You Have To Invite The Vampire Into Your House

Posted on by Gary Tanashian

A vampire needs to be invited in order to enter your house. So the story goes. But in this case, we are talking about the Macro house, with its nexus in the USA and its Central Bank.

You see, the Federal Reserve inflates money supplies as a matter of doing business, which is why I noted so strenuously in Q4 2018 that Jerome Powell’s then-hawkish stance in the face of a declining stock market made perfect sense… because the 30 year Treasury bond was not bullish; it was bearish and getting more so under the pressure of rising inflation expectations.

But now as we noted the other day the inflated Sub is losing pressure. As we noted before that Goldilocks is being threatened. Here are the updated ‘inflation gauges’ from that post, continuing to lose pressure.

Q4 2018

But in Q4 the Fed had a threat if its own to deal with as the repercussions of its previous inflationary operations could be exposed to the light of day by the breakout through the Continuum’s limiter if it were not arrested promptly. The orange arrow on the chart below shows the point of concern for the Fed. Continue reading "You Have To Invite The Vampire Into Your House" →

Gold Takes Off, Silver To Follow?

Posted on by Aibek Burabayev

In the middle of May, I questioned if the Head & Shoulders pattern, that was detected in April was still intact. Most of you agreed that there was enough evidence to drop that bearish idea, moreover, the new Bull Flag pattern was spotted on the weekly master chart.

Besides that, one of the readers kindly enriched our view, noticing another bullish Cup & Handel pattern that supported the upside expectation.

Last Friday, the gold took off its upside journey as the Bull Flag was breached to the North as price finally moved beyond the $1300 handle and overcame the minor top established on the 14th of May. The targets were set before, let’s hope for the best!

But what about silver? Last time I wrote about it in January using experimental clones from history. This metal had an ugly chart structure as gold had a clearer one. But no matter how the market tries to confuse us sooner or later we will see the end anyway. Again silver has been a laggard behind gold, and the latter gives us a clue as it broke up the resistance.

Let’s see, in the chart below if we can find gold’s shining in the silver market. Continue reading "Gold Takes Off, Silver To Follow?" →

Weekly Futures Recap With Mike Seery

Posted on by Mike Seery

Mexican Peso Futures

The Mexican Peso in the June contract is plummeting this Friday afternoon down 144 points all due to President Trump slapping a 5% tariff on Mexico sending the Peso near a 3 month low. I have been recommending a bearish position from around the 5177 level while adding another contract at the 5140 level and if you took those trades continue to place the stop loss above the contract high which was hit on April 18th at 5287 as an exit strategy. If you have been following any of my previous blogs, you understand that I thought a possible head and shoulders top chart pattern was forming as now it looks to be confirmed. So continue to play this to the downside as the next major level of resistance is at the March 7th low of 2019 as this market looks very bearish in my opinion. If you take a look at the daily chart, the downtrend remains intact as now the volatility has come to life so continue to place the proper stop loss as I think there is significant room to run to the downside. The Peso is now trading far below its 20 and 100-day moving average telling you that the trend has turned negative. I also have a bullish recommendation in the U.S. dollar, which is the strongest currency in the world at the current time and it is used as a flight to quality so continue to play this to the downside.
TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

10-year Note Futures

The 10-year note in the June contract settled last Friday in Chicago at 125 / 06 while currently trading at 126 / 23 hitting a fresh contract high as the stock market is plunging because President Trump has now placed a 5% tariff on the country of Mexico. I have been recommending two bullish positions with an average price of 124 / 25 and if you took that trade continue to place to stop loss at 124/01 as an exit strategy as I think there is still significant room to run to the upside. As I have talked about in many previous blogs, I believe the 10-year note will trade at 2% as the yield currently is at 2.18% as interest rates around the world are negative as this rate still looks exceptionally high. The 10-day note is trading far above its 20 and 100-day moving average as the trend is higher so continue to place the proper stop loss and stay long in my opinion as I see no reason to be short the bond market. There is very little inflation worldwide as deflation is more of a concern coupled with the fact of strong demand to own U.S. Treasuries.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: INCREASING
Continue reading "Weekly Futures Recap With Mike Seery" →

The Inflated Sub Is Losing Pressure

Posted on by Gary Tanashian

The charts are super interesting to look at. How quickly things turn, as if on a dime.

tnx

2018 featured a break above the Continuum’s limiter and folks, you and I were not the only ones who saw that and uttered “ruh roh!”; the Fed was well aware of the inflationary implication. Continue reading "The Inflated Sub Is Losing Pressure" →

DOW Triggers New Red Monthly Trade Triangle

Posted on by The INO.com Team

Hello traders everywhere. As we close out the last trading day of May, the only thing that I can think of are tariffs, tariffs, and more tariff talk. Tariffs have certainly been the theme of the month, and without much of a surprise, President Trump closed out the month with the announcement of Mexican tariffs. That news has pushed the major indexes lower on the day with the DOW triggering a new red monthly Trade Triangle indicating that the index is now facing a long-term downtrend.

Washington will impose a 5% tariff from June 10, which would then rise steadily to 25% until illegal immigration across the southern border was stopped, Trump tweeted later on Thursday. Mexican President Andres Manuel Lopez Obrador said he would respond with "great prudence."

Red Monthly Trade Triangle

All three major indexes are down over -6% on the month, the worst losses of the year on a monthly level this year, with the NASDAQ leading the pack with a loss of -7.5%. The DOW is the first of the three to issue a new red monthly Trade Triangle, but the other two are not far behind. In fact, the DOW just set it's longest weekly losing streak in 8 years with 6 straight weeks of losses. The NASDAQ and S&P 500 will both post their 5th weekly loss out of the last 6 weeks. Continue reading "DOW Triggers New Red Monthly Trade Triangle" →