A Macro View For Stocks, Commodities And Gold

Final rally for stocks, commodities to top, and a final down leg for gold?

This is one man asking one question among several I could be asking, given the volatility of macro indicators on a day-to-day, week-to-week basis. But as FOMC rides off into the sunset it is the scenario that I think is most probable, given the current state of some indicators we follow.

  • The yield curve is on a flattening trend that started signaling the beginning of the end of the inflation trades since the flattener began last April.
  • The Silver/Gold ratio has failed to establish any sort of firm signal to back the inflation trades since silver blew out with the ill-fated #silversqueeze promotion a year ago. That remains the case today.
  • Canada’s TSX-V index has gone bearish nominally and never did break its downtrend in relation to the senior TSX index. This is negative signaling for the more speculative inflation trades.
  • The Baltic Dry index of global shipping prices is in the tank, so to speak, having topped in October and dropped by 75% since.
  • Credit spreads are still intact, but bear watching as nominal junk bonds come under stress.
  • Industrial metals are still rising vs. the gold price, a still-intact macro positive, although Copper/Gold ratio continues to be undecided and a potential warning.
  • Gold had exploded upward vs. US (SPX/SPY) and global (ACWX) stocks. As we noted in an NFTRH update at the time, it would be subject to a potentially severe pullback whether or not the ratio has bottomed. The pullback started on Wednesday (FOMC day, and who is surprised?), and when gold bottoms vs. stocks the macro will be indicated to go quite bearish. For now, we’re neutral on the short-term.

With that macro backdrop in mind, let’s update three areas, US Stocks, Commodities, and Gold. Continue reading "A Macro View For Stocks, Commodities And Gold"

Commodity Prices Hit 7-Year High Amid New Bull Run

The Refinitiv/CoreCommodity CRB Index (CRB index) is a commodity futures price index. It was well known under the name Thomson Reuters/Jefferies CRB Index before renaming. The CRB index is the gauge of the commodities market, which is comprised of 19 items as quoted on the NYMEX, CBOT, LME, CME, and COMEX exchanges within four following groups:

    • Petroleum-based products (based on their importance to global trade, always make up 33% of the weightings)
    • Liquid assets
    • Highly liquid assets
    • Diverse commodities

It includes aluminum, cocoa, coffee, copper, corn, cotton, crude oil, gold, heating oil, lean hogs, live cattle, natural gas, nickel, orange juice, silver, soybeans, sugar, unleaded gas, and wheat.

More than four years ago, I shared with you a big map of the CRB index with a long-term outlook. (Original chart is below) Continue reading "Commodity Prices Hit 7-Year High Amid New Bull Run"

If Slovakia votes no, stocks tank tomorrow

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Monday, the 10th of October.

This morning I was reading that there are approximately 3.2 million job openings here in the United States. With more than 14 million people out of work in this country, how can we possibly have 3.2 million job openings still not filled?

These are job openings that the private sector needs to fill. I know from our own experience here at our company, finding competent people it extremely difficult. Part of the problem, in my opinion, is that many job applicants have no skills.

The CEO of Cummings, Tim Selso said he can't find skilled workers for his manufacturing plants. This is a common complaint that many CEOs share.

According to economists, the average worker contributes about $45,000 a year to GDP. If we could just fill 1/3 of those jobs, it would have a huge impact on the economy.

Like many traders today, we were surprised at the velocity of the rally which is based on a potential agreement coming into place in Europe. At the moment no one knows what the deal is, and nobody in a position of authority is indicating what the deal is. The vote from Slovakia has the potential to torpedo any recovery and is a big hurdle approaching tomorrow. If that tiny country votes "no" to this proposed agreement, it could send stocks, and in particular bank stocks, to the cellar!

That leaves us with just one option... What are the Trade Triangles saying?

------------- Continue reading "If Slovakia votes no, stocks tank tomorrow"

Which is more exciting: the market of late or a game of Pong? You choose.

Hello traders everywhere, Adam Hewison here co-founder of MarketClub with your 1 p.m. market update for Friday the 17th of June.

I guess the most common expression I'm hearing is "kick the can down the road.". It would seem as though politicians the world over are pretty much the same. None of them wants to face the truth that there is no more money. So what do they do they, "kick the can down the road."

And once again the taxpayers have to come up with the money. Lending more money to Greece is the height of insanity in my opinion simply because how can they possibly pay back the first tranches of money that was already lent to them? But that's what's happened today; Merkle and Sarkozy  made concessions and basically declared that "happy days are here again," but are they really? I was talking to a good friend of mine this morning who is one of the smartest people I know and I asked him point-blank, what do you think of the global and US economy? Here is what he said to me, "It is a time to be cautious and guarded." Those were his exact words. I'll let you think about that.

So okay enough of what my smart friends think, let's look and see what the market thinks about everything.

Here's what's happening in the major markets right now ... Continue reading "Which is more exciting: the market of late or a game of Pong? You choose."

More of the same, but are we starting to tip down?

Hello traders everywhere, Adam Hewison here co-founder of MarketClub with your 1 p.m. market update for Wednesday the 15th of June.

Okay, now here's what's happening right now in the major markets (click to watch the video)...

SP 500: -70. The market action today can only be described as negative. A score is now -70 and our downside target for this market is 1250. Major downside support is at 1250.

Silver: -70. I would watch this market very carefully today as I feel that it is probably at the lower end of its range. We would use the Donchian Channels along with the fact that this market is oversold and expect to see a bounce from current levels. Major Support at 34.00.

Gold: +70. Gold is currently oversold and we expect to see this market balance sometime in the near future. We would not be surprised to see further sideways action but we want to be long this market as the Donchian channel comes in at 1503. Major support at 1,500. Continue reading "More of the same, but are we starting to tip down?"