MSM: Copper Sinks!

By Biiwii

NFTRH has been bearish on copper for years now due simply to one chart; a long-term monthly view that is as ghastly as any I can recall.

I mean, sometimes markets are really complex, difficult to manage and screw ups abound.  But this right here?  This one simple chart has been idiot proof bearish since forever.

copper

Copper sinks to 2009 levels as China worries weigh

The copper market fears that “the plunging stock market could destabilize the economy and impact resource demand,” said Colin Cieszynski, chief market strategist at CMC Markets.

“Copper is now at a big turning point technically,” he said.

If prices can “bounce back above $2.45 soon, it could be a bear trap washout and may signal a bottom,” Cieszynski said. But if they don’t, and $2.45 becomes new resistance, “look out below as a measured move from the $2.45 to $2.95 channel of the last few months suggests $1.95 could potentially be tested down the road.”

Colin, the copper market fears nothing; at least nothing that has gone on lately.  The copper market made a top and has been bear flagging through a bear market since 2011.  WTF are you talking about, 2.45??  Copper is and has been bearish.  Stop whipsawing a world full of MSM reading substance abusers.

Q4 2008 for Gold Stocks?

By Biiwii

The title’s hyperbole aside, back in Q4, 2008 we had what may be the biggest table pounding opportunity ever, as gold stocks outright crashed even as sector and macro fundamentals sky rocketed.  For years now I have written in NFTRH that I would love to see such a combo again.

While it is not yet engaged to even a ‘buy’ yet, let alone a table pounding situation, the combo is progressing as our indicators seem to be falling in line, one-by-one (with a couple holdouts).

While this is just a general post, I will say that it is time to be glad you tuned out the easy Indian Wedding→China Demand→Strong US jobs = inflation = institutional panic into gold style promotions in favor of the old boring view that it is only going to be an oncoming economic issue and attendant loss of confidence that will do the trick.

Can the Fed Do More?

By Steve Saville

It’s not an overstatement to say that over the 6-year period beginning in September-2008, the US Federal Reserve went berserk with its Quantitative Easing (QE). The following chart shows that the US Monetary Base, an indicator of the net quantity of dollars directly created by the Fed*, had a gentle upward slope until around August of 2008, at which point it took off like a rocket. More specifically, the Monetary Base gained about 30% during the 6-year period leading up to September of 2008 and then quintupled (gained 400%) over the next 6 years. Is it therefore fair to say that the Fed has now ‘shot its load’ and will be unable to do much in reaction to the next financial crisis and/or recession?

monetarybase_070715

Continue reading Can the Fed Do More?

Real Reason for Oil’s Dip…

By Tom McClellan

Gold Shows Real Reason for Oil’s Dip

Crude oil prices following gold's pattern
July 07, 2015

Crude oil prices had been hovering around the $60/barrel level since late April 2015, seemingly held at a quiet hover.  But it has just recently broken its hold on that price level, with a move downward that has been attributed to the economic uncertainty in Greece.

Continue reading Real Reason for Oil’s Dip…

‘Dollar’ Fault

By Alhambra Investment Partners

With Greece eliciting full uncertainty across the global financial complex, it isn’t unsurprising to see “dollar” proxies indicating tightness in almost uniform fashion. There isn’t as much a cascade, yet, as there had been in early October and early December last year, but the movement has finally coalesced. The “dollar” world had begun what looks in hindsight a slow turn two months ago. With Greece as the likely central catalyst, European banks are probably leading with increasing volatility estimates, reigning back liquidity including and especially in the global “dollar” short.

Copper, which had first picked up the rising angst, is back down to where it was near the low of early February – selling off especially hard this morning as the “dollar” accelerated.

ABOOK July 2015 Dollar Copper Continue reading ‘Dollar’ Fault

Austrian Economics…

By Steve Saville

Does “Austrian Economics” Predict Inflation or Deflation?

The answer to the above question is no, meaning that “Austrian Economics” makes no prediction about whether the future will be inflationary or deflationary. That’s why some adherents to “Austrian” economic theory predict inflation while others predict deflation. A good economic theory can give you insights into the likely short-term, long-term, direct and indirect effects of policy choices, but it doesn’t tell you what will happen regardless of future choices and events. I’ll try to explain using two well-known quotes from Ludwig von Mises, the most important economist of the “Austrian” school.

Here’s the first quote:

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

Continue reading Austrian Economics…

One of These PMI’s…

By Alhambra Investment Partners

One Of These PMI’s Is Not Like The Others

The ISM Manufacturing PMI for June was up to 53.5 which was the best monthly showing this year. That has been taken as inarguable insistence that the US factory sector is doing what economists expect, even though 53.5 is significantly below both June 2014 and the 12-month average (which includes four months beginning February below 53) of 54.7. As usual, the PMI is abused as to what it may actually mean:

U.S. manufacturers ended the second quarter on stable footing, reporting a strong flow of orders that could help support the overall economy in coming months.

The Institute for Supply Management on Wednesday said its purchasing managers’ index edged up to 53.5 in June from 52.8 in May. The index, based on a survey of supply-chain executives, is back up to its January reading after stalling in the early spring. A reading above 50 denotes expansion in the sector.

“Manufacturing is over its winter hump,” said Ward McCarthy, chief financial economist at Jefferies, pointing to first-quarter drags from the bad weather and shipping delays caused by the West Coast port slowdown.

That proclamation from the credentialed economist looks strikingly overwrought in light of highly contradictory and contractionary information about factory orders, which sank 8% in May. Even if the ISM PMI is correct about June being better it isn’t appearing so significant in its inflection as to erase all 8% to just get back to zero.

