Gold was pushed back below resistance
We kick off issue #666 (get a grip) with this Shirelles ’61 hit: “Mom said there will be days like this…”–[Dixon/Denson]. And verily, oh woe is our gold!
Admittedly (or perhaps more conservatively, “arguably”), gold’s price drop was our reckless writing a week ago “…if the contract volume stays on a diet [which it has]in the short term we can see a drop in price to 1790 and back [for Silver] under 20…”
Price fell further yesterday (Friday) to as low as 1759, gold ended the week at 1760. Worse still for silver with its price north of 20 early Wednesday but also with its ‘baby blues’ of the regression trend consistency After turning south, we wrote in the forward-looking commentary of the day “…19 fatalities are not out of range given the typical enforcement of this measure…”. Dead indeed, silver fell to 18.93 yesterday. Going forward, simply trading to help the precious metals is probably our best course of action keep your mouth shut.
Either way, shut down The price of gold was sufficient in the past week to level off the year 1760 under the resistance zone from 1779-1854. That is Not Good in the minds of the pure technicians, who in turn may think a retest is in the region of the 1678 yearly low. Of course, fundamentalists roll their eyes at Gold’s opening scoreboard rating currently at 4015, belying any notion of 1678 as pure poppy. But be it lack of interest in property, the malignancy of the “M word” amount and/or ignorance of currency’s worthlessness, the market is never wrong, this year’s previous support band (below in yellow) remain converted into resistance:
Soberly speaking, it’s too early to tell about gold weekly Bars which is the young parabolic long trend [as yet] in danger. But to keep perspective, 15 weeks of decline for gold year-to-date, last week ranks fourth worst (-3.2%, thank you dollar, dear dollar); It’s not what we’d like to see in such a long trend:
“But a dip shopper’s dream, mmb?”
Squire, gold this past ten years was a “Dip Buyer’s Dream”; the problem is: there are no buyers. After all, why own a heavy lump of barely moving metal when you can be it instead “In With the Crowd”–[Dobie Gray, ’65] by donating your hard-earned savings to such sexy elite stocks as Coinbase, Bed Bath and Beyond, and The RealReal (whatever that is). Alive and Healthy is the Investing Age of Stoopid:
Uh, corrections mate. your shares “was” Soup, “if” Last Tuesday’s high in the S&P 4325 marks the end of the reverse climb within the broader descent to at least retest the index’s 3600-3200 support zone. With the S&P trading at 4228 today and Q2 earnings season just ending yesterday:
■ “Live” price-to-earnings ratio (37.6x) remains +40% above its lifetime average (22.4x);
■ Index return is 1.516% versus 3.116% for the five-year T-Note (and the latter suffers no monetary loss at maturity…unless the US Treasury defaults, which would likely shut down global markets indefinitely); and
■ The StateSide economy continues to sputter:
Oh, to be sure, there were a few economic ones bright spots for last week’s baro: the Philly Fed index switched from contraction to growth in August and industrial production rose in July after flat in June. But there were those too weak pears: August’s New York State Empire Index suffered second worst negative swing in the 19-year history of reading; four major housing projects fell and retail sales were flat in July. Also according to the consensus, next week’s 10 incoming Econ Baro metrics are “expected” on balance to be worse. Perhaps the “recession” – which was officially recognized after six months, only to be declared non-existent a week later – still exists. “Have you got any gold?” (Apparently no one does that in the above investing age…yet…)
Yet he illogically defies such an economic reality “Fed officials see need for more rate hikes but less certainty on target” announced Dow Jones Newswires after the release of minutes of the Federal Open Market Committee last Wednesday for its July 26-27 meeting. Still, the “good news” (if you will allow me) that emerges from the minutes is that the Federal Reserve is facing a loss which, as you know, can lead to bankruptcy for a private company (like the Fed). (Just something to think about…)
Certainly not amusing was S&P’s report last Tuesday that Experian’s consumer credit default index rose for the eighth straight month and beyond Defaults on first mortgages accelerated at the fastest rate since September 2020 when the perma virus was in full swing.
Speaking of which, rising COVID cases coupled with declining economic data in the PRC led to a cut in the People’s Bank of China lending rate. But on the other side of the Sea of Japan, the latter’s economy strengthened in the second quarter, it said “Pre-Pandemic Greatness”. Still, with winter just around the corner and the CCC (“COVID Control Crowd”) rubbing them right to exist Hands together, we’ll see… Then there’s Europe, where, as long as everyone’s holiday weather lasts for several months, nobody gives anything derriere du rat.
Apparently Not Gold’s “Baby Blues” are trendy consistency as we see next on the left Across the three months of daily bars, if the blues crashes +80% like last Wednesday, the price rule is goodbye. And as for the 10-day market profile On the right sideif the participation bar with the lowest volume is white, you know it’s a at least two-week closing low:
Furthermore, silver’s similar chart, as has been the case for the past few months, looks pretty much the same as gold’s. Earlier we referred to the aftermath of her own “Baby Blues” (bottom left) with yesterday’s statement at the bottom of their profile (bottom right):
To wrap up amidst the dog days of August for this week, we have three oddities:
■ Last Tuesday, the Q2 earnings results for Walmart were widely reported “released fears”. Since we log such results on an ongoing basis, we have decided to check this. and oh my they were worse than recorded for Q2 a year ago. “But they beat estimates, mmb…” (With a wink there’s our man Squire…);
■ Then this came from the “Income no longer matters Dept.” As reported by FinTimes: “Quant funds support market rally by increasing bets on US stocks.” Did we mention that the Stoopid investing age is alive and well?
■ But it gets worseruns with DJNR last Thursday “Wall Street bets the Fed is bluffing in the high-stakes inflation game”, ie the Fed keeps talking the hawk but will not be able to follow that talk. Central bank integrity? Path. (No surprise).
But don’t be surprised; instead of this, Get some gold! And don’t forget what…
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