I can’t tell you whether the Fed will raise rates or not on June 15, but it amazes me how short people’s memories are. It was just last December that we had a 25bps rate hike and it almost completely collapsed the markets in January, while precious metals soared.
Does anybody remember January’s stock market crash? We had the worst start to a new year ever.
Gold soared during that same time. See below.
The chance of them raising rates in June is slim, in my opinion, but if they don’t, they will just continue to say July looks like a better time for raising rates and so on each month until the public finally gets it. They can’t raise rates.
It seems that all the Fed has to do is simply mention the possibility of raising rates and the emotional reaction in the markets is all that’s necessary to satisfy the Fed temporarily until they feel like they need to juice the markets again after a complete memory loss by the masses. The American populace is so stupid and easily manipulated, it blows my mind.
The real economy, that’s the one behind all the lies and propaganda from the main stream, continues to crash. The only thing not crashing, ‘yet’, is the stock market due to unprecedented Fed manipulation.
Although, they are losing that battle, since it peaked on April 19th and rolled over, only to recover into a triple top as of today and now should begin a decent towards another cycle low.
Every week we hear about dismal earnings reports from some of the most respected corporations, like Apple, Google, Netflix, etc.
Over the next several days I think the markets will stay idle until the FOMC announcement on June 15th, but regardless of what they do, this could be a major catalyst for a crash in stocks and a jump in precious metals.
The Fed is backed into a corner, again! As a rate hike would cause stocks to fall, just like they did in January and a failure to raise rates would be an admission that the economy is not well enough to handle a rate hike and create a similar reaction.
Then the next big catalyst could be the UK Brexit vote scheduled for June 23. If the UK votes to leave the Euro and EU, all financial hell could break loose globally. So far, based on polling data, the vote is too close to call.
Folks, the next three weeks will be interesting to watch as these events play out. Stay alert and watch your stops.
I want to discuss supply and demand zones as they relate to technical analysis because gold has hit a perfect example of this scenario.
A supply zone is a resistance zone. It’s an area where the price of the security has reached a level where there are more sellers than buyers and the resulting over-supply causes the price goes down.
Inversely, a demand zone is an area of support where there are more buyers than sellers, so price goes up due to the higher demand at that price.
In the chart below, the area represented by the rectangular area is a demand zone. If price falls anywhere within that range, you can expect a bounce back up to higher levels.
The circle shows where gold moved into that demand area this week and we should see a move up out of that zone to higher highs soon.
The stochastic is also signaling extreme oversold conditions and is prime for a move back up.
Stock Market: (SPY) (QQQ)
We’ve had a double top, possibly triple top as of today, in the S&P due to complete manipulation of financial headlines and propaganda from the Fed. A double or triple top is a technical pattern that greatly increases the probability of a downtrend to occur shortly after the top.
The stochastic is showing overbought conditions along with the triple top pattern, so I expect a roll over at this point. But who knows what the Fed can pull out of their hat to keep this sham going. I don’t see stocks going much higher, if at all from this point and I’m betting against it with short positions in the financials.
Energy Stocks: (XLE) (UNG) (USO) (LNG)
Oil hasn’t changed much in the past week and we are still waiting on the final outcome of the OPEC meeting today (Thursday). The chart shows that we are in an overbought situation and we should see a pullback in crude oil soon.
Commodities: (FCX) (JJG) (DBA) (JO)
As mentioned last week, commodities are in a bull market and still have room to continue this current uptrend before this cycle peaks.
(SLW) January 2017 CALLS
(GDX) January 2017 CALLS
(ABX) January 2017 CALLS
(FNV) January 2017 CALLS
(RGLD) January 2017 CALLS
(DBA) January 2017 CALLS
(JJG) January 2017 CALLS
(SPY) December 2016 PUTS
(IYF) August 2016 PUTS
Watters' World: Memorial Day edition
The following video interview with the American populace is another example of how far our educational system has failed. Question: ‘Who won the Civil War?’ Answer: ‘Russia’?????