The Lunatic Fringe - Market and Trade Chat

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Looking to add a small piece today. Like a big gap down in the Silver miners this morning. MAG.
Dollar dropping, reversing this morning's London bludgeoning in the metals. might be a reversal point and a reasonable time to nibble.
 
Spot gold broke below 1940 support. Gold futures, however, are holding the recent low. Which do you believe?

Zed, what do you trade based off of in a situation like this? Ignore the support breakage in spot, and watch gold futures? Or trade it as if spot gold broke below 1940 support. Gold futures however, are holding the recent low. Which do you use?
Sitting on a knife’s edge…
Any other traders opinion?
 
GC Daily - Looking stronger off support this time around. Still plenty of overhead but could be worse @ this point.

 
Zed, what do you trade based off of in a situation like this?

I'm looking at the divergences in the Rate Of Change, Momentum etc and viewing them as having a positive divergence. Also things like today's volume (up) spiked a little on a long tail candle, again skewing me +ve. IMO we are in a similar setup to 23 March. Feeling OK about things, but always nervous as I do have a +ve gold bias... it's a disease but I know I have it.
 
 
It's not just Wheat but Corn and Soybeans both just exploded. Both are in Backwardation which helps the ETF's as well. Should have bought those instead. But for anyone who thinks inflation is over you are a fool.

 
GC Weekly - Long tailed weekly candles are more typically a bullish indication for gold. We came off support with reasonable strength this week. We have some overhead here but it still looks more +ve than -ve to me.

 
Bullish or not, Gold seems so tepid right now.
With the Fed meeting last week and options exp. Friday, I suspect that had quite a bit to do with it. Yet it still bugs me.
I would like to see a very strong Tuesday to really put any faith in this being a decent bullish move. ( Since the market is closed Monday)
 
I think it will be a struggle until we close a week up over 2050 or so, 2025 at the least. --> JMO
 
Why?

What signal in your trading system says 'Sell'?
There is a trailing stop loss at about $5 where you can see a little plus sign (+) on that last red bar. It closed the week below the stop loss and so it is a sell.
 
 
^^^^^^^^^
The stop loss levels for Nick Radge's Weekend Trend trader work as I just posted above. Yes, I have backtested the system and it works great over time. Nick has stated that making the stop loss levels tighter makes the system work worse.

Also, no one trade matters that much. What we care about is the sum of all trades. Over time we shall do well.
 
Don't tell me you an inflation is ONLY a monetary thing. Inflation as most people see it is the prices of things they buy increasing.

So what? Confusing a potential symptom with the disease doesn't help you identify the disease. Calling people that can identify the disease fools because a symptom is present but caused by a different issue is somehow wise/warranted?

The evidence is that we have a deflationary impulse underway, that isn't always going to be reflected in CPI or any specific price level in a timely fashion.
 

Supply and Demand can still cause inflation. Unless you have a better term for differentiating different types of inflation. But that is useless because you could never breakout how much was caused by each underlying effect.

If we were to vaporize all the wheat on the planet wheat prices would go parabolic. The money supply did not instantly change, the supply of the goods changed. Too much money chasing Too few goods has TWO very distinct variables.

There is also a third type that Martin Armstrong discusses but it's a bit more nuanced as well. It mostly reflects the demand for the money itself, ie Confidence. If Nothing changes in Either money supply or product supply but people simply STOP wanting dollars prices will still Increase.
 
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I think I'm going to go long Nat Gas now too. It took a long slow process to build a base but it looks bullish now to me. This is a chart of NatGas / Oil price (which reached a near record low). Looks like an inverse H&S pattern nearly confirmed and points to at least 0.06. Which with a $70 WTIC price would be $4.20 Nat gas. $3.91 looks like the first technical resistance.

 
Seems as if those Nat Gas trackers played a little catch up this week with the price of the underlying. Definitely worth a little bit of money I would like to see at least some retracement here.
 

The problem is that the word inflation has become synonymous with rising prices due to the way it is used in the media etc. Supply and demand for any given good may drive the price higher but it's not inflation.

Inflation/deflation is a money supply issue that may impact price. It does it with a delay and it doesn't always hit the prices that cause us pain. We've just lived through 25+ years of inflation driving asset prices disproportionately higher. Of course that isn't 'inflation' in the popular press, that is simply a wide spread out break of investment genius.

Anyway... right now we have plenty of evidence that we have a deflationary impulse underway. The discussion should be around what part of the money supply is contracting and in what order that impacts the economy. Right now the PPI is in inarguable decline which is also reflected in the trend in oil prices etc. Credit is the most volatile part of the money supply, as it deflates with the application of eye wateringly fast interest rate rises it will impact all things that are in credit dependent markets first. Say for an example we are increasing the base money supply at the same time you could generate cost pressure in the cash economy while the total money supply is shrinking. These things are not hardwired together.

So yeah, costs might be rising but calling it all inflation all the time doesn't help anyone save for maybe the central wankers.

Really we need to understand what part of the money supply is doing changing and what that means in the real world. To add to the confusion we are also talking about a relative level. An expanding money supply is only really inflation if it out strips the productive capacity of the economy. Of course measuring that is next to impossible, doubly so with our 'goobermint' metrics... so that debate will never end.

For now it looks like we are headed into a credit crunch aka a slower deflation in the credit portion of the money supply accelerates to a point of crisis... 2008 style. My immediate worry is that we are looking at another period where all assets go out the window, gold included. Opportunity will arise for sure but first we have to avoid being caught up in the accident. Considering it looks like this brush fire is in the banking system and quietly growing it may not be that easy to avoid.

I dunno...

How much is left in the FDIC's fighting fund? 1 or 2% of what might be needed? Print some more to solve that issue? That might really hit street level pricing.

... but who knows. I don't.

Shutup Zed...

OK.
 
Even Steve mixes and mashes the term inflation, the argument becomes much clearer when you separate the terms. CPI is one possible measure of inflation, it isn't inflation. In the same way a cough isn't a virus, just one possible symptom of a virus.

 
In the eleventh edition of Merriam-Websters Collegiate Dictionary, inflation was no longer defined as an expansion in money and credit.

This shift has happened over the last 100 years, it basically serves to obfuscate the activities of Central Bankers and their impact on the economy. The current widely used definition of inflation muddies the water surrounding the phenomenon to such an extent it is impossible to have a clear debate about the actual mechanics of the situation. This is just another example of language being used against us, you can see it all the time in the modern political landscape. Terms like "climate change" have been weaponized and basically redefined to mean something that they never did. This serves to make any clear debate surrounding the topic harder and harder... all the terms end up loaded to weigh in the favor of those that want to confuse the issues. Inflation was one of the first terms I can recall that underwent this process.
 
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