28 March 2024 – 09:07 Central Euro Time

The week’s final trading day is underway with the Euro, Swiss Franc and Silver all at present below today’s Neutral Zones; the other BEGOS Markets are within same, and volatility is light-to-moderate, the Euro, Gold and Copper already exceeding 50% of their respective EDTRs (see Market Ranges). Per our S&P 500 Moneyflow page, all three time measures (week, month, quarter) are lately indicative of money not flowing from the Index, but neither is inflow increasing; the “live P/E of the S&P (futs’adj’d) is now 47.3x, which as you regular readers know is essentially double that since this measure’s inception a dozen years ago: the S&P thus remains significantly (understatement) expensive. ‘Tis a busy two days for the Econ Baro: today’s incoming metrics include March’s Chi PMI and revision to the UofM Sentiment Survey, February’s Pending Home Sales, and the final revision to Q4 GDP. Tomorrow whilst the markets are closed the Baro nonetheless looks to February’s Personal Income/Spending, plus the “Fed-favoured” PCE data. Joyeuses Pâques à Tous !

27 March 2024 – 09:18 Central Euro Time

Both the Swiss Franc and Oil are at present below today’s Neutral Zones; otherwise the BEGOS Markets are within same, and volatility is light. Looking at Market Rhythms , the most consistent on a 10-test swing basis is the Spoo’s daily Parabolics, whilst on a 24-test swing basis ’tis the Euro’s 15mn Price Oscillator. Market Values’ deviations of note are the Euro as some -0.02 points “low” per its smooth valuation line, Gold as +68 points “high” and the Spoo as +90 points “high”. And as previously noted, at Market Trends Silver’s “Baby Blues” of consistency confirmed dropping below their key +80% axis suggestive of lower price levels near-term. Nothing is due today for the Econ Baro ahead of a data barrage both Thursday and Friday (the markets being shut on the latter).

26 March 2024 – 09:14 Central Euro Time

The Swiss Franc, Silver and Copper are all at present below their respective Neutral Zones for today; the other BEGOS Markets are within same, and volatility is mostly light, save for Copper which has already traced 62% if its EDTR (see Market Ranges). At Market Trends (in real-time), the “Baby Blues” of trend consistency for both Silver and Copper have dropped below their key +80% axes. Gold’s negative technicals (covered in the current Gold Update) have yet to similarly affect price: too, Gold’s cac volume today is rolling from April into that for June, in turn adding +22 points of fresh premium to price. For the Econ Baro today we’ve March’s Consumer Confidence and February’s Durable Orders.

25 March 2024 – 09:18 Central Euro Time

We start the shortened week with Copper at present above its Neutral Zone for today; all the other BEGOS Markets are within same, and volatility is light-to-moderate. The Gold Update graphically lays out the increasing inflation scenario, querying if the Fed has lost its “cred”; too, the Update cites near-term negative technical measures for Gold and that there is little structural support sub-2150 until 2050, (were price to materially let go); of course, the broader weekly parabolic trend remains firmly Long. The S&P 500 is 45 days “textbook overbought”, placing it in the 98th percentile of such overbought conditions since at least the year 1980; the “live” (futs-adj’d) P/E is presently 46.2x. The Econ Baro looks to February’s New Home Sales.

The Gold Update: No. 749 – (23 March 2024) – “Gold’s Fresh Highs; Fed’s Cred Demise?”

The Gold Update by Mark Mead Baillie — 749th Edition — Monte-Carlo — 23 March 2024 (published each Saturday) — www.deMeadville.com

Gold’s Fresh Highs; Fed’s Cred Demise?”

Gold recorded another series of fresh All-Time Highs this past week in eclipsing the 2203 level (from 08 March) in a swift run up to 2225 on Thursday before coming off (as we’ve written “expectedly”) in settling yesterday (Friday) at 2167.  Still, given Gold’s momentum with but a week to go in Q1 of 2024, our forecasted year’s high at 2375 remains rightly reasonable.

But let us again head with the Fed, indeed query if ’tis losing its cred.  Clearly that which we herein penned a week ago “…Obviously the FOMC shall unanimously vote to do nothing with its Bank’s Funds Rate…” is exactly what occurred per the Open Market Committee’s Policy Statement issued on Wednesday.  Our takeaway these many years — rather than watch all the FinMedia bilge — comes from simply reading the Statement, in which for 20 March are these three key sentences:

  • “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.”

     

  • “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”

     

  • “The Committee is strongly committed to returning inflation to its 2 percent objective.”

Yet even as inflation is ticking higher — above and beyond 2% — three FedFunds rate cuts remain on the table for the balance of 2024?  What?  “Curiouser and curiouser!” cried Alice…

To be sure, you’ve already seen the inflation tables we’ve presented in recent missives.  So this time, let’s get graphic(!)  Thus from 12 months ago-to-date (March ’23 through February ’24), below are the headline and core charts for the Consumer Price Index (CPI-retail inflation), Producer Price Index (PPI-wholesale inflation), and Personal Consumption Expenditures (PCE-Fed-favoured inflation).  Note:  the PCE February data points are the consensus estimates as the report is not due until next Friday, 29 March (the markets actually being closed that day).  Therein:  each data point is annualized per that month’s reading; each inflation track is accompanied by its dashed trendline; each panel is identically scaled; and the Federal Reserve’s 2% target level is in red.  And again we say:  “We’re going the wrong way”.  Still, Bloomy ran this past week with “The Great Inflation Scare is Fading.”  Clearly they don’t have these charts:

Demonstrably, the rightmost datapoint (February ’24) in every case is above the Fed’s 2% target.  Moreover:  most of the dashed trendlines are rising up and away from that target, the notable exception ironically being the “Fed-favoured” inflation measure of “PCE – Core”, the trend for which is admittedly nearing said 2% target.  But really:  three rate cuts?  How about a rate hike?  (Perhaps we ought apply to be on the FOMC, but the pay cut would be too dear…)

Hardly dear is dear old Gold.  Its present 2167 price is -42% beneath our opening Gold Scoreboard’s Dollar-debasement valuation of 3719.  So to Gold’s weekly bars we go, the rightmost blue-dotted parabolic Long trend now a young three weeks in duration in this year-over-year view:

However, let us temper the rejoicing of Gold Going Great with some present technical negatives, courtesy of the “Party Pooper Dept.”, albeit with this caveat as penned a week ago:  “…they’re clearly stretched to the upside, however great bull markets (or the resumption thereof) do breakout as such…”  That for you WestPalmBeachers down there means Gold when technically overbought might actually be considered a good thing.

Either way, we’ve the following two-panel graphic.  On the left again is Gold vis-à-vis its smooth valuation line from three months ago-to-date.  Price at present is +71 points above the smooth line, the red down arrows suggestive of the eventual meeting of price with value, (that line itself on the rise; the points difference between price and value is at the foot of the panel).  On the right are Gold’s daily candles across the past 21 trading days (one month) along with the Parabolics study that currently is our leading Market Rhythm for Gold:  note the rightmost red-encircled dot which heralds the start of a Short trend.  (Too, we’ll later see Gold’s “Baby Blues” of trend consistency suggesting lower price levels ahead).  Here’s the graphic:

“So, mmb, the question becomes ‘How low is low’, eh?

So ’tis, Squire, (barring the technicals instead catching up to price, which again in a bullish breakout is mathematically natural).  Regardless, in looking above at the right-hand panel of Gold since a month ago, “The Big Move” in round numbers was +100 points from 2050 to 2150.  Thus by structural support, that latter number ideally would be as low as Gold goes near-term.  But with three technical negatives all simultaneously in play (price above value, Short daily parabolic trend, and as noted we’ll see, a breakdown in Gold’s “Baby Blues”), we sense 2150 shall bust, (this past week’s low having already touched 2149, but ’twas prior to Thursday’s 2225 All-Time High).

Nonetheless, does all that mean a full retracement back down to 2050 is warranted?  ‘Tis dependent on buyside enthusiasm:  through the 57 trading days year-to-date, Gold’s average daily COMEX contract volume is 208,633; yet for these past five days, the average is +15% higher at 240,638.  We can therefore say that “Gold is in play”:  however, Friday’s down day (high-to-low from 2188-to-2158) sported Gold’s largest one-day contract volume this year at 391,750, such “mo-mo suggesting more low” should dip buyers wait out more downside show.  ‘Course, broadly on balance, Gold continues to look good to go with eventually higher levels to bestow.

Meanwhile, bestowed upon a needy, stagflative Economic Barometer this past week was improved data for housing.  The National Association of Home Builders Index gained ground in March as did February’s readings for Housing Starts, Building Permits, and Existing Home Sales.  In an otherwise light week for incoming data, the only “negative” metric was a slowing in March’s Philly Fed Index:  but its result (3.2) was positive for just the fourth time in the past 22 months: Fly, Eagles Fly”[Borrelli/Courtland, ’55].  Here’s the Baro:

Yet does stagflation still lurk for the economy?  Next week for the Econ Baro we’ve 14 metrics, just seven of which are expected to show period-over-period improvement.  And again, the aforementioned February PCE, along with that month’s Personal Income/Spending, are to be released on next Friday’s holiday, meaning they can’t be traded upon until Monday, April Fools Day … oh baby.

As for the Casino 500, ’tis “nuthin’ but new highs” as the stock market continues to “price in” the same news over-and-over-and-over again.  Week-after-week we read of the market rising day-after-day because of “Breaking News:  The Fed Will Cuts Rates Three Times This Year!”  The S&P is now “textbook overbought” to the tune of 45 consecutive trading days:  going all the way back to the year 1980, that streak ranks in the 98th percentile of such overbought condition.  Indeed yesterday, Janus’ Bill Gross characterized today’s investing climate as “excessive exuberance”.  ‘Course, Smart Alec shan’t sell his shares until he (along with everyone else) is scared, the broker then crediting his account with IOUs when the money isn’t there*.  (“Pssst:  Got Gold?”)

* As of 22 March ’24:  S&P 500 market cap:  $45.7T; U.S. liquid money supply (M2):  $21.0T.

Next we’ve got more of Gold, and Silver too.  Beginning with the yellow metal is our two-panel display of Gold’s daily bars from three months ago-to-date at left and 10-day Market Profile at right.  Note the “Baby Blues” which depict trend consistency:  we’ve actually coloured the rightmost one in red given its having dropped below the key +80 axis level.  That generally leads to lower Gold levels near-term.  For example:  from one year ago-to-date, such “Baby Blues” slip phenomena has occurred on three occasions, the downside price movement within 21 trading days (one month) ranging from -10 points to -49 points, (i.e. were that to pan out in this case from today’s 2167 level, Gold would head down into a range between 2157 to 2118, just in case you’re scoring at home).  As for the Profile, Gold is now sitting just above the trading support labeled as 2164:

For the white metal, Sister Silver’s resent sweet ascent is now being met with some dissent.  With the like drill as shown for Gold, her “Baby Blues” (below left) have just kinked down, and Profile support (below right) shows at 24.65.  Should Silver sustain a bit of a hit, the high 23s would likely seem fit:

To close, we’ve these few quick quips.

