Stock Market Strategy: No change still looking for higher equity prices.
Precious Metals Outlook: Major uptrend intact albeit under pressure. No change in bullish investment thesis. Pressure typical this time of month as futures and options expire. Expect pressure to lift after July 30th.
Thoughts on the price movement of Gold from trusted sources…
Adrian Douglas:
There are 176,066 contracts of Open Interest in the Gold August contract. This is 17.6 Mozs. This is large for this time of the month and no doubt the continual bashing of gold as seen today is to encourage liquidation over rolling or standing for delivery. First notice day is July 30 by which time these contracts need to be rolled, sold or fully paid for if they are standing for delivery.
Fleckenstein: The next few days might set up a buying opportunity in the metals complex
Gold itself has been weak and was further pressured today by option expiration and First Notice day in the futures market, which oftentimes can be a minor inflection point. My contacts in the gold market said that a lot of “negative whip” exists at the moment due to the size of the open interest, especially in the option market. Thus, they said that a large spike lower could easily occur in the next couple of days, though if that happens it may reverse just as fast.
This is the time of year where weakness in gold is not unusual. I hadn’t quite expected it to play out like this, because it seemed so predictable, but sometimes the obvious does in fact occur. The next few days might set up a buying opportunity in the metals complex, but we will have to see.
It’s the 50% Off Sale – Just for a Few Days More – So Hurry (Click Link for Charts)
Don’t you just get sick of those annoying commercials always throwing some ‘50% off’ hype into the mix of their pitch – just to get you to come in and give them your money? I do.
Well, there is something about 50% and gold and, tell you what, it’s not hype.
This large chart is a single chart of 4 charts….all glued together. It begins with the C and D waves of the previous ABCD gold pattern in 2009. The second chart moves a step forward in time to look at the A and B waves of our current ABCD gold wave pattern. The third chart progresses another step forward in time to focus on the two weekly cycles of our current C wave. The fourth and final chart focuses on the weekly cycle that is Weekly Cycle #2 – which is the current weekly cycle we most likely conclude either today or tomorrow.
Why will it likely conclude today or tomorrow you ask? Well, because we have (or will have) retraced 50% of the cycle. The magic number is 1154, or close to it.
Now I did not make this stuff up. Believe you me, I am nowhere near smart enough to make this stuff up. But there it is. And I think it is simply astounding.
Credit update by MJ The Credit Guru… Equity remains cheap to credit. The CDX IG14 Index traded in the 102.5bps range yesterday afternoon and could easily break through the 100bps psychological level and stay there. (It did this morning.) The positive reaction AA CDS is likely to have given the performance of its new bond deal, as well as the performance of APC CDS is likely to drive the outperformance. The last time the CDX index traded below 100bps the SPX was at 1171…


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