On the fundamental front this week, it’s going to be a tough one.
The week starts out seemingly normal on the calendar:
But what is not shown on the economic events is the President’s first State Of The Union Address which is on Tuesday, January 30th at 9:00 p.m. EST.
Recall that last week the president moved markets (especially the dollar and the metals) when he talked up the dollar and talked down Stevie’s “weak dollar” comments.
When the president addresses the nation of Tuesday night, that will be after-hours trading, and the market will be fairly thin, so if President Trump says some “dollar bullish” things, prepare for a paper bombing of the gold & silver markets.
It is hard to imagine that anything he says is “dollar bullish”, such as engaging in a trade war but wanting a strong dollar all the same, cause that dog don’t hunt, but that is the spin the MSM and especially the mainstream financial media will put on the speech if necessary.
For now, the cartel is riding the “everything is awesome” meme, and they will do so until they can make more money on the collapse. For now, however, the market’s are raking in plenty of fiat so they are content to keep it going as is.
A working theory of mine is that between the C.I.A. controlled media abroad, colluding central banks around the globe, and a dumbed-down population in general, all of this praise for such a good U.S. economy is not directed inward, but outward, so as to maintain the illusion of U.S. dominance in the markets.
While the dollar amount for total size of the economy and economic activity may show dominance for the time being, on the fundamental front, we’re no where near the top of the pack.
Speaking of fundamentals, there is no let-up on Wednesday with the January FOMC:
Better than 95% of the market, according to CME Group, is expecting the Fed to hold on interest rates.
Additionally, there is no press conference on Wednesday, so basically the Fed gets a free pass as this is Janet Yellen’s last official FOMC meeting as Fed Chair.
The next FOMC in March will be Powell’s first as Fed Chair, and that one is showing over a 75% chance of a rate hike, but for now, the Fed is able to convey whatever message they want. Between the State Of The Union Address and Janet surely getting praise in the form of a mainstream financial press “lifetime achievement” love fest, not many eyes will be directed towards the Fed’s inaction anyway. Eyes will be on the bond market, yes, but on the Fed, they’ll just get their free pass.
We are not off the hook as we progress through the end of the week as Friday is the BLS Jobs Report.
Every so often the
liars statisticians will commit a policy error that the markets don’t like, and the metals will spike in price, but generally speaking, non-farm payrolls is a day to smash.
Hence the need to dig in, harden defenses and prepare for the cartel bombing runs.
So let’s see what ground we need to stand in the metals this week.
In silver, we can see support at $17.20 needs to hold:
Not that I’m counting on a break-out, to the contrary, but interestingly, if silver did break-out this week to close around $17,75, that will have painted the chart very bullishly with three higher-lows and two higher-highs.
I’m not counting on it because the cartel will most certainly defend against that from happening.
In gold, we can see that we need to stand our ground at $1340:
The 50-day is rising nicely, and if we can simply maintain here, the technicals can naturally return to neutral levels.
Check out platinum:
While on the one hand it looks as if we’re set for a pull-back, which would be bullish at this point, all on it’s own that golden cross of the 50-day moving average crossing through the 200-day is pretty bullish.
Palladium looks to be finally ready to come down and test its 50-day:
That is something palladium has done several times over the last year and is very healthy price-action. Anybody who is into the American Palladium Eagle will want to watch to see if palladium does indeed pull back from here because we’re basically talking about 40 bucks worth of savings if it does.
Copper pulled-back to its 50-day and then bounced:
Nobody wants to give this copper bull any love, but it keeps on doing all of the things one would expect in a bull market.
And fundamentally speaking, 2017 was a year of natural disasters that caused massive damage all around the world, and China still has that whole Belt and Road Initiative thing going on, so there really is no reason to believe why copper wouldn’t be in demand right now.
Crude looks to be holding at support of $65:
Even if crude doesn’t hold support there, there is support at $64.
The dollar looks set to perform its “dead cat bounce”:
If it does, then the next line of resistance would be 91. Sure there is resistance at 90, but 91 is the key level.
The yield on the 10-year is getting closer and closer to what everybody is calling the all too critical 3%:
But here’s a thought:
If China is selling their bonds, if the Fed is selling their bonds, and if the U.S. has to sell even more bonds to fund their deficit spending, increasing revenue due to tax cuts and possibly spending on a roll-out an infrastructure plan, then the U.S. is going to need to sell even more bonds than otherwise.
So here’s the question: Wouldn’t that mean that anybody who still actually owns bonds should get out in front of that trade and sell too?
We could start to see those spikes in interest rates I have been talking about.
The VIX is starting to sense all of this market anxiety. We can’t call it uncertainty, and we can’t call it volatility, because the cartel has effectively neutered those:
Even if the stock market is oblivious:
The iShares Silver Trust ETF (SLV) was trading at $16.23 per share on Monday morning, down $0.18 (-1.10%). Year-to-date, SLV has gained 1.50%, versus a 7.29% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Silver Doctors.