This past Tuesday we awoke to read that Kazuo Ueda and his mates at Nippon Ginkō — for the first time in 17 years — put positive the bank’s overnight lending rate in raising it from -0.1% to a sought range of 0.0% to 0.1%.  Still, it all seems rather wee, but as goes the saying:  “Saké to me, Saké to me, Saké to me…”

This past Thursday with Swiss precision at 09:00 CET, Tommy Jordan and his lads at Schweizerische Nationalbank cut — without scheduled notice — both their key lending and deposit rates to 1.50%.  This in turn elicited the Swiss Franc’s largest single session high-to-low drop (-1.69%) versus the Dollar in better than a year.  Or how would Emmental Robin put:  “Holy cheese, Batman!”

And from the “You Can’t Make This BS Up Dept.”, hardly complete would be the week without having learned from “ABC News!” that according to The World Happiness Report, the Good Old USA no longer ranks amongst the Top 20 Happiest Countries.  Aw shucks.  But when your nation averages some 45 murders per day (per the Kaman Law Firm), ’tis hard to be happy.  Indeed, that’s America, babe:  “Death and Taxes!”

Rather, seek that which is more life-and-monetary sustaining: 

And Gold in any denomination is still Gold!

Cheers!

 …m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”:  @deMeadvillePro

22 March 2024 – 09:25 Central Euro Time

The EuroCurrencies and Metals Triumvirate are all at present below their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is firmly moderate. Whilst by Market Ranges most of the EDTRs are on the rise, ’tis not the case for either the Bond nor Oil, (nor to a minor extent, the Euro). Yesterday’s high-to-low plunge in the Swiss Franc of -1.69% was the largest across the day’s range in better than a year (since 15 March ’23) on the heels of the Schweizerische Nationalbank unscheduled reduction of its key interest rate. Looking at Market Rhythms for consistency, our 10-test swing leader is the Spoo’s daily Parabolics, (see too the Yen’s 15mn Moneyflow study); on the 24-test basis ’tis the Swiss Franc’s daily Parabolics. The Econ Baro’s week is complete.

21 March 2024 – 09:07 Central Euro Time

The Swiss Franc, Copper, Spoo and Gold are all at present above today’s Neutral Zones: the yellow metal recorded a new high overnight at 2225; BEGOS Markets volatility is moderate-to-robust, Gold notably having traced 135% of its EDTR (see Market Ranges); and by Market Values (in real-time) price (currently 2209) is +119 points above its smooth valuation line. Per the Fed’s math, even as inflation is increasing, they calculate it as decreasing; more on that in the next Saturday edition of The Gold Update. The Econ Baro wraps its week today, income metrics including Q4’s Current Account Deficit, March’s Philly Fed Index, plus February’s Existing Home Sales and Leading (i.e. “lagging”) Indicators.

20 March 2024 – 09:11 Central Euro Time

Spring starts similarly to Winter’s final day, with (save for the Bond) all the BEGOS Markets at present in the red ahead of the Fed; volatility is mostly light (Copper having already traced 63% of its EDTR — see Market Ranges). ‘Twill be interesting to note (perhaps during Chair Powell’s post-FOMC Policy Statement presser) if a FinMedia member brings up the notion of a rate hike, (all as luridly updated in the current edition of The Gold Update). As for the S&P 500, the “live” (futs-adj’d) P/E is 45.8x and the yield 1.380%; that for the 3-month T-Bill is 5.238% annualized. Nothing is due today for the Econ Baro.

19 March 2024 – 09:36 Central Euro Time

All eight BEGOS Markets are at present in the red; session volatility is mostly moderate; of note, the Yen (not as yet a BEGOS component) has traced 168% of its EDTR (see Market Ranges for those of the BEGOS Markets), as the BOJ ends its era of negative interest rates. Looking at Market Rhythms, our leader for consistency on a pure swing 10-test basis is Gold’s 30mn Price Oscillator, whilst on a 24-test basis ’tis the Swiss Franc’s 6hr Parabolics; indeed by Market Trends, the Swiss Franc is the only component now sporting a negative linreg: were there a “hawkish hint” in the FOMC’s Policy Statement (tomorrow) ‘twould likely add to Dollar strength. The Econ Baro awaits February’s Housing Starts/Permits.

18 March 2024 – 09:07 Central Euro Time

Both Oil and the Spoo are at present above their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is light. The Gold Update continues (at the very least) to muse over the notion of the Fed at some point actually having to raise rates: therein, our updated inflation table tells the story. The yellow metal itself as “expected” is coming off the recent All-Time High of 2203 (currently 2155) given the excessive distance of price above its smooth valuation line, that live reading now +79 points (see Market Values). ‘Tis a light week of data for the Econ Baro, beginning today with March’s NAHB Housing Index.

The Gold Update: No. 748 – (16 March 2024) – “Gold’s Expected Detinue; Fed HIKE Must Ensue?”

The Gold Update by Mark Mead Baillie — 748th Edition — Monte-Carlo — 16 March 2024 (published each Saturday) — www.deMeadville.com

Gold’s Expected Detinue; Fed HIKE Must Ensue?

We start with the Federal Reserve, the Open Market Committee scheduled to deliver its next Policy Statement this coming Wednesday, 20 March (at 18:00 GMT).

Obviously the FOMC shall unanimously vote to do nothing with its Bank’s Funds Rate, the devil then being in the Statement’s details, followed by those then exorcised by the FinMedia from Chair Powell during his presser.

Now as you regular readers know, we’ve herein mused (albeit not predicted) since the beginning of this year that the Fed — rather than cut rates as everyone expects — instead have to further raise rates if for no other reason than the math suggests inflation is running well above the Fed’s infamous, annualized 2% “target”.

Recall two weeks ago our inflation summary for January.  ‘Tis below on the left.  Since then, the Bureau of Labor Statistics has chimed in for February with both retail inflation (Consumer Price Index) and wholesale inflation (Producer Price Index).  Thus we’ve updated that graphic as now shown below on the right, (February’s Personal Consumption Expenditures not due from the Bureau of Economic Analysis until 29 March).  Regardless:  look at the “Averages” row at the foot of both panels:  we’re continuing to go the wrong way, (i.e. inflation is increasing).  And yet conventional wisdom is staying the rate reduction course“C’mon, man!”  Again, if in red, the metric is ostensibly “too high” for the Fed:

 

But nary a day goes by wherein we don’t read about the “timing” of the Fed’s cutting rates.

So query:  what about the “timing” of the Fed instead rightly raising rates?  Just sayin’ … for after all, math is a marvelous science for detecting the truth.  (‘Course, “Math Class” has been long-removed from many a public school curriculum and replaced with “How to Grow a Tree Class”).  Still, the insistance for the Fed to cut rates remains a core issue for the FinMedia.  Following all this past week’s increasing inflation metrics for February, here are some choice headlines per the parroters:

  • Bloomy:  “Fed gets more reasons to delay interest cuts” (why not raise?);
  • DJNw:  “‘Perpetually optimistic’ investors worry Fed won’t cut rates three times this year” (dumb);
  • CNBS:  “This week provided a reminder that inflation isn’t going away anytime soon” (duh);
  • Bloomy:  “Fed Seen Sticking With Three 2024 Cuts Despite Higher Inflation” (denial).

At least Dallas FedPrez Lorie “Logical” Logan gets it, her saying in January:  “…we shouldn’t take the possibility of another rate increase off the table just yet…”  Too bad she is not (as yet) an FOMC Member.

Also — were the Fed to raise rates — are the fallout issues both for equities and political support.  As you know ad nauseum, the S&P 500 is ridiculously over-extended, (see the historical case in last week’s missive for a material “correction” of some 16%-to-18% within these next three months).  The last thing the Fed wishes to foster is a rate-hike-elicited stock market collapse, especially in a Presidential election year.  As the U.S. Senate in May 2022 extended FedChair Powell’s term through May 2026, ’tis favourable for him not to see a power shift therein should higher rates cream equities.  On verra…

The bottom line is:  if the Fed truly desires annualized inflation not exceed 2%, they need tighten rates, and in turn, tighten belts of America.

As entitled for “Gold’s Expected Detinue” (which for you WestPalmBeachers down there means “a person or thing detained”), certainly so was Gold’s recent advance.  For the week just past, Gold’s net change was -1.2% (-27 points) in settling yesterday (Friday) at 2159.  Why “expected?”  Recall from last week’s piece this now updated graphic of Gold vis-à-vis its smooth valuation line as derived from the relative movement of the five primary BEGOS Markets (Bond / Euro / Gold /Oil / S&P).  Oh to be sure, per the Gold Scoreboard, price (2159) is vastly undervalued given its currency debasement level (3717); but more momentarily per the website’s Market Value graphic, price at present is nearly 100 points “too high” given what near-term typically ensues per the red encircled bits as displayed from one year ago-to-date:

‘Course, across the same time frame by Gold’s weekly bars and parabolic trends, hardly does it get any better than this.  And yet with respect to that just displayed for Gold being some 100 points above its BEGOS Market Value, our weekly graphic’s dashed linear regression trend line is similarly about 100 points below price, (that courtesy of the “Means Reversion Dept.”)  Here ’tis:

Nonetheless more broadly — indeed by the day since 22 August 2011 (when Gold achieved an All-Time Closing High at 1900) — the upward tilt of price looks nice.  This next display retains several of Gold’s more notorious levels of the past, along with this year’s 2375 forecast (green line) as rather ripe for the taking:

But taken for a ride of late — indeed one quite steeply down — is the Economic Barometer.  That combined with increasing inflation maintains the reality of stagflation as detailed in our prior two missives.  In fact, the StateSide economy did get a net bump for this past week, albeit the increasing CPI and PPI headline levels aided and abetted the Baro given “the rising tide of inflation lifts all boats” … until of course stagflation digs in deeply:  “It now costs how much for that?”  Not pretty:

As for the Casino 500, (red line in the Econ Baro chart), its “live” price/earnings ratio is now 45.3x (basically double its inceptive reading a dozen years ago) and the “textbook” measure (a concoction of John Bollinger’s Bands along with the classic measures of Relative Strength and Stochastics) is currently “overbought” through the past 40 consecutive trading days, (historically never sustainable).

Fortunately, both Gold and Silver — especially the latter — remain cheap relative to currency debasement.  For Gold to match today’s debasement valuation, price need rise from 2159 to 3717 (i.e. +72%).  And with the century-to-date average of the Gold/Silver ratio at 68.1x, priced to that per Gold’s 3717 valuation puts Silver from today’s 25.41 to 54.58 (i.e. +115%) … just in case you’re scoring at home.

