Saturday, May 26, 2012
Trader Dan on King World News Markets and Metals Wrap
Join Eric King and I as we discuss the gold and silver market action this past week, along with an analysis of the Commitment of Traders report, the outlook for the US Dollar and the mining shares in general, on the KWN Markets and Metals Wrap.
Friday, May 25, 2012
Tough Luck to this Year's Crop of High School Graduates
As bad as things are in Europe, it is easy to forget how rotten the state of the US economy currently is. Take a look at the following story from the Washington Times to see how the recent crop of High School Graduates are going to fare in this current job market.
http://www.washingtontimes.com/news/2012/may/24/number-of-high-school-students-with-jobs-hits-20-y/
If that is not enough to make you cringe, read the following piece that has comprised a YOUTH MISERY INDEX. It is very revealing indeed.
At no point in recent history has life been harder for America’s young people. The Youth Misery Index adds together youth unemployment, average graduating student debt (in thousands), and national debt per capita (in thousands).
Youth unemployment is at 17.4 percent—one of the highest levels since World War II.
http://www.yaf.org/youthmisery/index.html
Number of high-school students with jobs hits 20-year low
-
The Washington Times
Thursday, May 24, 2012
http://www.washingtontimes.com/news/2012/may/24/number-of-high-school-students-with-jobs-hits-20-y/
If that is not enough to make you cringe, read the following piece that has comprised a YOUTH MISERY INDEX. It is very revealing indeed.
At no point in recent history has life been harder for America’s young people. The Youth Misery Index adds together youth unemployment, average graduating student debt (in thousands), and national debt per capita (in thousands).
Youth unemployment is at 17.4 percent—one of the highest levels since World War II.
http://www.yaf.org/youthmisery/index.html
Wednesday, May 23, 2012
Trader Dan interviewed at King World News on Gold and Gold Stock Action
Please click on the following link to read my interview with Eric King on the KWN network about today's price action in both gold and the gold shares.
Continuous Commodity Index - Fed Operation "Push Down Commodities" Successful
I have been convinced for some time now that the Fed is growing increasingly concerned about the impact from both the Eurozone and the slowdown in China on the US economy. The swooning equity markets in the US ( the S&P 500 is almost negative on the year as of the low today) are heralding investor fears and uncertainty over when the next round of stimulus might be coming.
Yet the Fed continues to remain relatively silent when it comes to committing to any definitive date for another round of bond purchases even as the yield on the Ten Year Note is now close to 1.70%, having clearly broken below the critical 1.8% level last week.
I have maintained for some time that the Fed fully understands the impact that another round of QE will unleash on the commodity markets and is therefore attempting to see these markets driven lower before engaging more actively in QE talk. As stated many times here already, the danger they face in this gambit that they are playing is a collapsing stock market. One wonders just how much more downside they are going to try to squeeze out of the commodity markets before stepping in.
If you notice on the chart below, the CCI has one more line of support near the 500 level, which is the 38.2% retracement level of the entire rally from the 2008 low. If that does not halt the decline in the commodity world in general, then it is quite conceivable that the index could fall all the way to the 50% retracement level near 438. That level is also reinforced as technically significant as it is near the lower tine of the pitchfork drawn off the 2001 low and 2008 high, an area where we can expect to see some buying emerge.
While one can see that the long term macro trend on commodity prices remains higher, the intermediate trend is lower as is the minor trend which can be clearly seen on a daily chart.
For the silver guys out there, you will need to see this chart show some definite signs of bottoming before silver can be expected to start any sort of uptrending move.
Yet the Fed continues to remain relatively silent when it comes to committing to any definitive date for another round of bond purchases even as the yield on the Ten Year Note is now close to 1.70%, having clearly broken below the critical 1.8% level last week.
I have maintained for some time that the Fed fully understands the impact that another round of QE will unleash on the commodity markets and is therefore attempting to see these markets driven lower before engaging more actively in QE talk. As stated many times here already, the danger they face in this gambit that they are playing is a collapsing stock market. One wonders just how much more downside they are going to try to squeeze out of the commodity markets before stepping in.