ABOOK July 2015 Factory Orders NSA Continue reading One of These PMI’s…

US Dollar’s Wave 3…

By Elliott Wave International

The US Dollar’s 2014-2015 Rally: Wave 3 in Action

An excerpt from our free 14-page report shows you how the Elliott Wave Principle can “Boost Your Forex Success”

I always say trading forex markets is like riding a bike — except that said bike has one flat tire and the ground beneath it is covered in ice.

So why are they so popular, you might ask? In fact, forex is the most liquid market on earth, where trillions of dollars change millions of hands every day.

The reason people are so willing to ride that bike — so to speak — is because if you can stay on, the rewards are often unmatched. The trick, of course, is staying on.

There’s no such thing as a fool-proof strategy. Slips and scrapes are bound to happen. But as the title of Elliott Wave International’s chief currency strategist Jim Martens’ go-to guide reveals, there is definitely a way “The Elliott Wave Principle Can Boost Your Forex Success.”

Here below, you can read an exclusive excerpt from Chapter 1:

Chapter 1: A Useful Trading Methodology

Of the many ways the Wave Principle can improve trading success, for me, points 1, 2, and 6 are the most important. I like to trade with the trend, and the Wave Principle allows me to identify that trend…

Continue reading US Dollar’s Wave 3…

Justified

By Biiwii

Not really sure what Chris is singing about here.  Indeed, I am usually clueless on most of the songs.  Whatever it’s about, the thing rocks pretty good I think.  Gets the kinks out for a long weekend.

Justified (mp3)

“protectors of society, we don’t want your notoriety…”  Meh, a little corny for my taste but he’s the only lyricist we got.  :-)

[edit] From what I can tell the lyrics on 2 Birds are really cool though.

 

QQQ Volume Spikes…

By Tom McClellan

QQQ Volume Spikes on Selloff

QQQ volume as percentage of shares outstanding
July 02, 2015

When the situation in Greece came to a head over the past weekend, traders responded with one of the biggest one-day selloffs we have seen in recent months.  It was not actually a big day in absolute terms, but compared to what we have become used to lately, it was a pretty scary day.

Continue reading QQQ Volume Spikes…

Ritholtz on Gold

By Biiwii

I linked Barry Ritholtz’s gold bug swipe along with other items in an Around the Web post.  Anything linked (or republished from guests for that matter) on this site is to be taken as 100% their view, not mine.  You, the reader are tasked with using your own brain to consider, discount or ignore any of it as you see fit.

What do I think of Ritholtz’s view on gold, personally?  I think ole’ Barry is picking some easy, low hanging fruit to use up virtual ink over at Bloomberg, per his contract (real or implied).  I mean really, gold did not react to Greece and he takes that as a negative for the metal?

The fact that gold did not do what legions of promoters and fear mongering pitch men insist it is supposed to do is a positive, not a negative.  It brings us closer to the resolution of the bear market as opposed to delaying it with fear mongering promotions (ref. last summer’s Russia-Ukraine-Ebola triple play of unsound ‘fundamentals’).

Gold Shrugs Off Armageddon

“I thought gold was an investor’s best friend during Armageddon.”

Really Barry, I think that you have gotten caught up in a personal ‘back and forth’ with the more unsavory of the gold bug “community”, as Daddy Gold Bug Jim Sinclair calls it.  You are using the same cartoons in reverse that the worst of the “community” uses when it tries to stir fear and greed in naive cult members followers.

As those of us who actually care about reality (as opposed to media-driven hype) have tried to point out repeatedly over the years, gold is not about Armageddon (Bird Flu, Ebola, Cyprus, Greece, war, death, destruction or any of that crap).  Gold is simply a marker, a barometer showing the state of confidence in the financial system and its managers (Central Banks) at any given time.

“Further reducing enthusiasm for gold is the gradual improvement of the U.S. economy. Despite forecasts of imminent collapse, the major economic data — including employment, wages, spending, housing, autos and consumer sentiment — have all trended higher over the last five years. Tales of an impending depression were greatly exaggerated.”

I could not agree with you more, Barry.  Back in 2012 we began gauging big breakdowns in the technical case for precious metals and by January of 2013 we (well, NFTRH) cross referenced the ratio of Palladium (cyclical) to Gold (counter cyclical) with a ‘channel check’ of the Semiconductor Equipment industry to put forward a view that an economic bounce – beginning in manufacturing and later to spread out to the services sectors – was likely to come.

I am a gold bug.  I saw the “improvement of the U.S. economy” when it was appropriate to see it, ahead of time.  When you obsess on the other kind of gold bug, the media star with the Armageddon-like predictions and inflammatory ‘analysis’, or Kool-Aid drinking hate mailers, you do a disservice to your readership because you only present the other side of something that is not real to begin with.  You in essence stand up a Straw Man and periodically set fire to him, really to no one’s benefit.

“Regardless, gold seems to [be… jeez msm, edit much?] going nowhere fast. Feel free to send me an e-mail explaining how wrong and stupid I am. I have an archive of all the messages warning me that gold would teach me a lesson in humility. “You’ll see” these e-mails smugly assure me, “your comeuppance will be here any day now.” My plan was to respond to each on its fifth-year anniversary with a chart showing the performance of gold versus all other asset classes and the details of how much money has been lost.”

Gold is going to be relevant again when confidence wanes and the current boom cycle starts to show its age and reveal its unsound origins.  Until then, gold is a dumb rock that people can hold as insurance and nothing more.  That is all it ever was, anyway.  But that does not sell in the mainstream media to mainstream people.  Cartoon-like depictions of half insane Luddites clinging to that dumb rock do.  Media stars lampooning those Luddites do too.