Daily Archives: March 14, 2017

Fed Rate Hikes, Fiscal vs. Monetary Policy and Why Again the Case for Gold?

By -

I’ve been thinking about the current Fed Funds rate hike cycle, which is logically gaining forward momentum now that the Fed can stand down from its 8-year, ultra-lenient monetary policy cycle.  That is because the Obama administration’s goals required a compliant Federal Reserve to continually re-liquefy the economy as its fiscal policies drained it.

With the coming of Trump mania and its very different fiscal policy goals, we will witness the end of much of what I considered to be the “evil genius” employed by the Federal Reserve, mostly under Ben Bernanke.  When he oversaw the brilliant and completely maniacal painting of the macro known as Operation Twist in 2011, I knew we were not in Kansas anymore.  We’d gone off the charts and off the balance sheet into a Wonderland of financial and monetary possibilities.

What else would you call a plan to sell the government’s short-term debt and buy its long-term debt in the stated effort to “sanitize” (the Fed’s word, not mine) inflationary signals on the macro?  It was evil, it was genius, and it worked.  So too did various other financial manipulations that took place before and after Op/Twist.  And here we are.

(more…)

Keeping It Real

By -

This post has to do with something which may seem like an oxymoron: integrity in financial prognostications. What inspired me to address this topic? Oh, that’s easy:

0314-gart

As you can see, back on February 22nd, Dennis “Commodity King” Gartman went on CNBC to declare that, at long last, for the first time in about five years, he was bullish on crude oil.

(more…)

Testing Rising Wedge Support

By -

The falling channel broke up on SPX yesterday but held channel resistance on ES and turned back down. SPX is now testing the possible reversal level at rising wedge support from the early November low. At minimum the bounce from there so far confirms and strengthens that support trendline, but this often happens just before a break so we’ll see whether the trendline holds the rest of today. If it does then ES channel resistance is now in the 2369.50 area (approx 2372.75 SPX), and the 50 hour MA is now in the 2370.5 SPX area. SPX 60min chart:

170314 SPX 60min

(more…)

Rocking with Energy

By -

Back on February 10, I wrote a post called Lake Erie, and I did a post for my beloved Slope Plus members called Return to Lake Erie, in which I suggested that energy stocks were going to head lower, and noted I was going to buy the triple-bearish ETF symbol ERY (my precise words on February 10th were Yesterday I start accruing a sizeable position in my IRA account of ERY, the triple-bearish fund based on energy stocks. So far, so good.) I would say this has been going pretty well, as the arrow “buy” point reveals. We’re up about 25% since then.

0314-ERY

I confess to getting a little nervous with crude oil approaching a fairly important trendline, but I’m just going to tighten my stop and hang on. Congrats to others in this trade.