Cycle configurations remain bullish. I have updated cycle projections for both the short and intermediate term, and the long term. There’s no respite in sight…
Back in September I wrote to you about why I was giving up on the banking system indicators. I’ve reposted that rant in an addendum to this report. Essentially it boils down to this. Every time there’s a critical problem in the banking system due to banker malfeasance, the Fed steps in to paper it over and reward the criminals.
phase to play well.
The current setup has the potential for an explosive rally. It doesn’t guarantee it, but we want to be prepared to take advantage if it happens. By the same token, we want to be alert for the signs that this could go south on us.
The charts, tables and discussion in this report show what to look for, with some ideas on how to trade it.
As gold works on completing an important intermediate low our last round of mining picks are swinging higher. I have added stops to the newer picks and adjusted stops on existing picks to protect profits but give them room to run.
The Fed continues to fund roughly 85% of new Treasury issuance. It affirmed at last week’s FOMC meeting that it won’t cut QE for the foreseeable future, and it will add, if needed. That means that if the Treasury needs to borrow more, the Fed will add more QE.
But it’s now apparent that the Treasury won’t borrow more for the foreseeable future. The new stimulus bill that we now know is about to pass will cost $900 billion. But the Treasury has $1.6 trillion in cash on hand.
This has huge implications for the stock and bond markets.
Oh boy, bears are not going to like this setup. It’s bad. Really bad.
The 10-12 month cycle continues to trend upward against its supposed cyclical down phase. What happens when the next up phase starts?
The Fed’s policy remains stable at about $170 billion per month in QE, give or take a few billion depending on the level of MBS replacements. The balance sheet is growing on trend. The stock market is tracking with it, as usual.
This will lead to a huge problem when the economy begins to react to enlarged stimulus.
This report discusses how to position trading strategy to take advantage.
As gold’s pattern looks more promising, I’ve added 5 new picks to the chart pick list of the miners.
The futures are attacking resistance here in the wee hours Monday morning. This is the second attempt since the opening in Asia on Sunday night. This is a critical level and what happens here will set the tone for the swing trade outlook, and the longer term. This report tells you what to look for today and this week.