If gold has another "big" down day, the large bearish divergence will probably be confirmed. Red arrow is for direction, not specific targets. Of course all you gotta do is watch 1305, 1296, etc because those numbers work forever and always
... tis global. The 800 pound gorilla farts (the fed) and we all smile and do like wise, for better or worse. Stinks the place up but there is no other real choice in the mid term. No one dare shame the 800 pounder.
The Gold monthly suggests that there is little serious resistance until the 1500's. Could play as the normal summer listlessness and then a year end rally into the bog of the 1500's. @ this long range I'm guessing early 2019 will be defined by the battle for that ground... above that should be bitcoinesque! 2020ish for a decent high? Two year run after this 'base build' ? Par for this course. JMO.
There's that break out , out of a range louky is showing us in the charts. But the real concern is what happens during the follow through, and if there is a follow through.
Remember, the system can't take bonds falling apart and interest rates soaring. Everyone' in too much debt to take it. I see a few options... 1. they can let the trend continue , slowly as she goes, where the markets at some point will become spooked about inflation, causing the economy to slow, stall and possibly even collapse, depending on how they respond to that and how quickly and how much damage they allow to take place if/when they do step in; 2. they could reverse the tapering now, maybe not with what they say, but simply with what they do, heading off problems at the pass, this would keep the parabolic moves going, maybe they would slow, but I don't think risk assets would collapse in this scenario; 3. they could push on the trend, force the problems to appear sooner rather than later which would likely cause a 2008 repeat this year or next, but I wouldn't expect them to do this yet, but it is a risk.
My best guess is somewhere between option #2 and #1, closer to #2. Another guess coming out of that would be we wouldn't see the big 2008 repeat on steroids that everyone's waiting for until the next 4 yr election cycle or the one afterwards. They may be waiting to see what happens in this year's mid term election to make the final moves and are setting up to be able to go either way.
One possibility is that if the Dims win big, then maybe the crash comes sooner rather than later so they'll have a scapegoat(s) where some blame the Dims and others blame Trump or even the Repukes in general. Remember, having scapegoats that are outgoing works well for them: i.e. the 2000-2002 and 2008-2009 crisis both had outgoing scapegoats. So did the smaller mini-recession in '92, and so did the problems at the end of the Carter term. A similar case can be made for the mini-crash of '87 as well.
As always, pay close attention to what they do, not just what they say.
Basically I see every market as derivative of the bond market. The price of money is number one, that price determines if any other investment makes sense... when I say that price I mean that price and future price expectancy. The trend in rates counts almost more than the current level... everyone buying stocks and real estate has factored in a low and falling or stable interest rate. At best they have factored in a few small rises... change that and you change everything, low yielding stocks in a rising rate environment lose appeal, low yield property rentals etc... same... also kills the prospect of capital gains to offset low yield. Basically it reverses almost all trades in play now and one hell of a lot of money starts looking for a new home... what is cheap? Tangibles generally... PM's definitely.
Technically speaking with this we are looking at a deflation as rates rise BUT it will be the classic definition of deflation, contracting money supply. This can lead to prices rising generally as the money moves within the system seeking a new home, just as this massive inflation of the money supply has had little traction with over all price levels, reducing it could have some surprises for people... it's the start point that counts when things change and so mileage varys on the same input. This is the danger of conflating price inflation and real inflation... one is a symptom one is a disease, the symptoms of which may be misleading.
The classic interplay had been bonds trading inverse to stocks, stocks as the risk rate v the 10 year TBill as the risk free rate... but if you lower rates far enough, set the expectation that its virtually permanent, flood the market with cheap money and it will be, as it has been, used to float anything with a return.... sucking a few non returning assets in the same classes along for the ride. Reverse the expectation on all that and we have a rush for the exit and a total reversal of the landscape ---> this is what keeps the Fed up @ night. JMO DOYDD etc.
Note that this is also a set-up that runs a risk of accelerating out of the Feds limited controls, this could go fast, much faster than most on 'the street' would believe. If it gets momentum... look out. We may not need another triggering event, although I'm sure there will be a scape goat, this could simply start moving under its own weight as the bond bull market reaches its natural conclusion.
If Bill has called it right then it is a new day... caveat emptor.
I've not got the track record to argue with him... + timing looks OK to me.
Clear like mud?
Don't hang anything on my BS but it is looking better for bug's, maybe a couple of years in the sun while the dust flares and settles??!
The only alt is open slather printing, no pretence. That will see about the same market response, v hard to get out of this zero bound corner and very hard to stop any concerted market move... should it happen.