Gold & Precious Metals

Inflection Point Chartology of the Precious Metals Complex

In this Report I would like to look at the Chartology of the precious metals complex as this is either a consolation phase or as some think a bottoming formation is building out that will lead to the next bull market. In order to grasp what is really going on we need to look at all the possibilities and try to gain some perspective on which course of action the precious metals complex is likely to move in the short to intermediate time frame up or down.

The first chart I would like to show you is what I call my bull or bear chart. Many chartists are looking at the inverse H&S bottom that actually started to form back in April of this year, left shoulder. The head was formed during the late June low followed by the ten week rally to the September high around the 1435 area. As you can see there are two black necklines labeled #1 and #2 that shows a possible double inverse H&S bottom. In order to keep the symmetry alive gold would need to decline down toward the 1250 area where it could then form the second right shoulder. To confirm an inverse H&S bottom is in place gold would have to takeout the bigger neckline #2 around the 1400. This would be the bullish case for gold. The bearish argument for gold is that it is forming a H&S consolidation pattern as shown by the blue annotations. The flash rally that took everyone by surprise made the right shoulder high which quickly reversed direction. So at this point we have two inconclusive patterns to work with.

1

….17 more charts & commentary HERE

 

 

Real GDP grew 0.6% in July in line with expectations, rebounding from a 0.5% decline in June.

Goods production rose 1.2%. Construction, manufacturing, as well as mining and oil and gas extraction all increased, while utilities and the agriculture and forestry sector declined.

 

Drew Zimmerman

Investment & Commodities/Futures Advisor

604-664-2842 – Direct

604 664 2900 – Main

604 664 2666 – Fax

800 810 7022 – Toll Free

dzimmerman@pifinancial.com

 

Look For Wild Volatility This Week

Maintain Healthy Cash.

The Bottom Line

Look for wild volatility in equity markets this week. However, the correction in North American equity markets that started on August 2nd and likely to last until the end of October continues to be a flat rather than a downtrend. Preferred strategy is to maintain a healthy cash position in preparation for possible entry into the favourable seasonal starting in late October.

Economic News This Week

Canadian July Real GDP to be released at 8:30 AM EDT on Monday is expected to increase 0.5% versus a decline of 0.5% in June.

September Chicago PMI to be released at 9:45 AM EDT on Monday is expected to increase to 54.3 from 53.0 in August.

September ISM to be released at 10:00 AM EDT on Tuesday is expected to slip to 55.2 from 55.7 in August.

August Construction Spending to be released at 10:00 AM EDT on Tuesday is expected to increase 0.4% versus a gain of 0.6% in July

September ADP Private Payrolls to be released at 8:15 AM EDT on Wednesday are expected to slip to 175,000 from 176,000 in August

Weekly Initial Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to increase to 315,000 from 305,000 last week.

August Factory Orders to be released at 10.00 AM EDT on Thursday are expected to increase 0.2% versus a decline of 2.4% in July.

September ISM Services to be released at 10:00 AM EDT on Thursday are expected to slip to 57.0 from 58.6 in August.

September Non-farm Payrolls to be released at 8:30 AM EDT on Friday are expected to increase to 183,000 from 169,000 in August. September Private Non-farm Payrolls are expected to increase to 180,000 from 152,000 in August. September Unemployment Rate is expected to slip to 7.3% from 7.5% in August. September Hourly Earnings are expected to increase 0.2% versus a gain of 0.2% in August

Equity Trends

The S&P 500 Index fell 18.16 points (1.06%) last week. Trend remains up. The Index remains above its 20 and 50 day moving averages. Short term momentum indicators are trending down.

clip image001 thumb17

The TSX Composite Index added 37.61 points (0.03%) last week. Trend remains up (Score: 1.0). The Index remains above its 20 day moving average (Score: 1.0). Strength relative to the S&P 500 Index changed from negative to neutral (Score: 0.5). Technical score based on the above indicators improved to 2.5 from 2.0 out of 3.0. Short term momentum indicators are neutral.

clip image006 thumb13

Gold added $6.70 per ounce (0.50%) last week. Trend remains up. Gold remains below its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains negative. Technical score remained at 1.0 out of 3.0. Short term momentum indicators have recovered to a neutral level.