Drilling down to the near-term view, here next we’ve the daily bars and baby blue dots of trend consistency from three months ago-to-date for Gold at left and for Silver at right:

“Both do look over-extended, mmb…

Squire, they’re clearly stretched to the upside, however great bull markets (or the resumption thereof) do breakout as such.  ‘Course, market participation with a buy-side bias is foundational for the bull to run, and credit due both Gold and Silver, their contact trading volume for the past two weeks having been above average.

Indeed to further focus on the past two weeks, here we’ve the precious metals’ 10-day Market Profiles for Gold (below left) and for Silver (below right), their respective trading support and resistance levels as labeled.  Of note, whilst Gold’s volume is toward the higher prices, that for Silver is around mid-Profile.  But the aforementioned Gold/Silver ratio is now 85.0x, down from 89.1x a week ago.  So Silver is getting a well-overdue bid, price having just closed above 25.00 for three consecutive days, an event not having occurred since last 29 November through 01 December:

Towards the wrap, here’s The Gold Stack:

The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”):  3717
Gold’s All-Time Intra-Day High:  2203 (08 March 2024)
2024’s High:  2203 (08 March)
10-Session directional range:  up to 2203 (from 2088) = +115 points or +5.5%
Gold’s All-Time Closing High:  2189 (11 March 2024)
Trading Resistance:  2185 / 2164
Gold Currently:  2159, (expected daily trading range [“EDTR”]: 26 points)
10-Session “volume-weighted” average price magnet:  2157
Trading Support:  2155 / 2135 / 2126 / 2107 / 2092
The 2000’s Triple-Top:  2089 (07 Aug ’20); 2079 (08 Mar ’22); 2085 (04 May ’23)
The Weekly Parabolic Price to flip Short:  2001
2024’s Low:  1996 (14 February)
The 300-Day Moving Average:  1974 and rising
The Gateway to 2000:  1900+
The Final Frontier:  1800-1900
The Northern Front:  1800-1750
On Maneuvers:  1750-1579
The Floor:  1579-1466
Le Sous-sol:  Sub-1466
The Support Shelf:  1454-1434
Base Camp:  1377
The 1360s Double-Top:  1369 in Apr ’18 preceded by 1362 in Sep ’17
Neverland:  The Whiny 1290s
The Box:  1280-1240

‘Tis a fairly quiet week ahead for incoming Econ Baro metrics:  just seven are scheduled, four of which relate to Housing.  Still as cited, The Main Event is Wednesday’s FOMC “maintain the target range” decision.  But in and amongst the Statement, Powell Presser and FedSpeak, might the phrase “rate increase” slip out … just as a little future possibility?  Quel drame, mes amis…

Either way, with Gold paused per its detinue, consider adding more to your metals’ milieu!

Cheers!

 …m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”:  @deMeadvillePro

15 March 2024 – 09:18 Central Euro Time

The Swiss Franc at present is below today’s Neutral Zone; above same are the three elements of the Metals Triumvirate; BEGOS Markets volatility is moderate, Copper indeed having already traced 128% of its EDTR (see Market Ranges). Cac volume for the EuroCurrencies is rolling from March into that for June, whilst too for Oil is the volume from April into May. At Market Trends, breaking the case of all eight components having been in positive linregs is the Swiss Franc as the Dollar gets the bid over recent days: might the Fed have to raise? More on that in tomorrow’s Gold Update. The Econ Baro looks to complete the week with March’s NY State Empire Index and UofM Sentiment, plus February’s Ex/Im Prices and IndProd/CapUtil.

14 March 2024 – 09:32 Central Euro Time

Both Gold and Copper are at present below today’s Neutral Zones; above same is Oil, and BEGOS Markets volatility is pushing toward moderate, Copper having already traced 105% of today’s EDTR. Gold (2173) has dominant Profile trading support at 2165, and again by Market Values, Gold (in real-time) is +107 points above its smooth valuation line: (the Spoo at present is +171 points above same). ‘Tis a busy day for the Econ Baro, incoming metrics including February’s PPI and Retail Sales, plus January’s Wholesale Inventories.

13 March 2024 – 09:16 Central Euro Time

Copper is the sole BEGOS Market at present outside (above) its Neutral Zone for today; session volatility is light. At Market Trends, all eight components are in positive linreg, and six of the eight (save for Copper and Oil) have their “Baby Blues” of trend consistency in ascent. At Market Values (in real-time), the Bond, Euro and Oil are all essentially on their smooth valuation lines; Gold is +101 points “high” and the Spoo +180 points “high”. Nothing is due today for the Econ Baro, ahead of 12 incoming metrics over the next two days.

12 March 2024 – 09:13 Central Euro Time

Gold is at present below today’s Neutral Zone whilst the Spoo is above same; BEGOS Markets volatility is light, (albeit the Yen [not a BEGOS component] has traced 107% of its EDTR [see Market Ranges for those of the BEGOS Markets]). Recall from the current Gold Update that the yellow metal is very high above its smooth valuation line (per Market Values), in real-time now +121 points: historically as therein cited, some natural price pullback is to be expected. Otherwise, the five primary Markets are again in positive correlation with one another. For the Econ Baro today we’ve February’s CPI and Treasury Budget.

11 March 2024 – 09:21 Central Euro Time

The Bond and Swiss Franc are at present above today’s Neutral Zones; below same is the Spoo, and BEGOS Markets volatility is mostly light. Cac volume for the Spoo is moving from March into June, with 63 points of additional premium in the latter. The Gold Update cites the fresh spate of marginal All-Time Highs, (to as high as 2203); too, the Update describes a current S&P condition which only has occurred twice in the past 25 years, both prior cases leading to “corrections” of 16% to 18%. Our leading Market Rhythm at present on a 10-test swing basis is the Bond’s daily Parabolics, whilst on a 24-test swing basis ’tis the Swiss Franc’s daily Parabolics. The Econ Baro is quiet today ahead of 15 metrics due as the week unfolds.

The Gold Update: No. 747 – (09 March 2024) – “Gold Flies to Fresh All-Time Highs”

The Gold Update by Mark Mead Baillie — 747th Edition — Monte-Carlo — 09 March 2024 (published each Saturday) — www.deMeadville.com

Gold Flies to Fresh All-Time Highs

With The Gold Update now in its 16th calendar year and price having just made a series of marginal fresh All-Time Highs these past three trading days (2161 Wednesday, 2172 Thursday, 2203 Friday), on the surface we deem this as a somewhat exciting event, Gold having then settled out the past week yesterday at 2186.

However:  from a more studied purview, ’tis admittedly adequate to couch it all as rather “ho-hum” given how vastly undervalued Gold remains vis-à-vis the above Scoreboard.  Therein, the current market level of 2186 is -41% below the Dollar debasement valuation of 3716.  Or for you WestPalmBeachers down there, Gold still has a very long way to go up — and moreover — that ’twill so do given price historically always catches up to prior high levels of valuation.  This is starkly shown in the above right-hand panel, wherein clearly Gold whilst now nicely getting some up-curl remains well behind the money supply green line’s continuing to unfurl.  And to be sure:  this time ’round such catch-up process is seemingly taking forever.

Still, we take heart in Gold’s having thus far traveled this year some 38% of the route from last year’s settle (2072) toward this year’s forecast high (2375).  And from the “Wishful Thinking Dept.”, extrapolating the current year-to-date pace would place Gold at our 2375 forecast high come 21 June, followed by 2764 for year-end.  ‘Course, hardly are we holding our breath for it to all go that exquisitely perfect, but ’tis nonetheless a tasty technical tidbit.

Further from the “Keeping One’s Feet on the Ground Dept.” whilst such an extensive BEGOS Market (Bond / Euro / Gold /Oil / S&P) movement (be it up or down) naturally pulls price away from our proprietary “smooth valuation line”, as this next graphic shows, reversion to said smooth line eventually recurs over time.  And per the lower panel oscillator (price less valuation), at present, Gold (2186) is +128 points above that line (2058):  obviously the prior two such extremes (red vertical lines) from a year ago-to-date in turn both lead to at least some material near-term price retrenchment. That cited, Gold’s recent peaks across the past three months in the 2090-2070 area appear supportive, (or more optimistically:  gone are the days of the 1900s).  Here’s the graphic:

Next let’s turn to Gold’s weekly bars and parabolic trends from one year ago-to-date.  This past week’s price upthrust comprehensively hoovered away the remnants of the ever so short-lived red-dotted parabolic Short trend, flipping it to Long in fine style per the new rightmost blue dot.  Therein, we can’t help but notice the past two parabolic Short trends could not manage more than three weeks of red-dotted duration.  Gold’s +5.5% low-to-high intra-week gain was the best in nearly a year, since that ending 17 March 2023, and the +4.5% net weekly gain the best since that ending this past 13 October. Think the buyers are in charge?  “YES!!!” indeed:

Meanwhile in charging along with the stagflation theme nauseatingly herein detailed a week ago, the Economic Barometer’s set of 13 incoming metrics produced — as surmised — just five period-over-period improvements, notably with respect to job creation, albeit the rate of February’s Unemployment (despite the increase in Payrolls) jumped two pips from 3.7% to 3.9%.  Still, there were some sore stinkers in the past week’s bunch:  January’s Factory Orders sank at a -3.6% pace, the month’s Trade Deficit was the worst since that of last April, and credit cards rocketed into orbit as January’s Consumer Credit level leapt from $0.9B in December to $19.5B.  “When ya don’t gots da dough, get out da plastic!”  Afterall, there was almost no growth in February’s Hourly Earnings.  And as for the Econ Baro itself, straight down continued as … well … straight down, even as Federal Reserve Chairman Jerome Powell in his Humphrey-Hawkins Testimony remained non-committal toward any near-term change in his Bank’s Funds Rate, (for which as you regular readers know the case can be made to actually increase it).  “Oh, say it ain’t so!”  Here’s the Baro:

“But the S&P 500 keeps sailing right along, eh mmb?

So ‘twould appear, Squire, albeit the mighty Index did just (barely) record a down week (-0.3%), only its third such demise of not just the past the ten weeks year-to-date, but indeed since that ending 23 October … which for those of you scoring at home means the Casino 500 has spun 16 up weeks of the last 19.  How rare are such streaks? On a mutually-exclusive basis, before this run, it had only occurred on two other occasions across the past 25 calendar years (during 2018 and 2011, prior to which was  during 1989).  And following the 2018 stint, the S&P then “corrected” as much as -18.3% within three months, whilst after the 2011 stint, the Index similarly dumped -16.9%.  Also, this Casino 500 is now characterized as 35 consecutive trading days “textbook overbought”.  So Get Ready”–[The Temptations, ’66].

