DOLLAR MILKSHAKE WAS WRONG! PETER SCHIFF WAS RIGHT 2.0!RATE CUTS AND 'NIRP'!
DOLLAR MILKSHAKE THEORY RELIED ON RATE HIKES AND QUANTITATIVE TIGHTENING!
U$D IS NOT THE CLEANEST DIRTY SHIRT IN THE HAMPER!
Nirp
EURJPY: Interesting triangle spottedWe have a good opportunity on the long side here, brewing behind the scenes. We are looking for bears to lose steam, and the pair to slow down, to go long on strength. This decrease of the ATR values shows momentum's waning, meaning that the market has been one sided for a while (in this case, the last leg of selling slowing down). We can follow the 'path of least resistance' which is indicated by RgMov, which in this case, gives us a bullish outlook as more favorable.
Failure to hit 113.253 by the close of the 21st will confirm that the bears are losing steam, further validating this trade idea. We can either take a new daily high as long entry, risking a drop to the recent lowest low after today's close, or we can wait for the timer to expire and bears to fail reach the target to enter longs on strength.
Keep an eye on the BOJ this week, the move out of this triangle will be quite sizeable.
Good luck,
Ivan Labrie.
10 Year Treasury Note futures - Go long on a new daily highWe have a nice setup here in the bond market, we can look to go long on a break of yesterday's high with stops under the 129 mark ideally.
It seems like we can rally forcefully to reach 130'27 in a few days.
You can also play this one going long TLT during the US session.
If interested in my trading signals, or in personal tuition, contact me privately. I'm offering a considerable discount on a packaged course which includes access to my private trading signals list for a year.
Cheers,
Ivan Labrie.
Dax: Interesting time at mode signalsI'm monitoring the progress in the Dax index's uptrend currently in place.
Price action has became turbulent recently, forming a large triangle, but it's possible to see an interesting resolution to this situation soon.
The time at mode signals on chart imply a potential advance is due, if we get confirmation with a day opening and closing above the 9780 without retesting this level.
The first vertical line is the time expiration of the first uptrend, and it might an important date, so take heed of it.
Implications are bearish, based on the RgMov indicator's trend, and the price action, with distribution coming in at these levels.
Once we get a safe entry, I'll update the chart. For the time being, let's watch the next daily candle on close.
It's possible that the short side offers a more significant move, and since it appears like the Euro is due to rally higher still.
If 10249 isn't reached by March 25th, on close or earlier, price will probably seek a retest of the uptrend mode support.
In case we do rally, pay attention to the upper time and price targets.
Best regards,
Ivan Labrie.
Gold Miners Could Pullback Before Resumption of Trend.Gold prices have been volatile, flucuating between $1,275 and $1,220 as markets remain indecisive on what stance to take: is the Federal Reserve going to continue hiking assuming the economy will "gradually improve," or with traders continue to look for safer locations to place there cash?
According to recent capital flow data, the GLD has seen redemption as market participants choose to overlook the weakening global economy and its implications. Nevertheless, with inflows into risk ETFs like SPY and HYG, gold miners could see their shares pull back from this historic gold run.
Technically, after GDX broke out of a longer-term downtrend, price action began to oscillate within a narrow ascending channel. Prices are likely to pullback to channel and price action support of $19.80, while a confirmed break (or daily close below support), miners could fall to $18.85 and, potentially, $17.85 - also nearing the 50-day EMA.
However, if the popular mining ETFs can remain above support, price action could challenge $21.88 and $23.03.
Overall price action and trend momentum still remain rather supportive to the upside.
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GOLD in a NIRP World!This chart shows overall gold trend and has resistance and support levels that I believe it'll be hitting on it's way higher. $1595 by 2nd to 3rd quarter 2017.
Gold to $8,000?Despite what so-called gold bugs have been trying to predict for years, it still remains seen how valuable the most "hated" asset on Wall Street can be. Calls of $10- or $50,000 gold have made headlines and often laughs, but when investors take into account the supporting fundamentals, gold can be extremely beneficial during these centrally-planned economies.
Recently, Pierre Lassonde said that gold could have the potential to reach $8,000 per ounce when looking at the gold-to-Dow ratio. He mentions how tangible assets tend to regain parity after previous bull-markets, and the potential for his forecast is supported if the gold-to-Dow ratio his .5 while expressing that the quick and expansive adaptation of NIRP will fuel the fire.
As central banks continue to ease ($12.3 trillion in quantitative easing and 650 rate cuts since the financial crisis), there is a potential for a prolonged bull market in gold. As I noted in "Demand for Gold Rockets Higher ," if the renewed momentum were to match nominal gains investors seen between 2009-2011, spot prices would near $2,230 - which is not $8,000 but very respectable.
The 1.61 Fib. extension from the current multi-year low and the 2011 high is $2,460.
In " Gold Looks Promising Long Term ," I posted last February that the longer-term outlook for the yellow metal remains in tact. Price action continued to trend in the descending channel until it bottomed in December.
What strengthens the cased for renewed optimism is that price action convincingly broke out of the descending channel and back above the 2003 trend line.
In " Gold to Retest $1,130 as Dollar Strengthens ," I pointed out last March that the dollar strengthening is trouble and the velocity of such would be meaningful. As we've seen throughout last year, U.S. multinationals have been crushed due to the strength in the DXY,
I also pointed out the descending wedge on the daily chart, which is a bullish reversal pattern. After finding support where I thought the last line of defense was before $1,000 oz., gold rallied hard and broke out.