clip image031 thumb4

Crude oil fell $1.88 per barrel (1.79%) last week. Trend changed from up to neutral on a move below $102.22. Crude remains below it s20 and 50 day moving averages. Strength relative to the S&P 500 Index remains negative. Technical score eased to 0.5 from 1.0 out of 3.0. Short term momentum indicators are oversold.

clip image027 thumb4

….much more HERE including 45 more charts

The Debt-Ceiling Debate

As our country heads toward another midnight fiscal brawl, let me give you some examples of how completely irresponsible our leaders are:

In 2010, the Internal Revenue Service spent $4.1 million on a lavish conference for 2,609 of its employees in Anaheim, California. Expenses included $50,000 for line dancing and “Star Trek” parody videos, and $64,000 in conference perks for employees, plus free meals, cocktails and hotel-suite upgrades.

In 2012, the Department of Agriculture spent $300,000 on activities pro­moting caviar produced in Idaho.

The Federal Communications Commission spent $2.2 billion in 2012 to provide phones to low-income Americans, up from $819 million in 2008. A review found that 41 percent of over 6 million recipients were either ineligible or failed to prove their eligibility for the program.

Screen Shot 2013-09-30 at 6.11.23 AMThe Department of Energy’s Savannah River facility spent $7.7 million on severance pack­ages for 526 temporarily hired contract workers instead of issuing layoff notices. That’s over $14,600 per “temporary” employee.

Taxpayers spent $700 million in stimulus funds on the Department of Energy’s Smart Grid Demonstration Program. An audit found that $12.3 million in reimbursements lacked required supporting documentation.

The U.S. Secret Service spent $23 million to purchase a new fleet of luxury parade limou­sines. No competitive bids were sought.

The White House is spending $376 mil­lion on a four-year renovation of the Executive Mansion, which includes a second Oval Office for the president to use during the renovation.

The General Services Administration’s poor oversight of 33 courthouse-construction proj­ects from 2000 to 2010 cost taxpayers $835 million in extra building expenses.

The National Endowment for the Arts gave a $100,000 grant to fund development of a video game about a female superhero sent to save planet Earth from climate changes.

The Transportation Security Administration let 5,700 pieces of unused security equipment worth $184 million sit in storage in a Dallas warehouse, costing taxpayers $3.5 million annually to lease and manage.

This year, the U.S. government will pay $65 per year, per account, in service fees to keep 13,712 of its empty bank accounts — with, I repeat, no money in them — on the books, costing taxpayers $890,000.

Medicare was recently found to have overpaid hospitals and clin­ics for a kidney dialysis drug to the tune of $800 million per year, an error that won’t be cor­rected until new rates are established in 2014.

A 2012 report from the Treasury Inspector Gen­eral for Tax Administration identified $757 mil­lion in fraudulent tax refunds to prisoners in 2010.

Due to poor oversight, over 1,000 Pennsylvania prisoners were able to collect weekly unem­ployment benefits over a four-month period, costing taxpayers $7 million.

A fis­cal 2011 Performance and Accountability Report from the Social Security Administration (SSA) found it overpaid $2.11 billion in Social Security benefits.

The same report found that the SSA overpaid old-age, survivor and disability insurance benefits by $934 million in fiscal 2010 alone.

Also in 2010, 117,000 individuals received $850 million in cash benefits by double-dipping into Social Security’s disability insurance pro­gram and the federal unemployment insurance program.

The U.S. Department of Agriculture awarded a $149,992 grant to researchers at Fairleigh Dickinson University in New Jersey to study college students’ on-campus dining selections.

The Office of Naval Research conducted a $450,000 study to determine whether babies would pay attention to unin­telligent robots.

In a study costing $681,387, the U.S. Air Force Office of Scientific Research confirmed that men bearing firearms appear taller, stronger and manlier than those who don’t carry firearms.

The same U.S. Air Force office also conducted a $300,000 study that concluded that the first bird on Earth probably had black feathers.

And the list of documented cases of wasteful,
ridiculous spending and oversight by our leaders 
in Washington goes on and on.

And now our leaders are bickering — not about how to cut wasteful spending and improve its operating efficiency, or even to really tighten Washington’s collective belt — but about which party can get the most political clout and pork barrel concessions stuffed in any bill that raises our country’s debt ceiling so we can go deeper into hock. As if $17 trillion in debt isn’t enough.

Meanwhile, these very leaders are doing everything in their power to hunt down every penny of citizens’ wealth, no matter what the cost, to find out where that money is.

