Judy Shelton And The Fed

I come not to praise Judy Shelton, nor to bury her. But the blanket media and political condemnation of her as President Trump’s latest (I forget which number we’re up to) nominee for the Federal Reserve Board strikes me as having nothing to do with her actual qualifications for the job but rather a reflection on her sponsor and her failure to be “the right kind of people,” meaning someone who doesn’t subscribe to the establishment groupthink.

During the several days prior to her confirmation hearings before the Senate Banking Committee last week, and back when she was first nominated, there was a flurry of scare headlines and stories about her unfitness for the position. No less than the sanctity of the independence of the Fed and the security of the U.S. economy was in jeopardy if she was confirmed. Here’s a small sample:

  • New York Times: “As Congress Prepares to Vet Judy Shelton, Worries About the Fed’s Future Mount”
  • Washington Post: “Republicans Must Protect the Fed From A Flagrantly Unqualified Nominee”
  • Bloomberg: “Judy Shelton Would Destroy Trump’s Pro-Worker Legacy” (as if Bloomberg would acknowledge any Trump accomplishment)
  • CNN: “Trump’s Fed Pick Isn’t Just a Gold Bug – She’s Also a Crypto Bull”

The Post also provided 10 of what it says are her “most controversial quotes.”

Controversial quote number 1 was this: “I don’t see any reference to independence in the legislation that has defined the role of the Federal Reserve for the United States. It would be in keeping with its historical mandate if the Fed were to pursue a more coordinated relationship with both Congress and the president.”

Indeed, how independent can the Fed be when its members are appointed by the President and ratified by the Senate? And it funds itself by buying massive amounts of government securities. Not to mention that Congressional mandate thing. Is it unreasonable to expect an agency that has a Congressional mandate might actually have to report to Congress every so often to make sure it’s adhering to that mandate? Continue reading "Judy Shelton And The Fed"

Is Another All-Time High Ahead For Palladium?

Before we start to analyze the mighty metal, I would like to mention that the crude oil futures Buy Setup was triggered last Friday as the futures price broke above $52.25. Please mind the risk if you trade and I wish you good luck there.

Now let’s get down to the metal. Earlier this year, we pushed a new Pendulum with regular champ palladium on board. Before you bet for Pendulum winner, I tailor charts for pitted instruments and so I did for palladium using the daily time frame. The outlook was quite ambitious as the bullish target was set at $2140 while the price was hovering around the $1900 level. The majority of you chose the former winner palladium as a new winner again against the logic of the experiment and I don’t blame this choice as this precious metal hits all charts amid strong demand. That target was reached within a week after the post had been published.

I detected a promising pattern on the daily palladium chart and I would like to share it with you as it still emerges.

Palladium
Chart courtesy of tradingview.com

Palladium futures hit the all-time high at $2427 on the 23rd of January. It’s quite natural that the correction followed as traders have booked profits after the price reached another record. Continue reading "Is Another All-Time High Ahead For Palladium?"

Money Will Be Made Trading The VIX In 2020

Market uncertainty creates volatility and the VIX is an index that measures this volatility based on the S&P 500. When news hits the stock market, the VIX increases and when there are fewer outside factors or less uncertainty about the future, we see the VIX fall.

Thus far, in 2020, we have had two situations that have increased volatility in the stock market; the political and military situations between the United States and Iran and the Coronavirus. We are only one month into the year and two major events have occurred which have sent the VIX soaring higher. There will undoubtedly be more pop-up events such as say further political and military issues with Iran or even North Korea perhaps. We will likely see natural disasters pop-up which could cause uncertainty, the situation in England with Brexit and how that is handled could potentially cause uncertainty. Coronavirus is likely to continue to create uncertainty. These are just a few predictions off the top of my head that could cause the VIX to move in the coming months.

One event coming in 2020 that we can all see on a calendar is the Presidential election this year. We know uncertainty about the future causes the VIX to rise and based on the past election of President Donald Trump, we can confidently say that political polling is not very accurate. Thus, we can predict there will be a high level of uncertainty coming down the road with who may be our next President.

With all of this in mind, how do we use this uncertainty to make money? Well, the easiest way is by Continue reading "Money Will Be Made Trading The VIX In 2020"

Are Silver Futures Set To Breakout?

Silver Futures

Silver futures in the March contract settled last Friday in New York at 17.69 an ounce while currently trading at 17.77 up slightly for the trading week as prices have been stuck in the mud over the last month. I am not involved as I'm waiting for a breakout to the upside to occur, which would happen if prices crack the January 27th high of 18.37. I will not take a short position because I think the downside is very limited.

Silver prices are trading right at their 20-day while still above their 100-day moving average as the Coronavirus is continuing to spread, and I think that will support prices here in the short-term. The chart structure will also start to improve in next week's trade as we could be involved relatively soon with gold prices remaining strong.

The volatility at the current time remains relatively low. However, I don't think that the situation is going to last much longer as fundamentally, and technically speaking, I believe this commodity looks good. Keep a close eye on this market as we could be involved soon as I think the risk/reward is in your favor.

TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Gold Futures

Gold futures in the April contract settled last Friday in New York at 1,573 an ounce while currently trading at 1,585 on concerns about the Coronavirus continuing to spread, especially in China helping support prices here in the short-term. I'm not involved, but I do believe higher prices are ahead, and if you are long a futures contract, Continue reading "Are Silver Futures Set To Breakout?"

Disappointing Consumer Data Weakens Rally

The stock market is headed for strong weekly gains despite a rising number of reported coronavirus cases and disappointing consumer data. The S&P 500 and DOW are each up more than +1% for the week as we head into Friday afternoon trading. The NASDAQ, meanwhile, has risen +2% for the week lead by strong earnings in the tech sector, which has dominated or Top Stocks list this week.

Core retail sales, which exclude autos, gas, building materials, and food services, were unchanged last month, the Commerce Department said. The department added clothing-store sales had its most significant one-month decline since 2009. Continue reading "Disappointing Consumer Data Weakens Rally"