2020 Year End Market Summary

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  • Fri, Jan 01, 2021 - 12:14am

    #1
    davefairtex

    davefairtex

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    2020 Year End Market Summary

On New Years Eve, gold inched up +2.77 [+0.15%] to 1904.07 on moderately light volume, while silver fell -0.29 [-1.08%] to 26.55 on moderately light volume. The buck moved higher [+0.27%], SPX rallied also [+0.64%], as did crude [+0.25%], and bonds [the 10-Year yield fell -1.0 bp].

The sector map shows silver leading gold higher, with the miners trailing somewhat. Both gold/Euros and the senior miners remain below both the 50 and 200 MA lines, and gold/Euros has executed a “death cross” – the 50 MA crossed over the 200 MA to the downside. That’s not a good sign, and it suggests that a decline in the buck is what is keeping gold/USD afloat. Copper may be starting to correct.

In December, gold jumped higher, up +123.56 [+6.94%] to 1904.07 on moderately light volume. The long white candle was unrated, forecaster climbed, rising into an uptrend. Gold is in an uptrend in the weekly and monthly timeframes.

Gold/euros rallied +66.48 [+4.46%] to 1556.70 on moderately light volume. The long white candle was a probable bullish reversal (56%), forecaster climbed, rising into an uptrend. Gold/euros is in an uptrend in the weekly and monthly timeframes.

COMEX GC open interest fell -664 contracts on Friday, and rose +16K contracts this month. That was 5 days of global annual production in new paper added to the market. Current open interest for GC: 52% of global annual production, up +1.49% this month. 20937 GC contracts stood for delivery at COMEX this month.

While there was a reasonably large amount of shorting this month in silver, overall silver’s uptrend looks substantially stronger than gold. That said, the last trading day of the year saw some selling – a bit of a warning sign. For the year, silver is up +8.62 [+48%].

Silver screamed higher, up +3.83 [+16.86%] to 26.55 on moderately light volume. The bullish engulfing candle was a probable bullish reversal (74%), forecaster climbed, moving higher into its uptrend. Silver is in an uptrend in the weekly and monthly timeframes.

COMEX SI open interest fell -369 contracts on Friday, and rose +18K contracts this month. That was 37 days of global annual production in new paper added to the market. Current open interest for SI: 98% of global annual production, up +10.14% this month. 5030 SI contracts stood for delivery at COMEX this month.

The gold/silver ratio dropped -6.65 to 71.72.

While there was a reasonably large amount of shorting this month in silver, overall silver’s uptrend looks substantially stronger than gold. That said, the last trading day of the year saw some selling – a bit of a warning sign.

GDX moved up +3.86% on moderate volume, and GDXJ rallied higher +8.41% on moderate volume also. XAU climbed +7.03%, The long white candle was unrated, but forecaster dropped, moving deeper into its downtrend. XAU is in a downtrend in both the daily and monthly timeframes.

The GDX:gold ratio dropped -2.96%, and the GDXJ:GDX ratio climbed +4.20%. That’s – confused.

Compared with the rest of the complex right now, the miners aren’t looking so great – at least according to my tea leaves anyway. The juniors look a bit better, but the entire complex remains a collection of lower highs and lower lows. If the miners tend to lead, they appear to be leading us lower. The one exception are the silver miners; some of them are doing incredibly well. For the year, XAU is up +35%.

Platinum rose +107.69 [+9.98%] to 1079, palladium rose +74.17 [+3.01%] to 2357. Platinum broke out to a new 5-year high this month; platinum also hit a 17 year low back in March – it has had a very wide trading range this year. Platinum’s all time high was 2288 back in 2008. For the year, platinum is up +107 [+11%], and palladium climbed +552 [+29%].

Copper rose +0.09 [+2.62%] to 3.52 on moderately light volume. The long white candle was a bullish continuation, forecaster climbed, moving higher into its uptrend. Copper is in an uptrend in the daily and monthly timeframes.