The IRS is running around the globe strong-arming all foreign banks and financial institutions to disclose every American account that’s been set up offshore.

Don’t comply, the IRS says, and we’ll essentially blacklist you and withhold up to 30 percent of any income and dividends sent to your bank or institution.

As a result, Americans, such as myself, are now finding it increasingly difficult to live and work overseas.

And then there’s the spying program. The NSA knows everything you are doing online. It can determine your shopping habits and turn that information over to the IRS if it wants. It can read your emails. It can monitor you down to your daily schedule and even locate where you are at any moment in time.

Quite frankly, I am sick of it.
Our country is going to hell in a handbasket.

According to my work on war cycles, it’s going to get a whole lot worse in the months and years ahead.

As I’ve previously shown you, the war cycles ramp up all the way into 2020. They are already in motion. The turn up came in March of this year. That’s when North Korea threatened to nuke us. Then there was Egypt, the Boston Marathon bombing, and then Yemen and Syria.

There are hot spots all over the world. Some international in scope. Some are civil wars and uprisings, revolutions. Soon, the war cycles will hit Europe, where the next round will find the euro area breaking up, the euro tanking, and civil-war-like conditions breaking out all over the Continent.

And then it will hit our shores. It will get ugly, very ugly.

But there is a silver lining to all this. For our country, I think it’s this: A revolution is coming and, though we will go through some very hard times, on the other side will be a far better, smaller, more efficient government. One that does not overtax you. One that puts an end to spying on you. One that gets back to the principles of our founding fathers. And one that allows the USA to rise from the ashes of a leviathan that grew too big, too inefficient and outdated, too greedy and too power-hungry.

There’s also good news for investors who know how to play this next phase of the financial crisis, the phase that will ultimately transform us back into a great nation.

It’s actually very simple. You follow the smart money. You get out of sovereign bonds. You invest in equities that will outshine and outlast the governments of the U.S. and Europe.

You buy commodities again, aggressively, when the upcoming disinflationary trend ends. You load up on gold at this time. On silver, base metals, agriculturals and energy investments.

Most of all, you do not let the trouble in Brussels or Washington prevent you from making money. Life will go on. Commodities are still needed and, in fact, will be hoarded. Great multinational companies will thrive.

You protect your family financially, and grow your wealth.

Best wishes and God bless,

Larry

– See more at: http://www.swingtradingdaily.com/2013/09/30/beyond-the-debt-ceiling-debate-how-the-u-s-could-once-again-be-a-great-nation/#sthash.4CVSykdo.dpuf

Washington DC Comedy Hour

McIver Wealth Management Consulting Group / Richardson GMP Limited

Most of the focus during the week was on the debate in Washington over the budget and debt ceiling with both political parties sniping at each other saying that it will be the other’s fault if the government has to shut down with no budget in place. Obviously, stock markets don’t like these comical displays when they relate to a serious fiscal issue.

There is not a whole lot of leadership in Congress with respect to getting to a resolution ahead of time. However, even more notable, there is no leadership from the president on this issue. Stating that he is not willing to negotiate with respect to the federal budget and the debt ceiling is an extreme position. In the past there has always been give-and-take on these issues. The Acts that that pertain to the debt ceiling and federal budget make it clear that that they are legislative issues to be debated. Declaring that they will not be debated is a sure way to hamper resolution.

One reason for this may be the president’s low standing in opinion polls. A crisis would be a welcome diversion from his performance in other areas. Also, it is usually difficult for the general voting public to grasp the nuances and details of budget debates. As a result, there may be a chance to win in the eye of the public by using rhetoric instead of cooperating.

Despite all the U.S. political shenanigans, history tells us that deals are eventually made at the 11th hour. Also, once that occurs, stocks normally make up more than they lost in the weeks leading up to the deadline. As a result, even though the news sounds bad, it may not be a bad time for the markets (assuming some other event doesn’t come out of left field, like weak corporate earnings for example).

Next Friday October 4th, the U.S. Bureau of Labor Statistics employment report comes out. The Fed is likely going to keep policy unchanged until at least December regardless. As a result, if the employment report is well outside of the consensus either way, the market response might be muted.

October, sometimes a stormy month for markets, looks like it might be a relatively benign stretch despite the storminess of the politics.

Mark Jasayko