If you notice on the chart below, the CCI has one more line of support near the 500 level, which is the 38.2% retracement level of the entire rally from the 2008 low. If that does not halt the decline in the commodity world in general, then it is quite conceivable that the index could fall all the way to the 50% retracement level near 438. That level is also reinforced as technically significant as it is near the lower tine of the pitchfork drawn off the 2001 low and 2008 high, an area where we can expect to see some buying emerge.
While one can see that the long term macro trend on commodity prices remains higher, the intermediate trend is lower as is the minor trend which can be clearly seen on a daily chart.
For the silver guys out there, you will need to see this chart show some definite signs of bottoming before silver can be expected to start any sort of uptrending move.
Monday, May 21, 2012
Gold attempting to get to that "16" Handle
Gold put in a decent performance in today's session but was stymied at that psychological resistance level of $1600. It seems as if traders are basically standing around looking at each other to see who is going to commit first to buying it above this level.
Right now there is a general hesitation to get too aggressive as there is yet another, (sigh!) summit this week in Europe, this time in Brussels on Wednesday, where the market will have to digest whatever fodder these clowns want to utter. Look for more of the same talk that we got from this weekend's gathering in Chicago - namely - growth instead of austerity which translates to money printing.
At some point this will have the anticipated inflationary impact but not until we see something actually take place besides more talk. The moment, and I do mean the moment, we get confirmation that the ECB and the Fed are going to do the only thing that they can do, gold will move higher and start another leg in an uptrend. Until then we may have to be content with it marking some time here and allowing dip buyers to come in at appropriate moments barring some unexpected news.
I have not had to change the notations and resistance and support levels on the price chart as of yet but you can see where the resistance is located near the $1600 level. Above that, $1625 or so is next.
Downside support comes in at the $1575 - $1565 level.
Right now there is a general hesitation to get too aggressive as there is yet another, (sigh!) summit this week in Europe, this time in Brussels on Wednesday, where the market will have to digest whatever fodder these clowns want to utter. Look for more of the same talk that we got from this weekend's gathering in Chicago - namely - growth instead of austerity which translates to money printing.
At some point this will have the anticipated inflationary impact but not until we see something actually take place besides more talk. The moment, and I do mean the moment, we get confirmation that the ECB and the Fed are going to do the only thing that they can do, gold will move higher and start another leg in an uptrend. Until then we may have to be content with it marking some time here and allowing dip buyers to come in at appropriate moments barring some unexpected news.
I have not had to change the notations and resistance and support levels on the price chart as of yet but you can see where the resistance is located near the $1600 level. Above that, $1625 or so is next.
Downside support comes in at the $1575 - $1565 level.
Whistling Pass the Proverbial Graveyard
Remember when you were a little child and had to walk past a graveyard or cemetery on the way home? The process was rather unnerving particularly if it was in the evening. So along comes the advice of your seniors..."Just strike up a pleasant tune and whistle it out loud. It will perk you up and chase away any fears".
I got the distinct impression that this is what occurred in today's S&P 500 futures pit. Oh I know what the "perma bulls" will tell us. "Equity prices had gotten too cheap. The economy is not as bad as the stock markets are indicating" and so on and so on. But the "whistling tune" I loved the best today was this one:
"European leaders are going to go at their problems by employing a 'GROWTH' strategy and are moving away from 'AUSTERITY'.
NOTE: INSERT MELODY HERE TO AID WOULD-BE WHISTLERS AS THE AIR RUSHES PAST THEIR LIPS".
Why not just cut the crap and state the obvious - these short-sighted politicians and monetary officials will do anything to prevent themselves from getting booted out of office by a public ADDICTED TO GOVERNMENT SPENDING. Look at what happened to Sarkozy. He was replaced by a Socialist who LOVES DEBT AND MORE TAXES to apparently try to fund it all.
Hard choices?! Forgeddabout it! That's for the poor chump stupid enough to think that the public will give him a chance to do so.