This month, copper made an 8-year high. And yet, while the monthly chart still looks strong, and the monthly candle print was not bearish, weekly appears to have tipped over. In the shorter term, copper may be forming a lower high.

For the year, copper is up +0.73 [+26%].

The buck fell -1.92 [-2.09%] to 89.88 on light volume. The opening black marubozu candle was a bearish continuation, forecaster fell, dropping into a downtrend. The buck is in a downtrend in all three timeframes.

Major currency moves included: CAD [+1.73%], EUR [+2.32%], GBP [+2.33%], JPY [+1.08%], AUD [+4.54%].

The buck fell to a new 3-year low this month; while it rallied on Friday, it remains in a strong downtrend. At the current pace, the buck will be re-testing the 2018 lows sometime next month.

For the year, the buck is down -6.10 [-6.36%].

Crude rallied +3.35 [+7.42%] to 48.47 on light volume. The swing low candle was a likely bullish reversal (60%), forecaster dropped, but remains in an uptrend. Crude is in an uptrend in all three timeframes.

Crude’s recovery off the pandemic lows continues; it seems to have run into resistance (roughly) at $50. Shorter-term, the current uptrend appears as though it might be faltering – crude remains stronger than copper, but not by much.

For the year, crude is down -12.61 [-21%].

SPX rose +134.44 [+3.71%] to 3756.07 on moderately light volume. The white marubozu candle was a bullish continuation, forecaster dropped, but remains in an uptrend. SPX is in an uptrend in the weekly and monthly timeframes.

Financials [+5.43%] led, along with tech [+5.03%], while utilities [-0.22%] and REITs [+0.16%] did worst. This was a bullish sector map.

The VIX climbed +2.18 to 22.75.

SPX ended the year with a new all time high. Can’t say much more than that. For the year, SPX is up +525 [+16%].

The 10-Year yield rose +8.0 bp to +0.92%. The opening white marubozu candle was unrated, forecaster dropped, but remains in an uptrend. The 10-Year yield is in an uptrend in the weekly and monthly timeframes.

Bond yields continued to rise this month – which means bond prices fell. Nothing is happening quickly though; the Fed bought $3.24 million in treasury bonds this year. For the year, DGS10 is down -92 bp.

Here’s the Fed balance sheet – annual changes since 2000. When we finally build back, what will “better” look like?

Physical Supply

The GLD ETF tonnage on hand dropped -24.04 tons, with 1171 tons remaining in inventory.

ETF Discount to NAV:
* CEF -3.01%
* PHYS -0.82%
* PSLV -2.58%
Gold dealer big bar premiums:
* gold [1kg]: +1.40%
* silver [100 oz]: +4.61%

Physical ETF discounts are moderate right noow; premiums for gold at retail are reasonably strong, while premiums for
silver at retail are weak.

Economic Reports

Fed Balance Sheet: 7363.4B, -40.7B, Liquidity Swaps: 17.9B, +1.1B, Reverse Repos: 205.0B, +8.9B, Treasury Securities: 4688.9B, +6.0B, MBS: 2039.5B, -47.1B. No new record at end of year; net selling, due to MBS.

Nonfarm Payrolls: headline 142.6M, +245K, avg hourly earnings: $30, +0.09, manufacturing: 12.3M, +27K.

Durable Goods, new orders: headline +1.32% m/m, capital goods new orders (excl aircraft): +0.79% m/m, shipments: +1.27% m/m. New orders are just about back to pre-pandemic levels, shipments have completely recovered, and capital goods are way above where we were back in March.

CPI All Urban: headline +0.19% m/m, CPI less-food/energy: +0.22% m/m. CPI is well above the pandemic starting point.
Producer Prices: headline +1.16% m/m (prior +0.26% m/m). Producer prices took another leg higher, and have just about returned to pre-pandemic levels.

