Sunday PM pre-game, 3/2/2014

It’s a new month, and I have a lot of cool monthly charts for you guys (including some unorthodox ones, e.g. kagi, three-line-break), but unfortunately not a lot of time for explanation today. Long story short, I had a crazy bitch over at my place last night who vomited and crapped all over my floor. Poor dog must’ve gotten into my “medicinal” stash. To boot (pardon the pun), her owner was no longer in the mood for romance after that. Ah, bitches, you can’t live with ‘em. 

Anyway, I’ll do a data dump (ahem) for you guys, and post these charts for your perusal, perhaps we can discuss in the comments.

A quick point, though: I haven’t been presenting the 5% 20-day EMA envelopes for the longest time, as I’ve been trying to shift my focus away from daily action, but it really is an important chart to follow, providing excellent tradeable signals most of the time (pretty much excluding only the major, short-lived "3-sigma" type events). 

Seems to me gold still has some room to climb, with the 20-day EMA of ~$1300 (or better, 40-day EMA at ~$1285) a good place for a stop. So I went long Friday, gambling on a move to $1375-1400.





And here's an amazing monthly 3-line-break chart (since the '80s) of 10-yr yields measured in oil. Almost as interesting as the regularity of the chart is how the upward trends coincide with major geopolitical/macroeconomic events, which kind of peter out ... and it's business as usual again (government borrowing becomes cheaper in black gold, and real sh#t in general). Note we're very close to a reversal this month! I'll be following this so you don't have to.



And here I'll throw some tea leaves on the floor for y'all to look at. 'Till next time. -GM









 Still no notable changes in these old standbys :









8 comments:

Elmer Habavilo said...

GM- 3 things of note:

1) the record high of 1859 on Friday for the s&p makes me think of a chart that occurs to me every once in a while-- the chart of the Zimbabwe stock index in the years 2006-2007... Could it be that the s&p will be at 10000 in 10 years, with the dollar losing 95 percent of its buying power over that time? ... The stock market as the earlier "canary in the gold mind" this time around...

2) I see that gold has jumped in trading in Asia, maybe based on the Ukraine issue

3) it would seem that the Ukraine would be a good area for the eu and USA to maintain control over-- and if the USA can get into a Cold War with china and Russia, that would be helpful for the USA in that the usa could then pressure all allies not to trade in rubles or especially yuan. So I think the USA might be shooting for a Cold War with china here... No need for a shooting hot war... That wouldnt be helpful... Just need to maintain Breton woods and petrodollar system with Cold War

ssgtrader said...

Hi Elmer, I think it is more than that. I think Zerohedge (quoting Morgan Stanley) carries a story that Chine RMB devaluation may triggered some huge losses in US banks. Some currency war type comments. I don't quite understand the part where they said Chine is converting USD reserve into gold and silver, plus trigger a steep drops in USD index. I don't understand the link. But what I noted is there is a huge bomb call Chine RMB devaluation that may not be on many's horizon yet.

GM, congrat on your great entry. I was hopping to get back silver around 20.98 but looks like have to jump in

costata said...

Fasten your seat belts!

"It's important to note, as strategist Vince Foster points out, reductions of foreign exchange reserves held at the Fed have usually preceded financial crises."

http://www.minyanville.com/business-news/markets/articles/the-fed-interest-rates-fomc-short/2/3/2014/id/53607#ixzz2uBsax8xY?refresh=1

Check out the graph headed "FX Reserves Held in Custody"

The quote and link to the Vince Foster piece came from this post: http://www.kitco.com/ind/Gruber/2014-03-03-Emerging-Market-Banking-Crises-Are-Next.html

James Gruber discussing possible explanations for the recent activity in the Yuan. FWIW I'm not in the camp that thinks this is some cutesy game of the PBOC. IMO the US dollar, US sovereign debt markets and the Federal Reserve are driving this not the EM countries. Again in my opinion the PBOC (and others) will be swept along in the current.

ssgtrader said...

costata, sounds bad. Looks like the only way is to look for shorting opportunities

AdvocatusDiaboli said...

costata,

thanks for the link, lots of food for thought (especially since admit, I dont understand even half of it).

So the FX Reserve Balance feel in 3 month 1.5%.
Soooooo? That's what you call falling fast?

costata said...

ssgtrader,

I don't know if "shorting" is the right response. I'm not a trader.

AD,

It looks like a small decrease but it's all relative. If these EM countries are running a trade surplus with the USA then they should (overall) either be accumulating US dollars or their US dollar balances should be stable and their holdings of US debt should be rising.

These figures suggest capital flight out of the EM countries.

Dan the Man said...

crazy central...

http://www.tfmetalsreport.com/comment/390265#comment-390265

Elmer Habavilo said...

Dan - TF's site seems to be a fertile ground for all that "9-11 particle beam" stuff and "no plane at the pentagon" theories... I personally wouldn't use the word " crazy" tho... Rather I would use either "purposefully misleading" or "stupid"