Either way, the result of this "pursuit of growth" instead of austerity was the supposed reason that we had an enormous short squeeze in the US equity markets today. My guess is that the powers that be made sure that they had their "pals" bid the market high enough to trip the algos into buying and then sat back and laughed at what they had managed to pull off once again.
With the FACEBOOK IPO smell still souring the air, one has to wonder how much more contempt these elites have for the general public whom they just led to the slaughter touting that piece of junk stock. Didn't matter however - today was "All these European problems are so overblown Dude - Day".
The timing of the big BULLISH OUTSIDE REVERSAL DAY just happened to coincide with a market approaching the critical 50% Fibonacci Retracement Level. That level also happens to not be very far away from the 200 day moving average. Surprise? I doubt that. Now we watch and wait to see how much, if any, staying power, today's contrived equity rally is going to have.
I got the distinct impression that this is what occurred in today's S&P 500 futures pit. Oh I know what the "perma bulls" will tell us. "Equity prices had gotten too cheap. The economy is not as bad as the stock markets are indicating" and so on and so on. But the "whistling tune" I loved the best today was this one:
"European leaders are going to go at their problems by employing a 'GROWTH' strategy and are moving away from 'AUSTERITY'.
NOTE: INSERT MELODY HERE TO AID WOULD-BE WHISTLERS AS THE AIR RUSHES PAST THEIR LIPS".
Why not just cut the crap and state the obvious - these short-sighted politicians and monetary officials will do anything to prevent themselves from getting booted out of office by a public ADDICTED TO GOVERNMENT SPENDING. Look at what happened to Sarkozy. He was replaced by a Socialist who LOVES DEBT AND MORE TAXES to apparently try to fund it all.
Hard choices?! Forgeddabout it! That's for the poor chump stupid enough to think that the public will give him a chance to do so.
Either way, the result of this "pursuit of growth" instead of austerity was the supposed reason that we had an enormous short squeeze in the US equity markets today. My guess is that the powers that be made sure that they had their "pals" bid the market high enough to trip the algos into buying and then sat back and laughed at what they had managed to pull off once again.
With the FACEBOOK IPO smell still souring the air, one has to wonder how much more contempt these elites have for the general public whom they just led to the slaughter touting that piece of junk stock. Didn't matter however - today was "All these European problems are so overblown Dude - Day".
The timing of the big BULLISH OUTSIDE REVERSAL DAY just happened to coincide with a market approaching the critical 50% Fibonacci Retracement Level. That level also happens to not be very far away from the 200 day moving average. Surprise? I doubt that. Now we watch and wait to see how much, if any, staying power, today's contrived equity rally is going to have.
China flips the Finger to Wall Street
The following article appeared today on Reuters which is well worth your read. In a move that illustrates the growing clout of China, approval was granted by the US Government for it to bid DIRECTLY through the auction system of the US Treasury, completely bypassing the PRIMARY DEALER BANKS.
My guess is that the Chinese were sick and tired of being front-run by these unscrupulous banks and issued a stern but quiet demand to either allow them to go this route, OR ELSE!
This further underscores the fact of the growing economic clout of China and just how utterly dependent our nation has become on its funding of our outrageous and downright contemptible indebtedness.
http://www.reuters.com/article/2012/05/21/us-usa-treasuries-china-idUSBRE84K11720120521
NEW YORK (Reuters) - China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters.
My guess is that the Chinese were sick and tired of being front-run by these unscrupulous banks and issued a stern but quiet demand to either allow them to go this route, OR ELSE!
This further underscores the fact of the growing economic clout of China and just how utterly dependent our nation has become on its funding of our outrageous and downright contemptible indebtedness.
Exclusive: U.S. lets China bypass Wall Street for Treasury orders
By Emily Flitterhttp://www.reuters.com/article/2012/05/21/us-usa-treasuries-china-idUSBRE84K11720120521
NEW YORK |
NEW YORK (Reuters) - China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters.
Saturday, May 19, 2012
Trader Dan on King World News Markets and Metals Wrap
Please click on the following link to listen in to my regular weekly radio interview with Eric King on the KWN Markets and Metals Wrap.
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