Tempting, too, is the track of Gold, certainly so since mid-February from the rightmost dominant low (1996) in the following left-hand panel of price’s daily bars from three months ago-to-date.  In the right-hand panel we’ve Gold’s 10-day Market Profile with its bevy of volume-dominant support levels as labeled:

Silver’s setup is quite similar with her daily bars (below left) and Profile (below right).  Again to expound upon that which we regulary harp, Silver — given the Gold/Silver ratio now at 89.1x — remains CHEAP!  The ratio’s century-to-average is 68.1x:  plug that into your HP 12C to see where Silver “ought” be(!)

To finish, with 15 metrics due next week for the Econ Baro including the Bureau of Labor Statistics’ reads on the pace of February inflation at both the retail and wholesale levels, we can’t resist going with this closing graphic as — after all — ’tis The Gold Update No. 747:

What fuels your financial jet?  We trust ’tis Gold!

Cheers!

 …m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”:  @deMeadvillePro

08 March 2024 – 09:18 Central Euro Time

The Euro is at present below its Neutral Zone for today; above same is Silver, and BEGOS Markets volatility is light with February’s Payrolls data in the Econ Baro’s balance. Going ’round the Market Values page (in real-time): the Bond is essentially on its smooth valuation line as is the Euro, Gold is +113 points “high”, Oil is +3.2 points “high”, and the Spoo +211 points “high”. The “live” P/E of the S&P (futs-adj’d) is 47.4x and the yield 1.381%; annualized three-month risk-free dough yields 5.228%. Gold continues to make marginal All-Time Highs, the latest being 2172; more of course on that in tomorrow’s Gold Update.

07 March 2024 – 09:12 Central Euro Time

Gold is ticking over marginal highs: presently 2164, the fresh All-Time High is now 2169. The yellow metal along with Copper are both at present above today’s Neutral Zones; below same is the Spoo, and BEGOS Markets volatility is mostly light, save for Gold having traced 70% of its EDTR (see Market Ranges) to this point. All five primary components (Bond/Euro/Gold/Oil/S&P) through last evening are in positive correlation with one another. The Econ Baro looks to metrics including January’s Trade Deficit and Consumer Credit, along with revisions to Q4’s Productivity and Unit Labor Costs. FedChair Powell completes his Humphrey-Hawkins Testimony today before the Senate Banking Committee.

06 March 2024 – 09:18 Central Euro Time

Gold has yet to crack its 04 December All-Time High (2153), albeit ’tis knocking on the door; again this is in the context of price trading up this year toward our forecast high of 2375, so the next incremental high is not that big a deal. At present, we’ve Copper above its Neutral Zone for today; the rest of the BEGOS Markets are within same, and volatility is mostly light. A final quick peek at Q4 Earnings Season in looking beyond just the S&P 500: of the 1,859 total companies reporting, just 52% improved their bottom lines over the prior year’s like quarter. For the Econ Baro today we’ve February’s ADP Employment Data, plus January’s Wholesale Inventories. Too, FedChair Powell commences his two-day Humphrey-Hawkins Testimony beginning with the House Financial Services Committee. Then late in the session we get the Fed’s Tan Tome.

05 March 2024 – 09:14 Central Euro Time

Gold settled yesterday at an All-Time Closing High (2123); ‘course, the All-Time High itself remains 2152. At present, the Bond is above today’s Neutral Zone; the balance of the BEGOS Markets are within same, and volatility is again light-to-moderate. For Gold, our best Market Rhythm on a pure swing basis (10-test) is its 8hr Moneyflow; on a profit-take basis, ’tis Gold’s daily Parabolics, (see Market Rhythms). Silver (24.14) remains exceptionally cheap relative to Gold, the Gold/Silver ratio 88.1x vs. the century-to-date average of 68.1x. The Econ Baro looks to February’s ISM(Svc) Index plus January’s Factory Orders.

04 March 2024 – 09:15 Central Euro Time

The Euro, Swiss Franc and Copper are all at present above today’s Neutral Zones; the other BEGOS Markets are within same, and volatility is light-to-moderate. The Gold Update cites the early machinations of stagflation as Econ Baro data suddenly weakens, yet inflation data moves up and away from the Fed’s +2.0% target. Whilst we received a positive Swiss Franc signal last week as the “Baby Blues” (see Market Trends) moved above their -80% axis, of note the daily Parabolics have just flipped to Short, one of the top current Market Rhythms; so perhaps price works lower, then higher, (barring the Baby Blues reverting southerly). The Econ Baro awaits 13 incoming metrics for the week (none today), of which just 5 “by consensus” are expected to have improved period-over-period. Finally, Q4 Earnings Season has concluded with 4 of 10 S&P 500 constituents not having improved their year-over-year bottom lines: and yet the S&P sits at an all-time high (5137), the “live” P/E at 46.8x.

The Gold Update: No. 746 – (02 March 2024) – “Gold Grabs Center-Stage as Stagflation Starts to Rage”

The Gold Update by Mark Mead Baillie — 746th Edition — Monte-Carlo — 02 March 2024 (published each Saturday) — www.deMeadville.com

Gold Grabs Center-Stage as Stagflation Starts to Rage

A bold title to head this recital, Gold on Friday posting its best low-to-high intraday gain (+2.4% or +50 points) since 13 December toward settling the week at 2092, essentially tying its highest-ever weekly closing price (with that recorded this past 01 December).  To maintain perspective, Gold’s All-Time High remains 2152 (per last 04 December).

Credit Gold’s Friday flight with our Economic Barometer consumed by blight.  Straightaway as the incoming metrics low-lighted economic decay, no sooner had we posted the Econ Baro just after the 16:00 (CET) barrage of negative data that Gold got the bid, the FinMedia in full throat for the Federal Reserve to cut rates.  But as to inflation:  ’tis going the wrong way!

So as succinctly set out in his 2008 tome “When Markets Collide”, one Mohamed El-Erian writes of stagflation as “a situation characterized by disappointingly low economic growth and high inflation.”  Is such situation suddenly starting?  From our bold title, let’s get straight to two bold graphics: first the economy and second inflation.

1)  The Economic Barometer:  just as ’twas all going great for the StateSide economy, the FinMedia consistently reminding us of the successes in having embraced Bidenomics, what just happened?  In turning below to the Econ Baro from one year-ago-to-date, that rightmost vertical drop is its second-worst six trading-day plunge since this time a year ago.  Should such reversal of fortune continue to work its way into the data for computing Gross Domestic Product, that’ll be El-Erian’s disappointingly low economic growth” … Whoomp! There it is!” 

 

 

2) Inflation:  the rampant FinMedia speculation as to the timing of the Federal Reserve cutting rates into rising inflation is one of the most oxymoronic concepts across the financial spectrum in our memory since dear old Dad taught us how to read the newspaper’s stock tables back in the 1960s.  (The other two more glaring incongruities being the S&P 500 trading at double its historical earnings support and Gold trading at half its currency debasement valuation).

Increasing inflation, indeed.  The retching selection of puke-green for the following table summarizing January’s key inflation measures is ever so appropriate.  Therein are the six key StateSide inflation gauges as reported for January, their respective 12-month summations, and January’s pace annualized.  Remember:  the Fed’s annualized inflation target is 2.0%:  every reading in this table above 2.0% is highlighted in red, the average readings now running from 3.4% to 4.4%.  And there’s El-Erian’s high inflation”:

 

To be a FedHead right now is fraught with trying to avoid making a “policy mistake”.  Ostensibly-speaking,  the Federal Open Market Committee is comprised of smart, intelligent folks, (yeah they’ve got the always-lovable Goofball Goolsbee in there); but the FOMC candidly know in their souls that inflation is going the wrong way.  To cut rates is to further stimulate inflation even as economic data deteriorates.  The FinMedia comprehensively expect the Fed to cut; and the Fed has to now deal with the confidence (or lack thereof) of “How can we fool ’em today?”

Therefore: this one-two bold combination of the Econ Baro’s sudden distress and inflation frustration is not a pretty picture.

As to Gold finally getting a bid, ’tis delightfully satisfying to see price bucking its weekly parabolic Short trend.  Even given our expectations for Gold to succumb to said trend which was confirmed three weeks ago, price essentially has gone nowhere but up, and we thus revel in the joy of being wrong, at least to this point.  For as you can next see in our year-over-year graphic of Gold’s weekly bars, price at present has moved well up and away from the underlying 2020-1936 green-bounded structural support zone:

‘Course what really continues to stand out for us is the lagging performance of the precious metals’ equities.  It being month-end (plus one trading day in March), here also year-over-year are the percentage tracks of Gold and those of its key equities brethren.  From worst-to-first they rank as follows:  Newmont (NEM) -28%, Franco-Nevada (FNV) -20%, Pan American Silver (PAAS) -16%, the Global X Silver Miners exchange-traded fund (SIL) -13%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) -3%, Agnico Eagle Mines (AEM) +6%, and Gold itself +13%.  So out of favour remain the equities!  (Nudge-nudge, wink-wink, elbow-elbow…):

As for 2024’s brief stint year-to-date, despite Gold’s Friday upstate, price so far hasn’t done that great.  For in turning to the BEGOS Markets Standings to this point of the year, Gold is up but a wee +1.0%, (even as the Dollar Index is +2.8%, but as you know, Gold plays no currency favourites).  Topping the podium at present is Oil, +11.9% followed by the “Casino 500” +7.7%.  Indeed specific to the S&P, through the first 42 trading days of this year, that +7.7% gain ranks second only to 2019’s stint (+11.4%) across the same number of days.  But there’s a glaring difference between  Now and Then” –[The BeaTles, ’23].  Then the “live” price earnings ratio of the S&P 500 was 30.6x (yield 2.054%).  Now ’tis 46.5x (yield 1.400%.).  Three-month risk-free dough then?  2.375%.  And now?  5.215%.  Yet you’re still in the stock market?  Sheer guts.  Regardless, as the fuse burns off, let’s get to the Standings before the whole thing blows up:

Too, how about Q4 Earnings Season for 2023 which just finished yesterday (Friday).  Within that calendar window, 457 of the S&P 500’s 503 constituents reported their results:  only 273 (60%) improved over Q4 of 2022.  Out of the past 27 quarters, this most recent one ranks ninth-worst as four in ten of the best and brightest from the equities world couldn’t increase their earnings.  And yet the S&P now sits at an all-time high (5137)?  What is going on?  Indeed, we’ve now the Index as 30 consecutive trading days “textbook overbought”.

 “And, mmb, it seems like the S&P keeps going up on the same news again and again…

‘Tis quite diabolical that, Squire.  These days, the S&P 500 goes up on anything, even if ’tis already priced-in a billion times over.

