at the NDX alone, one would have to conclude that the bull market is perfectly intact. The same is true of selected sub-sectors, but more and more sectors or stocks within sectors are waving good-bye to the rally. Even NDX and Nasdaq Composite have begun to diverge of late, underscoring the extreme concentration in big cap names. Naturally, divergences can be “repaired”, and internals can always improve. The reality is however that we have been able to observe weakening internals and negative divergences for a very long time by now, and they sure haven’t improved so far. In terms of probabilities, history suggests that it is more likely that the big caps will eventually succumb as well.

Futures Halt Three-Day Rally, Drop On Energy Weakness, IBM Earnings

After yesterday's closing ramp "prudently" just ahead of an abysmal IBM earnings report with the lowest revenues since 2002, and the latest rally in capital markets which sent European stocks to their highest level since August on the back of a barrage of global bad data which has unleashed the Pavlovian liquidity dogs screaming for moar central bank bailouts, this morning has seen a modest decline in the Stoxx 600 driven by energy names, while S&P500 futures are set to open lower on IBM's disappointment at least until the latest massive BOJ USDJPY buying spree sends the pair to 120 and the S&P solidly in the green. The biggest political event overnight was the Canadian election, where Trudeau's liberals swept PM Harper from power, capping the biggest political comeback in the country's history; the Canadian dollar is largely unchanged after initially weakening then rising.

QE "Barbell" Returns: Biggest Junk Bonds Inflow In 8 Months; Most Gold Buying In 7 Weeks

The cross asset whiplash events, coming at a furious pace unseen since 2009, continue, and while the late September surge driven by a historic short squeeze served to massively boost equities, other risk assets were also impacted. Case in point: junk bonds, which after becoming one of the most unloved asset classes in 2015 due to their exposure to energy assets, took advantage of the latest vicious squeeze in crude, and notched their biggest inflow in 8 months, even as gold just saw its biggest "QE-on" buying in the past 7 weeks.

Gold & Gold Stocks - How To Recognize An Emerging Bull Market

We can however state with confidence that the bubble will eventually burst and that the greatest monetary policy experiment of the post WW2 era will fail – in all likelihood quite spectacularly. So we have every reason to remain long term bullish on gold and gold-related investments. Moreover, by looking closely at past lows of significance we have hopefully been able to provide a bit of a road map in case the recent low does indeed represent a major pivot point.

Dennis Gartman Turns Bearish And Futures Hit Overnight Highs

"when this sort of thing happens following bullish moves it has almost always signaled the end of the bull-run. Couple this unanimity of price movement with the “reversals” noted above and we have a situation that  concerns us greatly. Indeed it concerns us enough to exit our long positions entirely upon receipt of this commentaryCertainly we do not like switching positions this quickly, for we appear to be flippant and foolhardy, but history tells us that we have no choice."

Futures Continue Slide On Latest Chinese Economic Disappointments, Gold Hammered

When China was closed for one week at the end of September, something which helped catalyze the biggest weekly surge in US stocks in years, out of sight meant out of mind, and many (mostly algos) were hoping that China's problems would miraculously just go away. Alas after yesterday's latest trade data disappointment, it was once again China which confirmed that nothing is getting better with its economy in fact quite the contrary, and one quick look at the chart of wholesale, or factory-gate deflation, below shows that China is rapidly collapsing to a level last seen in 2009 because Chinese PPI plunged by 5.9% Y/Y, its 43rd consecutive drop - a swoon which is almost as bad as Caterpillar retail sales data.

Dazed And Confused: Futures Tumble Below 200 DMA, Oil Near $40, Soaring Treasurys Signal Deflationary Deluge

It is unclear what precipitated it (some blamed China concerns, fears of rate hikes, commodity weakness, technical picture deterioration although  it's all just goalseeking guesswork) but overnight S&P futures followed yesterday's unexpected slide following what were explicitly dovish Fed minutes, and took another sharp leg lower down by almost 20 points, set to open below the 200 DMA again, as the dazed and confused investing world reacts to what both the Treasury and Oil market signal is a deflationary deluge. Indeed, oil is about to trade under $40 while the 10Y Treasury was last seen trading at 2.07%. Incidentally, the last time oil was here in March of 2009, the Fed was about to unleash QE 1. This time, so called experts are debating if the Fed will hike rates in one month or three.