Daily Archives: December 14, 2016

Gold’s Sloppy Path

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As I was dumping almost all my personal bullion when it was above $1300, folks were telling me how foolish I was, how I was pulling a “Gartman”, and so forth. All I can say is, as gold’s value continues withering away, I don’t have any regrets. I think it’ll bounce back to $1250 at some point, yeah, but I think it’s going to be a miserable 2017 for the yellow metal (and even worse for miners). Gold sucks. It’s just about the only asset that’s reliably down every day.

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The Fed Wind Always Blows

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FOMC day again today and as ever I’m astounded by the number of people hanging onto Yellen’s every word, and what a market moving event this tends to be. Even more amazing is the importance that everyone seems to attach to the Fed’s ‘control’ of interest rates, and in the event that they show a small sliver of backbone today and take the tiny step of increasing the fed rate from almost nothing to a little more than almost nothing, then this will be extensively debated over coming weeks as though it really matters.

The truth is though that the fed rate only really impacts very short term interest rates, and that anything longer term is determined by markets in the form of the yields on the ten year (TNX) and 30 year (TYX) treasuries. The Fed has little influence over these as far as I can tell, and doesn’t appear to employ any technical analysts good enough to allow the Fed bigwigs to comment intelligently about them. On a good day their forecasts for these are fairly random, and on a bad day (late 2013) almost perfectly inaccurate. Anyone genuinely interested in bond yield direction should be watching Chart Chat at theartofchart.net twice a week, or at minimum coming to our December forecast for the next year, which this year (for indexes, bonds and currencies) is after the close tomorrow and free to all. You can register for that on this page here if you’re interested.

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Watch the Yen

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The final appears of the year by The Creature of the Grey Lagoon takes place today. I, for one, will be glad when it’s over, since I can hardly stomach dealing with the market machinations when the old biddy is yammering away at these press conferences.

One item to watch in particular is the Yen, whose inverse relationship with the dollar is shown below. It’s a terrific top, and I’d expect a hard slump beneath this pattern once the interest increase everyone expects is finally out of the bag.

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