Strong Economic Data And Housing Boost Market

Hello traders everywhere. Stocks traded at record intra-day highs Friday morning as strong global economic data, strong housing data, and a solid start to the earnings season led to another week of gains. This week's move for the S&P 500 and DOW are close to posting the best weekly gain in 5 months.

All three of the major indexes hit intraday highs in Friday morning trading with the S&P 500 hitting 3,326.44 up +1.7% for the week. The DOW continues to trade above 29,000, hitting a high of 29,373.62, posting a +1.7% gain. The NASDAQ will post a weekly gain of +1.9% and hit a record high of 9,393.48.

Chinese industrial data for December came in better than expected, with production rising +6.9% on a year-over-year basis. The overall Chinese economy grew by +6.1% in 2019, matching expectations. To be sure, that is also the slowest growth rate for the Chinese economy since 1990. Continue reading "Strong Economic Data And Housing Boost Market"

My Big Trend Analysis For Silver Investors - Part 2

This, the second part of our Silver research article suggesting Silver may be forming a massive price base in preparation for an explosive upside move, will continue from Part I of this research series.

Our research team believes Silver is setting up in a price pattern that may already be “ripe” for an explosive upside move. Our researchers have poured over the data and believe the disparity between Gold and Silver is already at excessive levels.

Historically, anytime the disparity between Gold prices and Silver prices (rationalized into comparative Gold price levels) breaches 30% to 60% and Gold begins an upside price advance, Silver typically begins to move higher with 4 to 8+ months. This setup pushes the Gold to Silver ratio back below 50 or 60 as Silver rallies substantially higher, and faster than the price of Gold.

Comparatively, Silver continues to trade within a sideways price range after basing in early 2016. This price range has been fairly consistent between $14.50 and $21.0. With Gold recently starting to move higher because of the US/Iran military conflict, this raises an early warning flag for our research team because Silver has continued to trade below $18 – and well below recent highs near $20.

The price disparity between Gold and Silver is currently greater than 200% based on our proprietary modeling system. Remember, anytime this disparity level is greater than 30% to 60% and Gold breaks out in a rally, Silver will break to the upside within just a few months.

Silver Gold

The second stage rally in Silver, the real money-maker, will come when investors pile into Silver and Silver Miners as the breakout in Silver becomes explosive. The time to get into this trade is/was now or 4 months ago. Still, there is plenty of opportunity for skilled traders right now because the breakout move in Silver and Silver Miners has not really begun yet. Continue reading "My Big Trend Analysis For Silver Investors - Part 2"

World Oil Supply And Price Outlook, January 2020

The Energy Information Administration released its Short-Term Energy Outlook for January, and it shows that OECD oil inventories likely bottomed last June 2018 at 2.800 billion barrels. It estimated stocks dipped 1 million barrels in December at 2.914 billion, 54 million barrels higher than a year ago.

For 2020, OECD inventories are projected to build by 47 million barrels to 2.962 billion. This is EIA’s first projection for 2021, and it forecasts that stocks will draw by 17 million barrels to end the year at 2.945 billion.

Oil

The EIA estimated that OPEC production dipped by 250,000 b/d in December to 29.24 million. For 2020, it estimates that OPEC production will average about 29.19 million, about 600,000 b/d lower than in 2019. For 2021, it estimates OPEC production will remain about the same. Continue reading "World Oil Supply And Price Outlook, January 2020"

My Big Trend Analysis For Silver Investors - Part 1

Everyone seems to be focused on Gold recently and seems to be ignoring the real upside potential in Silver. With all the global economic issues, military tensions, geopolitical issues, and other items continually pushed into the news cycles, it is easy to understand why traders and investors may be ignoring Silver.

Silver has really not started to move like the other precious metals. Gold is up over 45% since 2016. Palladium is up over 350% since 2016. Silver is up only 29% since 2016. The Gold to Silver ratio is currently at 86.7 – very near to the highest level on record going back over 25 years.

Silver

Historically, Silver rallies 6 to 12+ months after Gold begins a price rally. The big break in the Gold to Silver ratio comes at a time when Gold rallies by more than 30% to 60% faster than the price of Silver. In other words, when a major disparity sets up in the price of Gold compared to the price of Silver, then Silver explodes higher – which results in a drop in the Gold to Silver ratio. Continue reading "My Big Trend Analysis For Silver Investors - Part 1"

The Fed's Newest Service: Portfolio Insurance

Every generation believes that they know more than the previous generation. Then, as they get older, they slowly start to realize that their elders aren’t as dumb as they thought. It's normal.

What's different today is that we seem to think, or at least many people do, that not only are we wiser today than everyone who has come before us but that humankind has been doing everything wrong for the past 5,000 years or so of civilization. Whether it's morally wrong to eat meat, or how many genders there are, or who can marry who, or whatever, it seems that we've been misguided since the beginning of time.

This attitude also manifests itself in the economic sphere. Based on the Federal Reserve’s recent actions, they appear to believe that everything we knew or thought we knew about economic cycles and bull and bear markets has been all wrong. Thousands of years of boom and bust cycles could have been eliminated, apparently, if only the proper monetary policy fixes had been applied.

Quite clearly, the Fed’s new mandate is that if economic growth starts to sputter, or the stock market moves beyond a correction, or some international crisis – Brexit, Megxit, Iran, North Korea, trade wars, you name it – threatens to upset the applecart, it will immediately turn its monetary policy tools into high gear.

Before now, economic growth and stock prices were pretty much allowed to take their own course, with some attempts to smooth out the worst excesses. It was considered to be both normal and healthy for markets and economies to go up and down periodically, as long as the general trend was upward. Now, however, that appears to be not only quaint, old-fashioned thinking but just plain wrong. There is no reason, the thinking goes, for us to suffer any economic pain as long as we have the policy tools to avoid it. Continue reading "The Fed's Newest Service: Portfolio Insurance"