PM Weekly Market Commentary – 03/06/2020

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  • Sun, Mar 08, 2020 - 05:08pm

    #11

    JAG

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    GSR at 138?

Hey Dave,

If you get a few minutes, check out this guy’s video. He has the GSR going to 138. I don’t know much about him but his TA seems reasonable.





Nate said:

I think we are at a very dangerous point in our history.  My gut tells me that another round of lost freedom or asset transfer will be upon us soon.  Biggest concern is the response to COVID-19, and not the bug itself.

I totally agree. Do you think it could be a government controlled blockchain currency?

  • Sun, Mar 08, 2020 - 05:31pm

    #12
    jmone

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    PM Weekly Market Commentary – 03/06/2020

Silver is a predominately Industrial Metal these days.  If business demand shrinks, I’m not sure that the investment demand will pick up the slack.

 

  • Sun, Mar 08, 2020 - 05:50pm

    #13
    timot78

    timot78

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    PM Weekly Market Commentary – 03/06/2020

Dave,  Gold crosses $1700 tonight.  What do you predict at 8:00 AM and 9:30 AM EST for T-Bonds,  Markets, Miners?  Is it worth of playing NUGT/JNUG at this time? GC 3-08-2020

  • Sun, Mar 08, 2020 - 07:03pm

    #14
    Nate

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    PM Weekly Market Commentary – 03/06/2020

Nate said:

I think we are at a very dangerous point in our history.  My gut tells me that another round of lost freedom or asset transfer will be upon us soon.  Biggest concern is the response to COVID-19, and not the bug itself.

JAG said:
I totally agree. Do you think it could be a government controlled blockchain currency?

JAG,

Here is Armstrong’s take on blockchain currency:

The IMF has recommended that all Central banks should issue their own cryptocurrencies. Indeed, they are looking at using Block Chain to keep track of taxes and to enforce negative interest rates with cryptocurrencies which would allow them to impose negative interest rates whenever necessary. With adopting cryptocurrencies that governments would control, we will come one step closer to losing all our freedom. Central banks could enforce negative interest rates with cryptocurrencies and thus people would find their accounts just garnished. You could not hoard cash and withdraw it from banks. They are also looking at this as a way to manage a banking crisis stopping runs on banks. This technology is also causing those in the hunting of tax revenues to lick their lips.

The issuance of digital currencies would allow central banks to remain in control of the money supply far more so than they are today. Sweden is moving forward and there we see that the use of cash is rapidly disappearing.
Cryptocurrency technology would allow also the taxman to just cometh and take whatever he desires in the midst of the economic crisis we face. The Central Banks would be able to maintain greater control over the creation of money through the process of leverage (bank lending).

Central Banks Looking at Creating Their Own Cryptocurrencies

  • Sun, Mar 08, 2020 - 07:54pm

    #15
    davefairtex

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    Crude -10.73 [-25.85%]

Well I figured crude would get hammered, but I didn’t see a gap down open to 30.  That’s just nuts.  But that’s the world we live in now.

I guess there seems to be support at round number 30 for crude.  Maybe!  30!!

SPX futures down -145 [-4.89%] to 2819, with gold +27 [+1.66%] to 1700.  And it sure looks like gold would be moving higher except there appears to be a fair amount of selling pressure right around gold 1700.

Oh.  The e-minis are limit down.  Meaning, they could drop lower, but that’s as far as the rules will allow today.   So we really don’t know where SPX will open right now.  That’s just not something you see every day.

Why on earth would Saudi do this?  I think they (basically) have a teenager in charge of the country.  Too much testosterone; he wasn’t even born during the oil glut of the 1980s.

There.  They managed to push gold back down off 1700.

  • Sun, Mar 08, 2020 - 08:34pm

    #16
    davefairtex

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    gold, bonds, et al

timot-

Well my reversal trading model was showing a top for gold after Friday’s breakout, so…I’m not sure!   (It was also showing a top for silver as well, although not as emphatically).  I think the “gold top” is because gold doesn’t do so well with breakouts, historically; they get sold, gold retraces, and then takes off after the retracement.  That’s what the old traders told me anyway.  “Don’t buy gold breakouts, you’ll be disappointed.”

The 30-year future is up +3.05%, so I guess we get another pop higher for bonds.

Hmm.  The 5% drop for the e-minis is going to cause a great deal of chaos.

Based on recent history, I don’t think the miners will do well.  My one overseas miner (in AUS) is off 5%, with gold up $20.

We could see more of that forced selling in gold futures.  A 5% drop in equities is going to…oh.  The plunge in oil is going to absolutely hammer shale.  And there is a whole lot of crappy debt in shale.  That’s all utterly unpayable right now.  I’m guessing money will panic out of crappy debt.

Well they pounded gold down far enough (now just +12) that SPX has started to trade again, ticking up just a little bit above that lock limit down.  These two really do trade in opposition.

I’m guessing they’ll unload on gold today.  I suspect we will see a brexit-level of intervention.

Leveraged owners of crappy debt (especially in the shale space) are going to have some big margin calls.  Same holds true for leveraged equity holders.

How many hedge funds are leveraged long after 10 years of BTFD?  How many are short volatility?  How many couldn’t resist selling VIX short at 40 on Friday?  Where does VIX open on Monday.  60?  The first hour should be…crazy.

I’m guessing the first hour will probably be wild.  I’m guessing miners will be sold (since the larger ones belong to many indices, which will all be down), as could gold, because of all the leverage out there that will lead to margin calls, and the desire by the gang in charge to keep equities from absolutely being destroyed.

And there goes oil down into the 20s…

  • Sun, Mar 08, 2020 - 08:36pm

    #17

    JAG

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    E-minis

Oh.  The e-minis are limit down.  Meaning, they could drop lower, but that’s as far as the rules will allow today.   So we really don’t know where SPX will open right now.  That’s just not something you see every day.

They stole the low so nobody could profit from it during market hours. It’s all up from here for months.

  • Sun, Mar 08, 2020 - 08:51pm

    #18

    JAG

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    10 Year below 0.5% ?

Did the 10 year really drop below 0.5%?

  • Sun, Mar 08, 2020 - 08:57pm

    #19
    Farmer Brown

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    PM Weekly Market Commentary – 03/06/2020

That’s what I saw as well, but cannot remember where to find the headline/link now.

  • Sun, Mar 08, 2020 - 09:52pm

    #20
    davefairtex

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    gold reversal model

I kinda didn’t believe the model.  Of course we have to wait and see how we close.

The “10” means: model’s look-ahead period is 10 trading days.  “Will price be 1-2 ATRs higher (without dropping “too much”) 10 days from now.”

RE: gold/silver ratio.  The industrial metal argument I think is a sound one.  Silver is probably unhappy during the upcoming recession.

But once the Fed-funded UBI starts, I think silver’s “money-ness” might come back.

And shorter term, there’s that plunging OI for silver I keep looking at.  Really, its quite amazing.

Gold -13 [-0.80%], silver -0.48 [-2.74%].  Crude might have found a low at 27.34.

How many hedge funds will break with crude down 30% in one day?  Probably more than one.

Margin calls.  First hour.

 

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