However, even through wedges are strong indicators of price reversals, the real test is that price tends to quickly retest the broken resistance. If that hold, it could be off to the races.
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EURCHF At Key Technical Level Prior to ECB MeetingThe Swiss franc has seen some action as traders move in and out of safe-haven assets, no matter what the Swiss National Bank implements (franc futures has a .82 correlation with gold).
With the ECB hinting that more quantitative easing is possible ahead of the rate decision March 10, the SNB may feel obliged to intervene to stop any significant appreciation in the franc. Thomas Jordan, Governor of the SNB, has said that negative interest rates have their limit; so, probable line if action would be a direct FX intervention.
Traders are not pricing in any significant change in monetary policy from the ECB, so that may cause the EURCHF to rebound from its oversold, intraday position.
Price action is stagnating within a demand zone, and minor upside potential to 1.0935 and 1.0960 is seen leading into March. However, I don't foresee the SNB doing anything drastic (which may be highly dependent on the lengths the ECB is willing to go).
I expect future near-term CHF strength, causing price action to test the bottom of the demand zone. If this breaks, expect the pair to trade lower to 1.0860.
If the risk environment worsens, gold could trigger more safe-haven demand pushing EURCHF to 1.0830.
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Update status
EURUSD: Update and Key Hidden LevelsIn this chart I describe the current estimated trayectory for the Euro.
I expect a brieft retracement, if we were to move above the last daily high, crossing the recent FOMC minutes release Key Level, and go to test the low volume resistance levels above, and eventually test the top FOMC key levels if said resistances fail to hold.
It's possible to go long above the last daily high using a tight stop, and closing and flipping short when we approach the overhead resistance.
I outlined two potential paths EURUSD might follow, and in both cases, I'm expecting monthly and quarterly downtrend continuation as we break all FOMC support levels on the way down.
Check related ideas for my previous charts covering this pair, and also check the EURCHF posted by my friend Tom Killick, might be a nice pair to add to your portfolio to profit from this expected Euro meltdown that I forecast here.
Cheers,
Ivan Labrie.
Gold Intraday TechnicalsGold has pulled back slightly, but still up almost 15 percent since 2016. Traders don't believe the current rally as they look hopeful of more central bank quantitative easing, which is exactly why gold has had its run this year; and it is why I have been saying fundamentals have been strengthening for gold for roughly 16 months.
After gold volatility hit multi-year highs, it is beginning to moderate a bit. I expect it to remain elevated:
Technically, gold downside may remain limited with minor trend and price support at $1,205 and dynamic support at the 72-4H EMA nearing $1,198. Deeper support levels are seen at $1,190 and $1,177.
Volume has tapered off since the Feb. 11 high, but positive bars still remain on top. Near-term resistance can be seen at $1,214, while stronger resistance is $1,220. If gold can retake these levels, price action would challenge the recent downtrend from the recent high. At that point, bulls can look toward $1,240.
What has been beneficial is that gold has been able to work off its highly overbought level while still remaining about key support.
This Friday, traders are anticipating the US preliminary GDP print. Consensus is at a nauseating .4 percent, following Q4 .7 percent that is likely to be revised lower. Even if the prelim data meets consensus, it would be over two percent lower than the Atlanta Fed's GDPNow model.
Not only is it ironic that the Federal Reserve's first rate high in seven years was in a corporate profits recession and sub-one percent growth, but it also could have been done going into a recession.
Way to go, Janet!
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Will the BoJ Increase QE In Two Weeks? Doesn't Matter.With markets on edge and Japanese inflation data this week, those short the yen are hoping the Bank of Japan Governor, Haruhiko " Kamikaze " Kuroda, will further increase the balance sheet through more quantitative easing. Because when everything else fails, he'll try to go all in.
Or will he? Essentially, his brilliant idea to implement negative rates, or NIRP, was seen as a policy error even quicker than the Fed's first rate hike in seven years. Economists, bulls and bears alike, said that NIRP would do absolutely nothing for the Japanese economy. But, Kuroda didn't go from no NIRP to NIRP in a week's time to strengthen the economy. It was to deter yen strength and perk up hemorrhaging risk assets, which failed miserably.
If inflation data comes in soft, we are likely to hear the threat of quantitative easing but it is unlikely that the BoJ can match the most bang for the yen traders saw when this whole quasi-policy began. Analysts expect that Kuroda may increase the level of exchange-traded funds, a market where the BoJ already owns 52 percent , since there is virtually no more debt to purchase do to existing quantitative easing measures.
It's possible, but does not matter in the end. The global marco downturn is in the drivers seat, and a single central bank cannot change that, especially when $12.3 trillion in QE and 600-plus rate cuts since the financial crisis have barely kept the global economy spuddering along.
With global trade continuing to collapse, the weak yen facade is crumbling. January's exports fell a whopping 12.9 percent and imports dropping 18 percent. GDP contracted 1.5 percent in 2015 on an annual basis, and Japan has seen three recessions since PM Shinzo Abe took over in 2012.
External debt and the BoJ balance sheet hit all-time highs (unlike the Nikkei) .
Those nickel-and-diming headlines - be careful. As we've seen in February alone, the actions of the BoJ erased nearly eight months of gains.
Do macro, or macro will do you HARD.
I reiterate a target of 110 by Q3 and 105 by early-2017. That will likely be for starters if the US falls into recession, as forecasted . Potential pullbacks to 114.55 and 116 on central bank induced risk taking probable.
The problem with this crusade for inflation, and this goes for all central banks, by reckless measures is fiscal calamity will arise when inflation takes hold. Rates will have to increase, and debt will not be payable.
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