Intraday Market Thoughts Archives

There are a dozen of several solid "perfect" explanations for the protracted USD decline and the explosive push up in metals and indices. Some have pointed to the rounded top in DXY, others to the lower highs in bond yields, while others assert the importance of mid-term elections seasonals and how November is the best time for equities in the 2nd presidential cycle. How about our repeated assertions of higher lows in silver, copper and palladium acted as a leading signal for a looming rally in gold. All of that works. Our recent video showed how the 10yr/3mth was accurate in timing the end of Fed hikes helped. It does not matter whether the Fed will hike again in December. More importantly, it is the lower magnitude of the upcoming rate hike-- whose impact on the Yield Spread is similar to a no-hike--that is more material for market impact. See the historicals and the timing of the video here again. There is another chart, which was shared with our WhatsApp Broadcast Group on the day of the Gold Explosion-USD-Collapse. Read more below (not the chart immediately below but the one under it).

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The chart below (XME/XLE vs XAUUSD) was posted on November 8th, moments before gold "took off". The most important part of this chart was not stated on the original tweet. But here is what we told our WhatsApp Broadcast Group when we shared the chart with them: The small red horizontal line (Dec 2016) was followed by gold rallying on the 8th week (8th yellow candle), coinciding lift-off in the RSI of the XME/XLE. The same development emerged this week.  If that's too obscure of an indicator, that is OK. But there was a reason why I chose to time the sharing of the chart with our WBG members. As for the above USDCAD chart, it is self explanatory. Now we wait for Fed members to come next week to warn on how more should be done to bring down inflation. But will they walk such talk in December? 

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