Auto/Light Truck Sales: headline -4.67% m/m, Auto Sales: -2.68% m/m, Heavy Truck Sales: -12.62% m/m. Auto sales dipped lower this month, and it wasn’t a small move down.

Retail Sales: headline -0.76% m/m (prior -0.00% m/m), retail sales (ex-autos): -0.94% m/m. It was an unfortunate retail sales report, although sales remain (roughly 7%) above pre-pandemic levels.

Industrial Production: headline +0.39% m/m, manufacturing: +0.79% m/m. Industrial production continues to recover, but very slowly – INDPRO has recovered 70% of the pandemic plunge.

Personal Income: headline -1.14% m/m, Consumer Spending: -0.43% m/m, Core PCE: +0.01% m/m. PI remains above pre-pandemic levels, but continues to fall from the April (stimulus) highs.

Durable Goods, new orders: headline +0.88% m/m, capital goods new orders (excl aircraft): +0.38% m/m. New orders are mostly back to pre-pandemic levvels.

Median new home sales price: headline 335K, -2.2K (-0.66% m/m), SF new home sales: 841K, -104K (-12.37% m/m), monthly home supply: 4.10, +0.50 (+12.20% m/m). Home supply rose sharply off all-time lows, and new home sales fell sharply – but still remain above the pre-pandemic levels.

Auto/Light Truck Sales: headline -4.67% m/m, Auto Sales: -2.65% m/m, Heavy Truck Sales: +2.42% m/m. Total auto sales are now moving lower – they never quite made it back to pre-pandemic levels – the top was back in September – and now they are falling markedly.

Summary

Gold [+25%], silver [+48%], and the miners [+35%] had a great year – and a pretty good December too. Silver’s chart looks strongest, followed by gold, and then the miners. The 3-month winter correction in the metals may be at an end – it probably is at an end. But it is odd to see the miners lagging silver; this is less bullish than I might hope.

Even so, it was a good year for PM.

Related: the Fed’s balance sheet had a fantastic year, up +3.24 Trillion [+78%]. Trillion with a T. Rhymes with P. Stands for – Printing. Believe it or not, the 2020 increase wasn’t the largest yearly percentage increase on record for the balance sheet. That’s still held by 2008: +151% [+1.34 trillion].

This year, US Government Debt/GDP rose from 106% to 127% [+3.74 trillion, +16%].

Related: the buck fell -6.36%. Seems like a pretty anemic drop given the large changes in the items above.

Risk assets were mixed; both copper [+0.73 +26%] and SPX [+525 +16%] rallied, crude [-12.61 -21%] fell, while crappy debt was almost unchanged [-0.60 -0.55%]. Interestingly, while SPX gets the headlines, PM has actually done a whole lot better.

Theme for the year for copper: “things” replaced “experiences.” And it turns out, many “things” require copper. And most “things” are now made in China. China gave us the virus (well, to be fair, Fauci did fund the GOF reearch, so it was a team effort), and now they are cranking out stuff like mad. Someone’s relative Comprehensive National Power calculation is doing very well right now. The big winner this year: Chairman-for-life Xi. Sorry Hong Kong, Xinjiang, and the American worker.

Bonds rallied too; the bond ETF IEF (a 7-10 year fund) rose +8.83%; the 10-year yield fell -0.92 bp.

So, to sum up 2020, the US was able to print +$3.2 trillion, and US government was able to spend an extra $3.7 trillion, and it only cost us 6% in value of USD.

Do we expect more printing next year? Well, we have the newly-passed “No Donors Left Behind” Act, good for $900 billion. And if those Biden Dogs end up in the White House, well then it all depends on what happens in that Georgia primary run-off. That’s just five days away. If Dominion Voting has anything to say about the process, it will be a Blue Sweep, and…the Fed will end up printing a ton of money to bail out all those underfunded state government pension plans. No Donor Left Behind II. Maybe another $3 trillion? Plus a “green new deal” – No Green Donors Left Behind?

