With gold and the buck, as I said, you’re lucky
As for the Q3 earnings season, it just ended like this: For the S&P 500, 80% of the reporting companies exceeded both the estimates and the results of the previous period. It is rare for the latter to keep up with the former. In general, however, 1,440 other midsize and smaller businesses according to our table found that only 56% actually improved from the closure period in Q3 2020. That’s a uh-oh …
But overall: great economic data (arguably inflationary, but not real) + great earnings (by estimates, but not always actual growth) = S&P 500 all-time highs. In addition, money is pouring into the stock market, as the S&P Moneyflow page of the site says, “Let’s all buy high!” That is quite extraordinary.
“Well then maybe this is a blow-off top, mmb …”
Squire, we stopped counting the number of wannabe S&P blow-off tops a long time ago. Remember, as we have pointed out here for many years, this is now the age of the stock market, which is the Great American Savings Account. “You have to be IN!” They say. “Gold is for the AM!” They say. And then there is the annoying individual splash: “I bought X back from blah and now I’m doing BLAH!” For whom we have this important reminder: The market capitalization of the S&P 500 on Friday evening was 41.4 trillion US dollars; nevertheless, the US’s liquid M2 money supply is only half as large at US $ 21.4 trillion. So if it all goes wrong, good luck getting out with something.
Meanwhile, we’ve read that a record number of StateSide workers are quitting their jobs because they assume they can do something better. Watch out for this great “There is a better way!” Mania. and “My stocks are so high!” finally ends with “What did I think?”
Then from the department “We knew this was coming”. It only seems a few weeks before Treasury Secretary Janet “Old Yeller” Yellen has to re-establish the legislature because she is running out of dough to get the country going. For the sake of common sense: “Got gold?” Hopefully, if the Fed chairman passes to Lael “The Brain” Brainard, she and the Treasury Secretary can fix things. (See also: “In Like Flint,” 20th Century Fox, ’67).
From steel flint to a tiny loss of glitter currently describes our precious metals. According to the graphic below with two fields, we can see a certain topping pattern in the daily bar on the left, but again with structural support that is still well within the 19th century. Clearly, on the right hand side of gold’s 10-day market profile, 1864 is the dominant price that has been trading for the past two weeks: