Category: INO.com Contributors

Silver Futures Remain Extremely Choppy

Posted on by Mike Seery

Silver Futures

Silver futures in the December contract is currently trading at 23.61 an ounce after settling last Friday in New York at 24.67 down over $1 for the week as prices are right near a 5 week low.

At the current time, I'm not involved. Suppose you have been following any of my previous blogs. In that case, you understand that I was looking at a possible bullish position if prices broke the 25.71 level, which never occurred, so I'm sitting on the sidelines being patient as this market remains extremely choppy. Remember, when you trade the commodity markets, trading with the path of least resistance is the way to go over time while also avoiding choppy markets like silver. We await the highly-anticipated U.S election next Tuesday, which certainly will dictate short term price action going forward.

Silver prices are now trading below their 20 and 100-day moving average as the trend has turned to the downside with major support at the 22 level. If that is broken, you would have to think that prices will go down to the 20 area; however, longer-term, I still like silver as I'm just waiting for a buying opportunity.

TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Gold Futures

Gold futures in the December contract settled last Friday in New York at 1,905 an ounce while currently trading at 1,887 down about $20 for the trading week as prices are hovering right near a 3 month low.

I do not have any precious metal trades as I was looking at a possible bullish position if prices closed above the 1,939 level, which never occurred. This market is under pressure because a stimulus agreement will not be reached before the U.S. election next Tuesday as that is disappointing, therefore, pushing the U.S. dollar higher. Continue reading "Silver Futures Remain Extremely Choppy" →

Gold Miners: Beautiful Pictures

Posted on by Gary Tanashian

After a well-deserved correction of nearly 3 months, the gold stock sector is still flashing positive signs beneath the surface, as the correction matures.

The correction that began in August amid the ‘Buffett Buys a Gold Stock!‘ tout has now ground on for nearly 3 months. As noted in the NFTRH 626 Opening Notes segment:

“Thus far the correction in gold, silver and the miners is perfect, where perfection means long, drawn out and maddeningly frustrating to bulls (and bears thus far). That’s what corrections are, remedies to excitement, confidence and of course, greed.”

We are managing the technical details (and associated strategies) of the correction in HUI and individual gold stocks each week in NFTRH, but as a gold stock investor, it has not been a time for making money since August. As a trader, it has been a difficult time for making money as well, because of the lack of a definitive drop that the sector’s corrections are known for. It has been a grind, and in that annoying, time-consuming process, it has been perfect.

Below are some pictures that we have maintained front and center during the correction in order to disqualify or more likely, confirm the macro bull view for gold and the miners. This was so that subscribers could sell, buy or hold as they see fit, but more importantly so that we could know the status of the backdrop all along the way to make better-informed decisions.

Meanwhile, the perfection has been in the cleaning of the investor base, a large portion of which thinks that inflation is good for gold miners. Often it is for the stock prices, but rarely is it good for the bedrock sector fundamentals. One of the best measures of the real price of gold is the Gold/CRB ratio, which is in part of the measure of the gold mining product vs. gold mining costs, especially energy costs. Continue reading "Gold Miners: Beautiful Pictures" →

Mitigating Election And COVID-19 Volatility

Posted on by The INO.com Team

The confluence of the impending U.S. Presidential election, rising COVID-19 cases domestically and abroad, and market dependency on stimulus measures give rise to a potentially volatile environment in November. Positioning your portfolio to be as agile as possible is essential when navigating these potentially volatile events. Cash on-hand, exposure to broad-based ETFs, and options is an ideal mix to achieve the portfolio agility required to mitigate uncertainty and volatility expansion.

Options trading at its core defines risk, leveraging a minimal amount of capital, and maximizing investment return. Proper portfolio construction is essential when engaging in options trading to drive portfolio results. This cash liquidity position provides portfolio agility to adjust when faced with extreme market conditions such as the September market correction rapidly.

An agile options based portfolio is essential to navigating these pockets of volatility. The recent September correction is a prime example of why maintaining liquidity is one of the many keys to an effective long term options strategy. In May, June, July, August, September, and October, 141 trades were placed and closed. An options win rate of 97% was achieved with an average ROI per trade of 7.5% and an overall option premium capture of 88% while outperforming the broader market despite the September correction (Figures 1 and 2).

volatility
Continue reading "Mitigating Election And COVID-19 Volatility" →

Put The Blame On Me

Posted on by George Yacik

At least since the global financial crisis of 2008, Federal Reserve officials have, by and large, denied or downplayed the idea that their zero-interest-rate policies and mammoth bond purchases have artificially inflated financial assets even as the Fed is buying trillions – with a capital T – of U.S. Treasury and mortgage-backed securities markets and more recently corporate bonds. Now the presidents of a few of the Fed’s regional banks are suggesting that the Fed study whether its monetary policies are encouraging overly risky investor behavior.

Loretta Mester, the president of the Cleveland Fed, conceded that prolonged periods of low rates could incite “higher levels of borrowing and financial leverage, increased valuation pressures, and search-for-yield behavior.”

“While monetary policy that leads to a stable macroeconomy encourages financial stability, it is also possible that in an environment with low neutral rates, a persistently accommodative monetary policy could, in some cases, increase the vulnerabilities of the financial system,” she said.

Boston Fed President Eric Rosengren went even further, suggesting that the Fed “rethink” financial regulation – but apparently not monetary policy – to rein in speculative behavior. Continue reading "Put The Blame On Me" →

Futures Market Looks To Heat Up

Posted on by Mike Seery

Heating Oil Futures

Heating oil futures in the December contract settled last Friday in New York at 118.48 while currently trading at 116.85, down about 200 points for the week as prices are still stuck in a tight 7-week consolidation pattern looking to break out to the upside in my opinion.

I will recommend a bullish position if prices break the October 9th high of 121.44, which could happen next week as prices are trading right at their 20-day but still below their 100-day moving average, which stands at the critical 123 level.

The volatility in this commodity will start to explode to the upside as we start to enter the winter months as seasonably speaking. That's when prices can have tremendous spikes to the upside due to frigid weather out in the eastern part of the United States. I think demand will also start to come back for this commodity, and if you look at most commodity sectors, they are rallying significantly. I do not have any energy recommendations at the current time, but it looks to me that heating oil has bottomed out as the risk/reward would be in your favor as this is a very large contract.

TREND: LOWER - MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: AVERAGE

Silver Futures

Silver futures in the December contract are currently trading at 24.61 an ounce after settling last Friday in New York at 24.40, up slightly for the week experiencing high volatility as prices are looking to break out the upside in my opinion despite the recent pullback. Continue reading "Futures Market Looks To Heat Up" →