Timing & trends

Investment bank manager: “Nobody knows what the f**k is going on…”

Posted by Simon Black - Sovereign Man

on Friday, 13 September 2013 14:57

shutterstock 130695908Financial circles in Hong Kong are buzzing today on the new Goldman Sachs projection that gold may drop below $1,000 an ounce.

And in merely suggesting such a death sentence for the metal, Goldman’s pronouncement pushed the paper price of gold contracts down $20+.

Many technical indicators underscore Goldman’s views. There’s very little floor for gold prices below $1,200, signaling that gold could gap down quickly.

….read it all HERE

 

The Risks Facing Wall Street 5 Years After Collapse

Posted by Alex Abelson - Julie Hyman

on Friday, 13 September 2013 14:32

Ruth Porat didn’t see it coming.

The Morgan Stanley (MS) banker who advised the U.S. Treasury Department on its rescue of Fannie Mae and Freddie Mac in September 2008 and thought she understood the risks to the financial system had just spent a weekend trying to save Lehman Brothers Holdings Inc. when she got a message: Would she come back to deal with American International Group Inc. (AIG)?

…read more of The risks facing Wall Street 5 years after the financial crisis HERE

 

A man looks up at the offices of JPMorgan Chase & Co. in London. The ability of banks to hide risk, years after Lehman Brothers Holdings Inc.’s fall, was demonstrated by JPMorgan’s $6.2 billion loss in 2012 on wrong-way derivatives bets by a trader known as the London Whale because his positions were so vast.

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The U.S. Comex gold futures (COMEX:GCZ13) fell 2.43% on Thursday to $1,330.30, the largest one-day percentage drop since July 5. The gold futures have plunged 4.05% this week after dropping 0.69% during the previous week. The Dollar Index (NYBOT:DXZ13) fell 0.41% in the past two days to 81.489 on Thursday after falling 0.8% last week. The S&P 500 Index (CME:SPU13)and the Euro Stoxx Index have risen 1.71% and 2.09% week-to-Thursday, following a surge last week. The U.S. 10-year Treasury bond (CBOT:ZBU13) yield retreated from the 3% level reached on Sept. 6 to 2.911% on Thursday.

Fed Tapering, U.S. Data and the Fed Appointment in Focus

The initial jobless claims in the U.S. for the week ending Sept. 7 fell to 292,000 from 323,000 in the week prior, compared to an expectation of 330,000. The four-week moving average of 321,250 was the lowest level in almost four years. The percentage of small business owners wanting to hire has also jumped to the highest level since 2007, reflecting further improvement in the labor market. The uncertainties of the Fed’s QE tapering in the FOMC meeting next week have increased the volatilities in the bond, equity, currency and gold markets. The U.S. Congress will soon have to vote on a funding bill to avert a government shutdown. In the next few weeks, President Obama will nominate the new Fed chairman; a global poll by Bloomberg reveals that Larry Summers is expected to keep a tighter monetary policy if elected and has a higher chance of winning compared to his opponent, Janet Yellen.

Second Half Gold Outlook

The London-based GFMS forecasts a lower gold demand at 2,237 metric tons in the second half of 2013 compared to 2,533 metric tons in the second half of 2012 due to the expected lower jewelry and bar purchases as well as reduced buying by the central banks. The GFMS expects the gold prices, which have declined 21% year-to-date, to move higher towards $1,500 from now until early 2014 and then decline afterwards. GFMS predicts that China’s gold purchases in 2013 are expected to exceed those of India by close to 100 tonnes.

What to Watch

The market will focus on the U.S. August industrial production on Sept. 16 and the U.S. August inflation data on Sept. 17 as well as scrutinize any new policy announcements in the FOMC meeting and the Fed’s press conference on Sept. 18. The market will likely watch for any renewed tensions from Syria as well as the U.S. budget negotiations

August Retail sales in the US came in at 0.2%, below the expected 0.5% and lower than an upward revised July of 0.4%. The US dollar index was under pressure on the news.

 

 

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

 

 

Stocks Showing Multiple Signs of a Top

Posted by Phoenix Capital Research

on Friday, 13 September 2013 3:38

phoenixcapital-9075dd9c-318a-479e-9eff-a0322f1de6c2-v2Tops never form cleanly.

I’ve made the mistake of attempting to call a top on the “dot” in the past. The reality is that anyone who attempts to do so is exercising their ego more than their judgment.

Market tops occur when investor psychology changes. But it’s not a clean shift. Investors, like any category of people, are comprised of numerous groups or sub-sects: some get it sooner than others.

In this sense there are certain tell tale signs that a top is forming. This doesn’t mean a top is “in” nor does it imply a specific timeline for a top to form (say a week vs. a few weeks).

However, there are clear signals that appear around tops. And I want to alert you that multiple ones are flashing right now.

…..read more HERE

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