‘Course the precious metals relative to currency debasement remain stubbornly cheap.  Vis-à-vis our opening Gold Scoreboard, priced today at 2092, Gold is -42% below its U.S. “M2” money supply debasement value of 3715, even in accounting for the creeping increase in the supply of physical Gold, (today 213,056 tonnes).  And with the Gold/Silver ratio now 89.6x, to “right it” to the century-to-date average of 68.1x puts Silver (currently 23.35) up an additional +24% to 30.72.  Further, were Gold priced today at that Dollar debasement value of 3715, applying that average ratio puts Silver at 54.56 … just in case you’re scoring at home.  Again, do not forget the Silver.

And as we go ’round the horn for all eight BEGOS Markets by their daily bars from 21 trading days ago-to-date (one month), both Gold and Silver per Friday sport impressive price spikes.  Still by the baby blue dots, the precious metals continue to lack trend consistency:

Next for both Gold on the left and for Silver on the right we’ve their respective 10-day Market Profiles.  Silver’s stack looks a bit more protective by its underlying bars, whereas Gold which moved swiftly over less recently-priced territory appears more porous:

Finally it being month-end plus a day, here we’ve the broad view of Gold’s strata-defined structure across the past 15 years, our 2024 forecast high sitting up there at 2375.  That rightmost candle is 01 March alone:

To sum it all up for this week, we’ve emphasized the Fed having to face what appears as the early machinations of a stagflating economy, a “damned if they do, damned if they don’t” scenario.  Despite all the FinMedia blather about inflation being tamed — given we instead do the math — ’tisn’t.  Our puke-green table with the red 2.0% overages ought be on every news desk in the nation and ’round the world.  (But as is sadly typical, the truth wrecks the narrative).  And as for the suddenly slipping economy, 13 metrics hit the Econ Baro next week, of which just five “by consensus” are supposed to show period-over-period improvement.

Thus as the cost to survive goes on the rise whilst that upon which you rely slips by, ’tis probably a good idea to have a little Gold!  Or a lot of Gold!

Cheers!

 …m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”:  @deMeadvillePro

01 March 2024 – 09:20 Central Euro Time

The Swiss Franc and Copper are both at present below today’s Neutral Zones; above same is the Spoo, and volatility is light-to-moderate. We’re a bit surprised with equities’ upside move yesterday on the heels of a firm Core PCE Report for January at an annualized pace of +4.8%, well beyond double that sought by the Fed; (more on that in tomorrow’s 746th edition of The Gold Update); still, the Dollar Index hasn’t backed off a wit, sensing that current rate levels shan’t decline any time soon. The Econ Baro rounds out its week with February’s ISM(Mfg) Index and revision to UofM Sentiment, plus January’s Construction Spending.

29 February 2024 – 09:17 Central Euro Time

We’ve reached “PCE” Day” and all eight BEGOS Markets are at present within their respective Neutral Zones for today; volatility is light; for the record, the non-BEGOS Market Yen has already traced 140% of its EDTR (see Market Ranges for the BEGOS components); there are musings that Japan may move toward an interest rate increase. The Spoo which has stalled in recent days is nonetheless by Market Values +124 points (in real-time) above its smooth valuation line. Along with January’s “Fed-favoured” Core PCE reading (which by consensus is expected to be double December’s pace), other incoming metrics for the Econ Baro today include the month’s Personal Income/Spending, Pending Home Sales, and February’s Chi PMI.

28 February 2024 – 09:17 Central Euro Time

Red is the watchword for the BEGOS Markets, all the components to the South, save for the Bond, the cac volume for which is rolling from March into that for June; session volatility is again light. The markets have taken on a “wait and hold” approach ahead of tomorrow’s release of January’s Fed-favoured PCE data. At Market Trends, the Swiss Franc’s “Baby Blues” of trend consistency yesterday confirmed crossing above their key -80% axis, indicative of high price levels near-term. And today for the Econ Baro we’ve the first revision to Q4 GDP.

27 February 2024 – 09:49 Central Euro Time

The components of the Metals Triumvirate are all above their Neutral Zones; none of the other BEGOS Markets are below same, and volatility continues as light to this time of day. On a 10-test swing basis, our most consistent Market Rhythm is the Bond’s daily Parabolics; on a 24-test swing basis ’tis the Spoo’s 1hr Moneyflow. By Market Trends, only Oil and the Spoo are in positive linreg, albeit the Euro appears near to rotating from negative to positive. For the Econ Baro today we’ve February’s Consumer Confidence and January’s Durable Orders.

26 February 2024 – 10:05 Central Euro Time

Both Silver and Copper are at present below today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is again light. The “flu-abbreviated” Gold Update reminds us of the yellow metal having only just started a fresh weekly parabolic Short trend, despite price’s resiliency to this point; noted therein is traders’ new awareness of the Fed potentially having to raise rather than cut rates, something upon which we’ve occasionally mused since the start of the year; (PCE data is due Thursday). This is the final week of Q4 Earnings Season. And the Econ Baro begins a fairly busy week with January’s New Home Sales.

The Gold Update: No. 745 – (24 February 2024) – “Gold – Short n’ Sweet”

The Gold Update by Mark Mead Baillie — 745th Edition — Monte-Carlo — 24 February 2024 (published each Saturday) — www.deMeadville.com

Gold – Short n’ Sweet

Valued readers ’round the world:  today is our fifth day as beset with a nasty flu.  So this edition (no. 745) is one of our most minimal missives extending as far back as 21 November 2009 (no. 1).  But having never missed a single solitary Saturday, we’ll be damned if some viral bug is going to pull our streak’s plug.  (Or as someone quipped years ago:  “Ya don’t mess with the mmb.”)

So here we go with Gold – Short n’ Sweet“.  We’ve just a few of our core foundational graphics, albeit without the usual annotating.  “Short” in this case is a double entendre for the missive’s brevity, but moreover a reminder that Gold’s weekly parabolic trend a week ago flipped from Long to Short.  “Sweet” in this case is that Gold hasn’t succumbed a wit to such new Short trend, price having settled yesterday (Friday) at 2046, the +1.0% net weekly gain being second-best through the young year’s eight weeks-to-date.  Still, we continue to look for Gold to work lower, protected more broadly by the 2020-1936 structural support zone.  You can refer back to last week’s piece (no. 744) as to how low may be low.  Meanwhile, here are the weekly bars from one year ago-to-date:

Next we’ve Gold’s two-panel graphic featuring the daily bars from three months ago-to-date on the left, and 10-day Market Profile on the right.  Clearly Gold’s baby blue dots of trend consistency are directionally neutral, whereas the Profile suggests trading support in the 2030s, (but we’re not holding our breath):

And of course for Silver we’ve same, her “Baby Blues” (below left) having gone completely stagnant.  Sister Silver settled the week at 22.98, the Profile’s (below right) white bar being 23.00 and representing the most commonly-traded price of the past two weeks.

As for the Economic Barometer, ’twas a very quiet week:  just three incoming metrics were recorded.  Not to worry:  next week has 14 metrics scheduled including the “Fed-favoured” inflation gauge of Core Personal Consumption Expenditures Prices.  And the consensus estimate for January’s pace (+0.4%) is double that recorded for December (+0.2%).  Here’s the Baro:

To close, these three notes.

■ You regular readers will recall that in this year’s first Gold Update (some seven weeks ago) we “contrarily” put forth the notion (not a prediction) that the Fed perhaps shall have to continue raising rates.  No, we were not maligned, made fun of, nor impugned; but at that time, all the talk was as to when the Fed would begin cutting rates because ’twas so obvious they’d have to so do.  Really?  Do the math, just as we graphically herein detailed a week ago.  Well guess what suddenly came to the fore this past Tuesday.  Ready?  Bloomy“Markets Start to Speculate if the Next Fed Move is Up, not Down.”  Dow Jones Newswires“Traders are flirting with the idea of a Fed Rate Hike as January Meeting Minutes Loom.”  You see, if we just sweep around them, they eventually catch up.

 Next week is the grande finale to Q4 Earnings Season.  And given the relentless rise in the S&P 500, it must be one of the best Earnings Seasons ever, right?  Wrong.  For the S&P 500, the average number of constituents improving year-over-year is typically 66%.  This Earnings Season?  Just 60%.  ‘Tis why the “live” P/E of the S&P is stuck up in the stoopidsphere at 46.3x

 Brief as we are today, don’t overlook the website’s other market-leading pages, notably for both Gold and Silver!

Cheers!

 …m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”:  @deMeadvillePro

23 February 2024 – 09:31 Central Euro Time

At present, all eight BEGOS Markts are inside of today’s Neutral Zones, and volatility is light. Copper’s cac volume is moving from March into that for May, and we ought see same for Silver as the new week unfolds. The “live” P/E of the S&P is now 49.0x, exemplary of the comparatively weak Q4 Earnings Season, which itself has one more week to run even as the Index continues to ascend. Our top Market Rhythm for swing consistency (10-test basis) is the Euro’s 30mn Parabolics; more broadly (24-test basis) ’tis Silver’s 30mn Parabolics. Hardly robust is Gold (2030) as it tries to defy the 2020-1936 structural support zone: more on it all in tomorrow’s 745th edition of The Gold Update.

22 February 2024 – 09:29 Central Euro Time

The EuroCurrencies, Metals Triumvirate, and Spoo are all at present above their respective Neutral Zones for today; BEGOS Markets volatility is moderate-to-robust, the Euro having notably traced 116% of its EDTR (see Market Ranges). The “live” P/E of the S&P is 46.9x and the yield 1.439% versus an annualized 5.235% on three-month risk-free dough; the Index is now 23 consecutive trading days as “textbook overbought”; as to the Spoo, ’tis +160 points above its smooth valuation line (see Market Values). The Econ Baro concludes its very quiet week with January’s Existing Home Sales.

21 February 2024 – 09:28 Central Euro Time

Silver and Copper are at present above today’s Neutral ones; the Spoo is below same, and volatility is mostly light. By Market Trends: Silver, Oil and the Spoo are sporting positive linregs; those for the Bond, Euro, Swiss Franc, Gold and Copper are negative. Some seven weeks ago we speculated on the Fed potentially having to raise rather than cut rates: the FinMedia and now just starting to pick up that notion, (more on that in next Saturday’s edition of The Gold Update). Nothing is due for the Econ Baro today; however, the FOMC’s Minutes from the 30/31 January meeting are to be released.

20 February 2024 – 11:13 Central Euro Time

The BEGOS Market’s two-day session continues with both the Euro and Gold at present above their respective Neutral Zones for today, whilst below same are Silver and The Spoo; volatility is moderate. Leading our Market Rhythms for swing consistency (10-test basis) are the Bond’s daily Parabolics and Copper’s 1hr Parabolics, whilst on a 24-test basis we’ve Copper’s 30mn Parabolics and same study for Silver. For Oil (currently 77.71), we’ve Market Profile support at 77.60; for the Spoo (currently 4998) Market Profile resistance shows at 5015. January’s Leading (i.e. lagging) Indicators come due for the Econ Baro.