I get the sense that the Bad Orange Man isn’t super eager to hang it all out on the line for the often-weasely Team Red, many of whom are probably happy to go back to the pre-Trump era bipartisan selling-out-to-China eternal-war corruption-fest. Either that, or members of this group have already been compromised by the contents of that Big Server Farm in Utah, they picked up some “election insurance” from Dominion Voting Systems, or they’re already on the CCP payroll (10 held by H for the big guy!) and they have no choice in the matter.

Leaving the politics aside, the sense I have is that normal people are a) happy to leave 2020 behind, and b) expecting something to make things better for 2021. Right now, in the West, that “something” is The Vaccine.

After all, we know from the WHO’s recently stealth-rewritten guidelines on herd immunity that it only comes from vaccines.

Unfortunately, my gut is telling me that the current vaccination campaign, at least with these two vaccines, is not going to go well. But given tech & MSM censorship, we won’t know this until a whole lot of people have been adversely affected. Nursing home patients won’t complain about adverse effects – they die a lot, so nobody cares; well unless they test positive for COVID and then die, in which case you’re killing grandma – and HCWs will be peer-pressured into not squawking too loudly. So it will have to be normal people that get hurt and report it to their friends.

What’s the timing on that reaching a tipping point? If this plays out the way I think it will, it will be some time after “enough normal people” get that second dose. Call it, maybe, mid February? We here at the site will get more of a sense when members or our friends get vaccinated and they tell us what happened.

As with all things, the banksters will get the data in advance of the rest of us. The market will start to sniff this out in advance. Perhaps – crude and/or equities will react first?

At the same time, there is also the outside chance that Ivermectin (or perhaps something else) could – from the outside in – bring about a real change in treatment guidelines within the next few months. If enough third world countries use it, the WHO will be forced to take action, or else lose what remaining credibility they have.

And, of course, we might see some more exploding RV’s also. You just never know.

The takeaway: there is plenty of headline risk ahead, and most likely, the savers will be paying for all of it.

  • Fri, Jan 01, 2021 - 12:59am

    #2
    davefairtex

    davefairtex

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    metals sector map

Silver is the big winner this month – and this year too.  At least in the metals.

The asset-which-shall-not-be-named did a little better.  Sadly, my data source is no longer giving me updates so I can’t give you an update on that one.

Name Chart Chg (M) 52w ch MA9 MA50 MA200 50/200 Last Crossing last
Silver $SILVER 16.86% 46.60% rising rising rising falling ema9 on 2020-12-15 2020-12-31
Silver Miners SIL 14.19% 38.49% falling rising rising falling ma50 on 2020-12-16 2020-12-31
Platinum $PLAT 11.08% 9.42% rising rising rising rising ema9 on 2020-12-28 2020-12-31
Junior Miners GDXJ 8.41% 27.95% falling falling rising falling ema9 on 2020-12-30 2020-12-31
Gold $GOLD 6.94% 23.99% rising falling rising falling ma50 on 2020-12-23 2020-12-31
Gold/Euro $GOLD:$XEU 4.46% 13.19% rising falling rising falling ema9 on 2020-12-30 2020-12-31
Senior Miners GDX 3.86% 22.73% falling falling rising falling ma200 on 2020-12-31 2020-12-31
Palladium $PALL 3.11% 27.84% rising rising rising falling ma50 on 2020-12-30 2020-12-31
Copper $COPPER 2.62% 24.82% falling rising rising rising ema9 on 2020-12-29 2020-12-31
  • Fri, Jan 01, 2021 - 05:45am

    #3

    JAG

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    2020 Year End Market Summary

Happy New Year, boss.

Thanks for all your help this year. I hope 2021 treats us all a little better.

  • Fri, Jan 01, 2021 - 07:23am

    #4
    Chris Martenson

    Chris Martenson

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    Best 2020 Year End Market Summary there is!

