“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat


Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


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Thursday, September 25, 2014

Stock Market Weakness Brings Safe Haven buying into Gold, Bonds

One look at the Japanese Yen is all that one needs to know that the safe haven trade was being plied today. As the stock market moved lower ( surrendering its gains from yesterday), the Yen moved higher. Bonds moved up a full point and up came gold from the grave.


This is why trading the Yen in the current environment can cause one to invest heavily in a supply of Tums or Rolaids. The infernal currency has somehow over the years morphed into a safe haven. In effect, one ends up trading risk or no risk when trading the yen.

It looked as if gold was about to run down and test $1200 as it traded below Monday's low but that safe haven buying popped it back up.

The bulls are certainly putting in a good faith effort to prevent it from breaking down and changing handles.

Very quickly on the grains... so much for the wheat rally from yesterday. Strength in the Dollar is proving to be a big lead weight for wheat.


I will try to get some more up later... it is a busy morning in trading land.

11 comments:

  1. Equities not looking good heading into October...The Russell 2K has led the way...

    ReplyDelete
  2. gasoline wowo RB up 2%...looking at the continuation RB chart a nice double bottom, then a 'spring' above the 2012 lows. bubblin CL back green trying 20-day MA.

    RUT a lot of talk about the death cross 50-day below 200-day. however the stats guys are showing in history it's been more of a buy intermediate term on the RUT death cross.

    eur/usd into that zone of the twin lows 1.2756 and 1.2745 going back to 2012...
    it would be ideal for gold to do a lower volume test of the 1180 low and spring back up, that might get big boyz more interested.

    cheerio!

    ReplyDelete
  3. Ags futures op-ex is tomorrow as well. soybeans highest open interest at the 9 strike.

    listening to a guy from SDakota, rail cars are scarce and rail prices sky high, so corn basis is at 2.40.

    spot ethanol prices have plunged from $2.29/gln 2-weeks ago to $1.96/gln this week and vs. $2.72/gln a year ago.
    ethanol chart been like the corn chart lately.

    ReplyDelete
  4. If there was ever any doubt about the Fed's easy money being all that the stock markets care about just look at the difference between today and yesterday in the Dow and S&P

    Yesterday Evans from the Fed says more easy money for longer would be a good idea. And the stock markets rocket higher.

    Today Fisher who is leaving the Fed soon says higher interest rates sooner than people think. And the Dow and S&P tank on that type of talk.

    ReplyDelete
    Replies
    1. barneyb6;
      don't forget Lockhart who said most likely rate hike in mid-2015 or later.

      He also was out today.
      I found what he said very interesting:
      "Low Inflation reflects underlying economic softness".

      That has been my contention for some time now.

      He also noted that he is more worried about an inflation undershoot rather than an overshoot.

      Nothing that he said is the least bit bullish for the precious metals.

      Delete
    2. I am figuring the interest rate hike later Dan from what Lockhart said,

      as I am sure the Fed sees that a global recession is probably going to happen before the Fed ever gets around to doing an interest rate hike.

      Deflation looks to continue and thats not good for precious metals or the stock markets or interest rate hikes one has to figure.

      Delete
  5. Dan,

    Does probability favor gold reaching 1200 first or it reaching 1250 first from this point?

    Thanks!

    ReplyDelete
    Replies
    1. dfly;

      It is a bear market so which one would you pick knowing that?

      I believe it would have hit it today had not the stock universe sold off and we got that risk aversion trade coming back on.

      that popped gold higher and saved the bull's bacon.

      Delete
  6. Thanks a lot.
    I had no time to post last 2 days and probably won't have much tomorrow.
    As a side comment, Eur Usd hit the 1.2730 fibonacci level and closed above it. It also corrresponds to the inf bollinger band weekly time unit, so it's an important level for me.
    Already, eur usd broke through the red support of my downwards channel...meaning that I can extend it by tracing its mirror image as potential next target further down. At least, the channel whould also be as large as the one we had a few years ago when eur usd was collapsing.
    So, it is perfectly possible that we go hit this target even further down...only at that time, the weekly bollinger band was not on the way. Now it says here around 1.27 and prices will have to really push it strong to break through...so, if eur usd wants to finally have a chance to bounce, this is now, guys :)
    As long as this level is not broken, I'm careful with this position (I'm totally out now since 1.2790) and with gold and silver.
    As a nasty naughty short / bear, I'd welcome a short term brief rallye to confirm the weigh of the ma20 above regarding gold, and be able to reload the gun.
    SP500 : still in this rising wedge, and bulls still unable to break above the upwards resistance of the channel of lesser inclination. So watch out for 1945, because if the support here fails, that could start being interesting from a bearish point of view.
    I'm back to Armenia for 3 days only to see the family, then back again to Paris...heck I'm not 20 year old anymore...pretty exhausted I must say.
    Good night all :)

    ReplyDelete
  7. Hubert, What is the gold ma20 currently?

    ReplyDelete
    Replies
    1. dfly, it's around 1250 in terms of daily time unit, or a bit under it now, I didn't update the chart today.
      You can use free platforms which give wonderful technical representation of prices in many markets, such as the one I'm using.
      As long as you don't need faster time units than daily, you won't have to pay anything, the data is absolutely free, and it can really help you making your first steps into T.A.

      Delete

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