19 February 2024 – 09:15 Central Euro Time

‘Tis the first of a two-day session for the BEGOS Markets (given today’s StateSide holiday). At present, both the Bond and Silver are below today’s Neutral Zones, whilst above same are Gold and the Spoo; volatility is light-to-moderate, Silver having already traced 76% of its EDTR (see Market Ranges). The Gold Update re-muses over the notion of the Fed perhaps having to raise (rather than stand pat or cut) rates; and with Gold’s weekly parabolic trend having flipped from Long to Short, we anticipate the 2020-1936 support zone seeing further testing. Following a very busy week of 19 incoming metrics for the Econ Baro, just three are on the slate this time ’round. Q4 Earnings Season has two weeks yet to run: specific to the S&P 500, of the 364 constituents having thus far reported, 62% (276) having improved their bottom lines over Q4 of a year ago.

The Gold Update: No. 744 – (17 February 2024) – “More Gold Slippin’ as Inflation Renews Rippin’”

The Gold Update by Mark Mead Baillie — 744th Edition — Monte-Carlo — 17 February 2024 (published each Saturday) — www.deMeadville.com

More Gold Slippin’ as Inflation Renews Rippin’

We yet again reprise that from this year’s first edition of The Gold Update:

“…But in seeing the Dollar take flight to start this year — indeed recovering a 10-day losing streak in just the first two days of 2024 — along with the Bond’s fresh demise as yields rise, might renewed inflation be taking first prize?  In other words:  what if the Fed instead tightens … surprise!…”

At that 06 January writing:

  • The Dollar Index was 102.155; ‘tis now 104.195;
  • The U.S. Treasury average product yield (30yr, 10yr, 5yr, 3mo) was 4.368%; ‘tis now 4.564%.

And now just in this past week on January’s renewed inflation front:

  • Core retail inflation (CPI) was +0.4% (+4.8% annualized pace), a 9-month high;
  • Core wholesale inflation (PPI) was +0.5% (+6.0% annualized pace), a 21-month high;
  • And both headline numbers (CPI & PPI) were +0.3% (+3.6% annualized paces), to 4-month highs.

‘Course, the FinMedia anticipates rate cuts, for as we’ve written, the tongue-in-cheek optic is:  as says the media, so does the Federal Reserve, (the political characterization touted as whatever it takes to maintain the present balance of power in Washington DC).  However:  the declining Treasury market says otherwise; and historically, ’tis the market that leads the Fed.

 “So mmb, is it your prediction that the Fed is actually going to have to raise rates?

Not a prediction, Squire; rather a mathematically valid observation.  Obviously the January inflation data (arguably aberrational) went the wrong way.  Albeit in the Fed’s favour, the 12-month summations of inflation at the wholesale level are duly below the +2% target; but at the retail level ’tis +3% headline and nearly +4% core, both a fair piece above +2%: and that’s on the consumer, who makes up some 70% of the Stateside economic engine.  Thus to cool that overheated engine, the Federal Reserve’s Open Market Committee at some point may actually be compelled to again vote to raise rates.  That’s just the way it works.  Here it all is graphically from one year ago-to-date, the four panels identically scaled for comparable context and the Fed’s +2% target as each red axis.  Note:  the annualized (blue line) levels in all four cases for January are well-above such +2% target:

‘Course, January’s missing puzzle piece at present is Personal Consumption Expenditures Prices, such “Fed-favoured” data not due until 29 February; (the subsequent FOMC Policy Statement is not scheduled until 20 March).  Thus whilst we wait, let’s check Gold’s gait.

Fundamentally, Gold (at least by conventional wisdom) can have its nerves stir should a rate scare impair.  To wit, price settled the week yesterday (Friday) at 2026; ’twas Gold’s fifth losing week of the past seven — and admittedly — most of our missives year-to-date have had a negative near-term price bias.  Thus hardly is Gold’s -5.9% net run down from its 2152 All-Time High (04 December) that unexpected.

Technically, and indeed expectedly, Gold’s weekly parabolic trend — following a 17-week Long streak — finally succumbed to Short as confirmed at yesterday’s close.  Per the following chart of Gold’s weekly bars from one year ago-to-date, the rightmost encircled red dot now implicates testing of the underlying green-bounded support structure (2020-1936), the low this past week already having reached down to 1996:

So as a fresh parabolic Short trend commences, the burning question invariably is “How low shall price go?”  Whilst nobody knows, our best sense is the aforeshown 2020-1936 support structure not only shan’t bust, but shall not be that deeply penetrated.  The maximum downside adversity of the past three such Short trends was respectively just -41, -46, and again -41 points, which if replicated from the present 2026 level would find Gold reaching no worse than 1985-1980.  Still in more broadly reviewing the past 10 Short trends, the maximum median adversity was -78 points (if replicated, to 1947 from here) and the maximum average adversity -103 points (if replicated, to 1923 from here, which would improbably be beyond the support structure). ‘Course with Gold by the opening Scoreboard’s valuation at 3739, any near-term decline can merely be viewed as noise — and depending on one’s cash management parameters — an opportunity to add to one’s pile..

Speaking of piling up, this past week brought 19 metrics into the Economic Barometer (2 more than we’d originally stated per our prior missive).  Without combing back through the Baro’s 27 calendar years of data, ’twas the largest pile for a single week in memory.  And therein, 11 of the metrics improved period-over-period, including the CPI and PPI data.  Remember:  increasing inflation nominally is an Econ Baro positive per the principle of “the rising tide of inflation lifts all boats.”  Why even February’s Philly Fed Index posted a gain for just the second time in the past 18 months … “Stop the presses!”  Still, there were some stinkers, notably featuring shrinkage in January’s Industrial Production and Retail Sales, (the latter subject to natural post-holiday belt-tightening), and the month’s Business Inventories having backed up.  But all-in-all, the Baro ratcheted up a bit more in our year-over-year picture:

 

Meanwhile, the S&P 500 (red line across the Econ Baro) through 33 trading days thus far in 2024 has made all-time highs (the latest being 5048) within 13 of those sessions.  Priced today at 5006, the “live” price/earnings ratio of this “Casino 500” settled the week at 47.5x, vastly beyond the internet “parroted” version of 27.6x.  Why the difference?  The latter version (whilst rightly using “trailing 12-month earnings”) includes “negative p/e ratios” and is unweighted.  The latter version thus is cheating.  As to the current Casino market cap of $43.7T, the liquid money supply (U.S. “M2”) of $21.0T covers only 48% of that; (just something to consider should you sell your stock at the same time as does everyone else).

And still to this day, “everyone else” doesn’t own any Gold, (or so we’re told).  Some say less than one percent of the investing public hold Gold, although in querying AI (Assembled Inaccuracy), it “says” that “10%-15% of managed portfolios” have some (likely indirect) exposure to Gold, even as price trades some -46% below the aforementioned Scoreboard valuation.  But for you WestPalmBeachers down there, why underpay for Gold when you can overpay for the Casino 500?  (Just a passing thought).

Passing through lower price levels somewhat of late has been Gold.  Here next we’ve the two-panel chart of Gold’s daily bars from three months ago-to-date on the left and those for Silver on the right.  In both cases, the baby blue dots of regression trend consistency are, on balance, depicting lack thereof:

Then, too, we’ve the 10-day Market Profiles for the yellow metal (below left) and white metal (below right).  Of interest is the high level of Silver in her Profile versus Gold’s more midrange position.  Indeed as noted earlier in Gold’s weekly bars graphic, the Gold/Silver ratio now at 86.3x is its lowest reading year-to-date.  However:  the century-to-date average being 68.1x, were Silver to rise (and Gold to stay fixed) such as to bring the ratio down to that average, price would be 29.76, a sizable +21% above today’s 23.48 level, (just in case you’re scoring at home):

We’ll close with this absurd deception from the rather desperate “It’s All Good!” FinMedia.  (Ensure you’re not sipping your favourite beverage, lest it spew from your nose given uncontrollable laughter).  Following Tuesday’s release of renewed retail inflation per the CPI, floundering CNN Business ran with this headline, (put your glass down…):  “Good News for Americans:  Inflation cooled back down in January”.  Again, the CPI’s pace increased from +0.2% in December to +0.3%, and its core reading from +0.3% to 0.4%.  Cool, baby.

Cheers!  (And don’t forget the Gold!)

 …m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”:  @deMeadvillePro

16 February 2024 – 09:12 Central Euro Time

The Bond and Swiss Franc are at present below their respective Neutral Zones for today; above same is Copper, and volatility is mostly light, (the red metal the sole component having already traded in excess of 50% [54%] of its EDTR [see Market Ranges]). At Market Trends, save for Oil and the Spoo, the other six BEGOS Markets are in linreg downtrends. And in going ’round the horn in real-time for the five primary components’ Market Values: the Bond is better than -4 points “low” per its smooth valuation line, the Euro -0.023 points “low”, Gold -36 points “low”, Oil nearly +4 points “high”, and the Spoo +185 points “high”. The Econ Baro concludes its very busy week with February’s UofM Sentiment Survey, plus January’s PPI and Housing Starts/Permits.

15 February 2024 – 09:13 Central Euro Time

We’ve at present both the Bond and Swiss Franc above today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is light. Looking at Market Rhythms, on a 24-test wing basis for consistency, Copper’s 30mn Parabolics ranks 1st. By Market Trends, Copper’s “Baby Blues” are in decline, as are those for all the other components, save for the Spoo, the Market Value for which (in real-time) is +170 points above its smooth valuation line. The “live” P/E of the S&P (fut’s adj’d) is 49.7x. ‘Tis a massive set of incoming metrics (11) for the Econ Baro today: included therein are February’s NY State Empire Index, Philly Fed Index and NAHB Index, plus January’s Retail Sales, Ex/Im Prices and IndProd/CapUtil, plus December’s Business Inventories.

14 February 2024 – 09:19 Central Euro Time

Silver of late seems to oft be the BEGOS Markets’ sole overnight outlier: ’tis at present below its Neutral Zone for today, whilst all the other components are within same; volatility is quite light with Copper sporting the widest EDTR tracing (see Market Ranges) of just 38% to this point. As perhaps provocatively put at times year-to-date in The Gold Update: what if the Fed had to again raise rates to battle increasing inflation? (January’s “Fed-favoured” Core PCE pace is not due until 29 February). With better than two weeks still to run in Q4 Earnings Season, it remains that 4 in 10 S&P 500 constituents have not improved their year-over-year bottom lines. At Market Values, despite the -1.4% drop yesterday in the S&P, the Spoo (in real-time) is still 133 points above its smooth valuation line; the Index itself is 18 consecutive trading days “textbook overbought” and the “live” (futs-adj’d) P/E is now 47.8x, essentially double where ’twas when first established a dozen years ago.