I loved this paragraph.  Captured the whole dynamic in a few sentences:

Theme for the year for copper: “things” replaced “experiences.” And it turns out, many “things” require copper. And most “things” are now made in China. China gave us the virus (well, to be fair, Fauci did fund the GOF reearch, so it was a team effort), and now they are cranking out stuff like mad. Someone’s relative Comprehensive National Power calculation is doing very well right now. The big winner this year: Chairman-for-life Xi. Sorry Hong Kong, Xinjiang, and the American worker.

One could be forgiven for observing that even if China hadn’t planned this whole thing out, it sure looks like they did.  Everything broke their way.  And I mean everything.

I get the sense that China is playing Grand Master level chess and the US, staffed with pathetically easily bribed or controlled losers, isn’t even aware of how the pieces move on the board.

I mean disappointingly low levels of money.  You’d think millions or billions might be involved to buy these political cretins off but I’m guessing it’s low five figures at best, on average.  Maybe a 7/10 hottie for the stray House Intelligence Committee member as extra insurance.

No mystery either  that the ultra-toxic Silicon Valley sociopathic antisocial media companies were so easily manipulated against their own citizens.  Nothing personal, they simply don’t care about society or their fellow countrymen.  Or people.  Humans are simply extractable units of marketable information to them, highest bidder take all.

Again, the amounts are so low in comparison to the damage done that they’d make you blush with shame.

Welcome to 2021, where the trends are definitely not your friend.

  • Fri, Jan 01, 2021 - 07:49am

    #5
    wiseone

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    2020 Year End Market Summary

I looked back to the 2018 Year End Market Summary and didn’t notice anything missing. “The asset-which-shall-not-be-named did a little better. Sadly, my data source is no longer giving me updates so I can’t give you an update on that one.”

Could someone give me a hint, I’m missing the reference.

  • Fri, Jan 01, 2021 - 08:00am

    #6
    EddieLarry

    EddieLarry

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    2020 Year End Market Summary

Happy New Year!

it will be interesting with this new CV variant.  Don’t throw away your Vit C, D, zinc, and your masks!  Does seem to be rigged.

  • Fri, Jan 01, 2021 - 08:37am

    #7

    JAG

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    2020 Year End Market Summary

The asset-which-shall-not-be-named did a little better…

Wiseone: I think he means bitcoin, up 306% for the year. Or maybe ethereum, up 470%.

Eat that you stupid goldbugs…wait…I’m a goldbug. I guess I’m a sktizo gold/bit-bug.

More power to you bitbugs out there, y’all kicked butt this year.

 

  • Fri, Jan 01, 2021 - 10:28am

    #8
    TWalker5

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    2020 Year End Market Summary

DF, thanks so much for continuing to provide these insightful updates!

  • Fri, Jan 01, 2021 - 05:27pm

    #9

    pinecarr

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    Steve Bannon interview on China’s infiltration

Hey Chris (and others!),

Speaking of China, did you see Steve Bannon’s recent  interview (Dec. 21, 2020) where he gives his perspective on how the CCP has infiltrated and influences our government, Wall Street, and Corporate America?  It’s called “This Is The Only Fight That Matters’—Steve Bannon on the 2020 Elections and China’s Infiltration” (sorry if someone else has already posted this).  I don’t know if this is true, and am not really familiar with Steve Bannon.  But in looking for a larger framework that helps makes sense of the bigger picture, I found this really interesting and would be interested to hear what others think of it.

https://www.youtube.com/watch?v=28QkqX_iiRY

 

  • Fri, Jan 01, 2021 - 06:50pm

    #10
    Bigfoot

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    Looking for a trading laptop recommendaiton???

I am an active trader with charting and other high processing uses.  I was thinking about the Dell 13″ 16 GB ram model but thought I would see what our PP community suggests??  Not price sensitive.  Happy New Year all.

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