There were more signs of economic slowing in the monthly Federal Tax data and real time data on gasoline consumption. Here’s how that could turn into a bad surprise for the market.
The price of gold slumped to an 18-month low on Monday. With gold’s plunge garnering media attention lately, you are probably wondering whether gold has hit a bottom or whether it will continue to fall.
Fortunately, if you’ve been following along with my advice throughout the past year, you’ve been on the right side of the gold market.
The post Gold Is No “Safe Haven” In This Market – And It’s Only Getting Worse appeared first on Lee Adler’s Sure Money.
Treasury supply is exploding. The heat is on investors as traders play games.
A 13 week cycle low is overdue and the projection has been hit. The 10-12 month cycle projection has now also been hit. Here’s what to look for, and look out for, over the next few months.
The market ended the week at the bottom of an intermediate trend channel with some signs pointing to a breakdown. Here’s what to look for.
Recent weakness in withholding tax collections through the end of July accurately informed us that a negative surprise was coming in last Friday’s nonfarm payrolls report, which showed a slight decline in the number of new jobs.
The Fed apparently hasn’t gotten the news, or thinks it’s transitory. But Excise tax collections were also weak for the second straight month. Another month of weak excise tax collections in in August would suggest that the problem is not transitory.
A few weeks back I examined the likely reasons that I was wrong about the current rally.
The most important of them was the increase in speculative borrowing by shadow bank financial institutions, who include broker dealers and other financial intermediaries.
This indicator clearly correlates with, and leads, stock price movements.
I have shown this indicator to you a few times over the past month or so, to illustrate what I think is largely driving this rally-an increase in leverage, in essence, a return to hyper bullish market sentiment, typical of a top.
Right now, the indicator is showing a continuation of bullish sentiment, which may be a signal to cautiously buy calls.
The post React and Reverse: One Indicator Tells Us to Cautiously Buy Calls appeared first on Lee Adler’s Sure Money.
11 years ago, in August 2007, just as the markets and the US economy were on the threshold of collapse, the Fed proved for the umpteenth time that it is clueless, not just about the future, but even the present.
It issued these official words in the FOMC statement:
“…the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy.
Readings on core inflation have improved modestly in recent months. However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures.
Although the downside risks to growth have increased somewhat, the Committee’s predominant policy concern remains the risk that inflation will fail to moderate as expected.”
They were wrong here about both the economy and inflation, when it was perfectly obvious to some of us, if not most of us, that things were already going haywire.
But hey! What should we expect? They’re economists and central bankers. They never set foot in the real world.
Meanwhile, today, the data is telling us that maybe, just maybe things aren’t quite as “strong” as the Fed thinks – and this hard, factual, real time data on tax collections provided to us every day by the US Treasury proves it…
The post This 2007 Pre-Collapse Statement Proves the Futility of the Fed’s Forecasting appeared first on Lee Adler’s Sure Money.
Gold’s technical picture is going from bad to worse as it tests major support.
The market headed back up for a test of the July 25 high, and possibly the January high late last week. In the process it formed a new intermediate uptrend channel.