13 February 2024 – 09:18 Central Euro Time

At present the Swiss Franc is below today’s Neutral Zone, whilst above same are all three elements of the Metals Triumvirate; volatility is mostly light. As anticipated both in yesterday’s commentary and the current edition of The Gold Update, the yellow metal’s weekly parabolic trend — after having been Long for 17 weeks — has provisionally flipped to Short, confirmation of which shall come at Friday’s settle, (barring a rocket shot above 2152); as noted, this technically opens the door for further testing of the 2020-1936 support structure; strictly on a swing basis for consistency, Gold’s best Market Rhythm is currently the 4hr Moneyflow. We’re notably eying the Core CPI in today’s retail inflation data for the Econ Baro: such Core reading may indicate inflation running at a +3.6% pace.

12 February 2024 – 09:35 Central Euro Time

The BEGOS Markets start the week with Silver as the sole component at present outside (above) its Neutral Zone for today; session volatility is mostly light, save for the white metal having already traced 82% of its EDTR (see Market Ranges). The Gold Update notes the narrowness of the yellow metal’s trade of late, with the likelihood the weekly parabolic Long trend shall now flip to Short; emphasis is placed on the S&P 500’s ongoing overvaluation and potential positioning within the stock market’s broad-based “emotional” cycle, suggestive of the Index having reached the inflexion point from where “it all goes wrong.” The Econ Baro’s busy week of 17 incoming metrics begins with January’s Treasury Deficit.

The Gold Update: No. 743 – (10 February 2024) – “This is Where it All Goes Wrong (Got Gold?)”

The Gold Update by Mark Mead Baillie — 743rd Edition — Monte-Carlo — 10 February 2024 (published each Saturday) — www.deMeadville.com

This is Where it All Goes Wrong (Got Gold?)

As occasionally is our wont, we start with stocks.  And specific to the somewhat sensationalized title of it all going wrong, “This” is applicable not just to now, but realistically since mid-year 2020 upon the S&P 500’s complete recovery from its COVID collapse in returning to an already then excessively overvalued level in the low 3200s. Today, the S&P 500 (aka “Casino 500″) is at 5027, a +50.1% increase since 18 August 2020, the day the S&P reached back to where ’twas brewing prior to COVID’s undoing.

Since then with constituents’ earnings vapidly unsupportive of price — especially with safe money today earning better than 5.2% — “This” is synonymous with “Disaster”.  And yet per our S&P MoneyFlow page, dough is being thrown into the market at amounts unconscionable, two of our measures there “suggesting” the S&P ought be better than +1000 points higher than currently ’tis! You cannot make this stuff up!

In having couched the S&P’s inane overvaluation in so many ways, we’ve even written of having run out of adjectives to describe it, save for perhaps this one:  here in the small Mediterranean fishing village of Monaco, we look at across the deMeadville office table at one another and regularly say the same thing:  “The market is crazy…”

However, the good news (or if you prefer, bad news) now is that other keen analysts (i.e. with a properly functioning brain) are increasingly noting the S&P approaching dire straits.  Indeed, infamous hedgie David M. Einhorn’s comments (hat-tip Barry Ritholtz’s “Masters in Business”) this past Thursday particularly parallel our very own across many a recent missive.  To wit:

  • We’ve said:  “We’re beyond the Investing Age of Stoopid to that of Braindead”;
  • He just said:  “I view the markets as fundamentally broken”.
  • We’ve said:  “Nobody does the math anymore”;
  • He just said:  “They’re going to assume everybody else has done the work.”
  • We’ve said:  “Everybody just parrots what everybody else says”;
  • He just said:  “Passive investors have no opinion about value”.

Nuff said.  Instead, let’s get graphic.  Our best sense says “This” is where we are now with respect to the S&P 500; (for you WestPalmBeachers down there, the red line isn’t the actual S&P, but the overall shape to the top is scarily spot on):

“Uh, mmb, we just got a note from West Palm Beach requesting the actual S&P graph……

Well, why not, Squire?  The similarity is striking.  And as you regular readers recall, the red regression channel suggests the bounds for the S&P today had COVID and the subsequent monetary accommodation never happened:

To even logarithmically chart the above track of the S&P still finds present price overwhelmingly out-of-bounds, (polite understatement).

“Oh, but it’s all about the Fed lowering rates!” they say.  “Oh, but it’s all about the booming Biden economy!” they say.  “Oh, but it’s all about AI!” they say.  

We say:  the Federal Reserve has yet to tip its hand, the media are in high gear to either get the President re-elected or go with Michelle Obama, and as for Artificial Intelligence — based upon what flushes through the sewer lines of Internet — we view it more as Assembled Inaccuracy; (more on that in the wrap).

So with respect to the S&P 500 and its “live” price/earnings ratio of now 49.0x, if you’re having an Elaine Garzarelli moment, ’tis absolutely justified.  (For shame, if you have to look her up).  And the inevitable fear commensurate with the S&P’s next “correction” shall be a one-two punch:

  1. Fear of losing one’s marked-to-market millionaire status, (markets plummet); and
  2. Fear of one’s account being credited with broker IOUs, (markets shutdown).

Moving on to Gold, we find for all intents and purposes ’tis not moving; rather, ’tis yet again sleeping.  In settling yesterday (Friday) at 2039, ’twas Gold’s narrowest weekly range by points (31) since that ending two years ago on 04 February 2022; (by percentage between the high and low, ’twas the least rangy since that ending 23 December 2021).  As we’ve so stated of late, these days ’tis nothing but the Casino 500:  alternative smart investments no longer matter.

As for the chart of Gold’s weekly bars from one year ago-to-date, we see the blue-dotted parabolic Long trend still just barely there:  should 2027 trade in the new week, Gold goes bear.  That’s just 12 points of wiggle room within Gold’s expected weekly trading range of now 59 points.  Thus come Monday, Gold either gets off the schneid to the upside, else the trend flips to Short and the green-bounded structural support zone resumes being tested:

On to the ever-exciting Biden economy.  Breathtaking, non?  Have look below at the Econ Baro’s purple-highlighted uptrend streaks!  Well, maybe not … for by typical duration, this last may have run out of gas.  We’ll have a better idea in the ensuing week with 17 metrics due for the Economic Barometer, including on Tuesday retail inflation for January, the “consensus” reading for the Core CPI expected to come in at an annualized +3.6% pace.  Remember this from our opening missive in 2024?  “…might renewed inflation be taking first prize?  In other words:  what if the Fed instead tightens … surprise!”  From this side of the Pond, the European Central Bank just voiced concern over disinflation not dissipating as deftly as desired, whereas farther ’round the globe the People’s Bank of China is staring at died-in-the-wool deflation.

Adding to all that confusion came our favourite headline of the week (last Monday), courtesy of Bloomy:  “Treasuries Fall on Powell” … Ouch!  That had to have bruised, but we trust he’s ok.  Either way, here’s the Baro for now along with the goofball (technical expression) Casino 500:

In gliding toward this week’s wrap let’s briefly review sleepy Gold per the two panel graphic of daily bars from three months ago-to-date on the left and 10-day Market Profile on the right.  Gold’s “Baby Blues” of trend consistency look to be running out of upside puff, whilst per the Profile, 2052 is now the trading-volume price line in the sand:

Silver’s snapshot of same appears a bit weaker, her “Baby Blues” (at left) struggling for direction, with Profile trading support and resistance as labeled (at right):

And so to wrap with a little AI (again that’s Assembled Inaccuracy”) fun in three parts.

First and obviously not proper use of AI per se, we simply “Googled” the following question:  What is the trading profit for the past 10 swings of the S&P 500 emini futures by parabolics on three-point range candles?”  The reply was merely a slew of adverts for commodity trading firms.

Second we went to a proper AI site and identically queried:  What is the trading profit for the past 10 swings of the S&P 500 emini futures by parabolics on three-point range candles?”  The amount of verbage returned was practically endless, but finally came the reply:  Therefore, the trading profit for the past 10 swings of the S&P 500 Emini futures by parabolics on three-point range candles is $3175.”  Which is comprehensively wrong.  The correct answer is $938.

Third we thus thought:  let’s try something a little easier.  Ready? In we typed “What is the price of gold?” The reply?  As of today, the price of gold is $1,775.45 per troy ounce.”  Which again is comprehensively wrong.  The correct answer is $2024.40 (spot) or $2038.70 (futures).  Oh my, AI.

And AI is purportedly bringing us to Dow 100,000?  Talk about “This” being is where it all goes wrong!  

We therefore think for now:  “Forget about it!”

Rather:  Just get some GoldThat’s Actual Intelligence!

“Smart boy…”

Cheers!

 …m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”:  @deMeadvillePro

09 February 2024 – 09:25 Central Euro Time

All eight BEGOS Markets are at present within their respective Neutral Zones for today; session volatility is very light. The S&P 500 briefly topped the 5000-mark yesterday (at precisely 5000.40) before settling at 4998. Four in ten S&P stocks have thus far not improved their Q4 earnings over those of a year ago. Infamous Dave Einhorn just referred to the markets as “fundamentally broken”; (obviously he reads The Gold Update … more on that in tomorrow’s 743rd edition). Our top Market Rhythms for consistency on a 10-test swing basis are currently the Bond’s daily Parabolics, both the Swiss Franc’s 8hr Moneyflow and daily Parabolics, and the Spoo’s 2hr Price Oscillator. The Econ Baro already has concluded its muted week.

08 February 2024 – 09:16 Central Euro Time

The Spoo is now above 5000 for the first time in its history, (the S&P itself near the threshold). At present we’ve both Silver and Copper above their Neutral Zones for today; the rest of the BEGOS Markets are within same, and volatility is light. Per our S&P Moneyflow page, dough is flowing into the Index at an unbelievable rate given the more-than-extreme overvaluation: the “live” P/E (fut’s adj’d) is now 50.2x. Today’s Econ Baro metrics include December’s Wholesale Inventories.

07 February 2024 – 09:39 Central Euro Time

At present, Gold and Silver are the only BEGOS Market outside (below) today’s Neutral Zone; session volatility again is notably light. Of late we’ve a strong positive correlation between the Bond and Gold: indeed the tracks of their daily bars across the past 21 trading days (one month) are (to the glance) identical. We continue to monitor Gold’s weekly technicals, the Moneyflow for which is inching lower still; again a retest of the 2020-1936 can be in the cards, certainly upon the weekly parabolic Long trend flipping to Short, (the hurdle for which is currently 2015 versus price right now of 2048). The Econ Baro looks to December’s Trade Deficit and (late in the session) Consumer Credit.

06 February 2024 – 09:14 Central Euro Time

The Spoo is the sole BEGOS Market at present outside (above) its Neutral Zone for today; session volatility is notably light, even as nothing is on the schedule for the Econ Baro. Our top three Market Rhythms (on a 10-test swing basis) for consistency are Gold’s 1hr Moneyflow, the Swiss Franc’s 8hr Moneyflow, and the Spoo’s 2hr Price Oscillator. Going ’round the Market Values horn for the five primary components, in real-time we’ve the Bond as -2^22 points “low” vis-à-vis its smooth valuation line, the Euro as -0.022 points “low’, Gold as just -10 points “low”, Oil as basically spot-on its valuation line, and the Spoo as +172 points “high”. At Market Trends, those with positive linregs are Gold, Copper, Oil and the Spoo; thus those negative are the Bond, Euro Swiss Franc and Silver. Through yesterday, only 57% of S&P 500 companies’ Q4 earnings are better than a year ago, with many reports still in the balance over these next couple of weeks.

05 February 2024 – 09:20 Central Euro Time

The Bond and Precious Metals are starting the week to the downside; the balance of the BEGOS Markets are within today’s Neutral Zone, and volatility is pushing toward moderate; Gold already has traced 75% of its EDTR (see Market Ranges). The Gold Update accounts for 19 fresh points of premium in the April contract, but remains wary of some near-term price setback; too, mention is made of Dot-Com-like worries by Big Banks, (an issue upon which we’ve repeated these last several months). The “live” (futs-adj’d) P/E of the S&P 500 is 51.0x: 98 earnings reports are scheduled for the Index this week. The Econ Baro begins a very light data week with January’s ISM(Svc) Index.

The Gold Update: No. 742 – (03 February 2024) – “Gold Gains Ground on Premium Sound”

The Gold Update by Mark Mead Baillie — 742nd Edition — Monte-Carlo — 03 February 2024 (published each Saturday) — www.deMeadville.com

Gold Gains Ground on Premium Sound

When we last left you a week ago, (albeit given the website’s daily updating we never really leave), we were eying Gold as languishing on a weekly basis, but on a daily basis ’twas set for some bounce.  And that’s exactly how Gold ventured through this past week as priced by the ounce.  The April Gold contract settled yesterday (Friday) at 2057, a gain for the week of 21 points (+1.0%).  However as February’s contract was phased out, an additional +18 points of premium worked into that for April, the “all-in gain” for charting vis-à-vis the “continuous contract” thus +39 points (1.9%).  Therefore by such construct, Gold was “saved” from having flipped its weekly parabolic Long trend to Short, as the blue dots below strive to survive yet another week in our year ago-to-date peek:

Note above on the rightmost weekly bar a small red “closing nub” (red arrow) which is where — sans premium — price would instead be, (i.e. near spot at 2039), and thus in that sense ’twas a rather muted up week.  In fact, strictly by the weekly bars for both the outgoing February contract and incoming April contract, their individual weekly parabolic trends already have flipped from Long to Short:  thus short-lived may be the still-Long “continuous contract” parabolic trend.

Too, the weekly negative technicals herein detailed in our prior missive have only stalled rather than improved with the bounce.  Further per the Federal Open Market Committee’s “less dovish than FinMedia-desired” Policy Statement this past Wednesday, Gold’s road can remain a bit rocky as these next weeks unfold, perhaps with further testing of the 2020-1936 support structure in the balance.

And that segues nicely, it being month-end (plus two trading days), to our young year-to-date BEGOS Markets standings wherein we find the Bond -2.0% as yields are on the move up and the Dollar gets the bid.  Yet incredibly and contrary to “conventional wisdom”, the S&P 500 is topping the table already +4.0%, even in the midst of a lousy Q4 Earnings Season:

 

“You say ‘lousy’, mmb?  75% of S&P companies have beaten estimates…

Squire revels in playing this earnings game.  Truth be told, only 56% of bottom lines have improved over a year ago, thus far making Q4 the sixth-worst S&P 500 Earnings Season of the past 27.  Rising yields, a rising Dollar, scant earnings growth, and this Casino 500 sits at an all-time closing high (4959)?  Ought we re-classify The Investing Age of Stoopid to that of Braindead?

But wait, there’s more:  within several missives dating as far back as last mid-November, we’ve likened what we’ve been seeing in the Casino 500 to that which ultimately fed into the DotComBomb some two decades ago.  And — late as they may be in figuring this out — major investment banks are (finally) seeing same.  Hat-tip Bloomy for reporting last Tuesday that “JP Morgan Quants Warn of Dot-Com Style Concentration in US Stocks”, and then followed that yesterday with “BofA’s Hartnett Says Stock Markets Are Behaving Like Dot-Com Era”.  Are the Big Banks at last actually doing the math?

The “live” price/earnings ratio of the Casino 500 is now 50.5x … and as we’ve previously noted, that is higher than ’twas at the outset of the DotComBomb, which high-to-low from 2000 into 2002 found the S&P “correct” more than -50% … just in case you’re scoring — or better yet preparing — at home.  Because in reprising Bachman–Turner Overdrive from back in ’74: You Ain’t Seen Nothing Yet 

‘Course, the “talk of the town” remains the so-called “Magnificent Seven”.  Per yesterday’s settle, the combined market capitalization of:  both Alphabet tranches, Apple, Amazon, Meta, Microsoft, Nvidia and Tesla represents 29.2% of the entire S&P 500.  Their average P/E is now 46.5x (44.8x cap-weighted, were they in their own index of just seven companies).  This is beyond lunacy by any historical measure.

Moreover as we’ve all along been wary, the annualized risk-free yield per yesterday’s settle on the three-month U.S. T-bill is 5.210%; that on the risk-all Casino 500 is 1.431%.  (Further, as you regular readers well know, the market cap of the S&P is more than twice the readily available money supply to cover it … oops).  

But back to Gold — the true hard asset currency dating at least as far back as Lydia’s King Croesus, circa 550 BC — ’tis time to bring up our year-over-year comparison of the yellow metal vis-à-vis its key equity brethren.  So from worst to first we’ve:  Newmont (NEM) -37%, Franco-Nevada (FNV) -28%, Pan American Silver (PAAS) -27%, the Global X Silver Miners exchange-traded fund (SIL) -17%, Agnico Eagle Mines (AEM) -15%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) -14%, but Gold itself +5%.  Does this mean the price of Gold (2057) is too high?  Hardly, given our opening Gold Scoreboard’s valuation (3754).  But in this goofball era of “The Magnificent Seven, or Nothing!”, the precious metals remain the wallflowers.  It shan’t last; (it never has).  Here’s the graphic:

Next we can see the stance of the precious metals within the overall view of the BEGOS Markets in going ’round-the-horn for all eight components across the past 21 trading days (one month)-to-date.  Therein is Gold with its mild uptrend, whilst Silver is sporting a mild downtrend.  But that’s enough to now place the Gold/Silver ratio at 90.3x, its highest end-of-week reading since that ending 10 March of last year.  We’ve said it before and we’ll say it again:  Sister Silver is CHEAP!  Here’s the whole gang, accompanied by each trend’s consistency per the baby blue dots:

Meanwhile, the once-pumped now rather defunct CNN is all excited:  “Another shockingly good jobs report shows America’s economy is booming.”  Really?  Oh to be sure, the Department of Labor Statistics rounded up a net increase in January Payrolls of 353,000, the most since the same month a year (then 504,000).  ‘Course two days prior to Labor, ADP came in with a net increase for private sector Employment of only 107,000 for January, the fourth-worst monthly reading since still COVID-ridden December 2021.  Too, period-over-period metrics were less in January for both the Average Workweek and the Chicago Purchasing Managers’ Index, as well as for December’s Factory Orders and Q4’s Productivity.  So is the economy truly “booming”?  Of course ’tisn’t, albeit the Economic Barometer has been erratically ratcheting upward these last two months:

Erratic of late, too, is the trade of Gold and Silver.  As we turn to their respective 10-day Market Profiles with Gold on the left and Silver on the right, both are priced ’round their mid-points, trading supporters and resistors as labeled:

‘Course, we can’t let month-end pass without reviewing Gold’s Structure across the monthly bars for the past dozen years, (the rightmost candle encompassing just the first two trading days of February).  So close is Gold to upside uncharted territory … and yet so far:

The ensuing week appears underwhelming for the Econ Baro:  just five metrics are due.  But for Q4 Earnings Season, another 98 reports are scheduled for the S&P 500 as the Index’s insanity continues … or starts to come to its senses.  On verra…

‘Course, nothing is more sensible than having a little Gold!

Cheers!

 …m…

www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”:  @deMeadvillePro

02 February 2024 – 09:20 Central Euro Time

Quick website note: our Market Profiles page is not accurately updating; our goal is to have the issue resolved in a week’s time. <– Resolved. To the BEGOS Markets we go and at present Copper is the sole component outside (below) its Neutral Zone; session volatility is light, save for Copper having already traced 82% of its EDTR (see Market Ranges). Yesterday’s equities’ upside whirl-’round now finds the Spoo (in real-time) +158 points above its smooth valuation line (see Market Values); the S&P 500 itself is now 10 consecutive trading days “textbook overbought”. The Econ Baro awaits January’s Payrolls and revised UofM Sentiment Survey, plus December’s Factory Orders.

01 February 2024 – 09:48 Central Euro Time

The Bond, EuroCurrencies, Silver and Copper all are below today’s Neutral Zones; above same is the Spoo, and BEGOS Markets volatility is moderate. The data provider’s EPS issue appears to have been resolved such that the S&P Valuation and Rankings page shall resume updating tonight. Yesterday’s -1.6% drop in the S&P 500 was its worst since 21 September. Credit the FinMedia for having really fueled belief for a more dovish FOMC presentation. Despite the S&P’s decline, the Spoo (in real-time) is +97 points above its smooth valuation line (see Market Values). ‘Tis a busy day for the Econ Baro including Januarys’ ISM(Mfg), December’s Construction Spending and Q4’s first peek at Productivity and Unit Labor Costs.

31 January 2024 – 09:17 Central Euro Time

Ahead of the Fed, both the Euro and Swiss Franc are at present below today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is light-to-moderate, the Euro notably having already traced 65% of its EDTR (see Market Ranges). As we saw on Monday with both the Bond and Gold, the Swiss Franc’s “Baby Blues” (see Market Trends) have moved above their -80% axis; as our regular readers know, this is indicative of higher prices ahead, albeit for the yellow metal, the negative weekly measures discussed in The Gold Update have us cautious. In addition to the FOMC’s Policy Statement, we’ve for the Econ Baro today December’s ADP Employment data and the Chi PMI, plus Q4’s Employment Cost Index.