Presently, all eight BEGOS Markets are within their respective Neutral Zones for today, and volatility to this point of the session is light-to-moderate. The Metals Triumvirate is thus far getting the most play, the EDTR (see Market Ranges) tracings being 68% for Silver, 71% for Copper and 77% for Gold. As anticipated, both the Euro and Swiss Franc have moved higher since their “Baby Blues” (see Market Trends) climbed above their -80% axes coming out of last week. And going ’round the Market Values horn for the five primary BEGOS components we’ve (in real-time) the Bond as better than +3 points “high” above its smooth valuation line, the Euro -0.012 points “low”, Gold -20 points “low”, Oil -1.43 points “low” and the Spoo +229 points high. The S&P 500 has been at an “extreme” level of being “textbook overbought” now for seven consecutive trading days, a condition not seen since early November 2021, following which the Index “corrected” by better than -22% over the ensuing eight months. The Econ Baro concludes its week with December’s UofM Sentiment Survey, November’s Payrolls and late in the session October’s Consumer Credit.
Mark
05 December 2024 – 08:27 Central Euro Time
The Euro is the sole BEGOS Market outside (above) its Neutral Zone for today; session volatility is very light. Gold’s 12hr Parabolics flipped to Long effective today’s open: of the 405 Market Rhythms run each evening, this one ranks in the top ten and has produced a minimum of 17 points of follow-through (either Long or Short) in nine of the past 10 signals; of course, the more dominant weekly Parabolic trend remains Short; too, (inclusive of real-time), Gold’s 21-day linear regression trend is neutral, its “Baby Blues” (see Market Trends) smack on their 0% axis, but themselves rising. For the S&P 500, its “live” (futs-adj’d) P/E is now 46.6x, the Index now overbought through 35 of the past 39 trading days, and at our “extreme” level through the past six. Today’s incoming metrics for the Econ Baro include November’s Trade Deficit.
04 December 2024 – 08:36 Central Euro Time
At present, all eight BEGOS Markets are within their respective Neutral Zones for today, and session volatility is light. In looking at Market Ranges, notably narrowing of late include those for the Bond, Silver, Copper, Oil, and to some extent the Spoo. As to Market Rhythms’ pure swing consistency, on a 10-test basis the current leaders are Oil’s 15mn Moneyflow, Silver’s 1hr MACD and 8hr Price Oscillator, plus the non-BEGOS Yen’s daily Parabolics; on a 24-test basis the current best are Gold’s 2hr MACD, and as has been mentioned in multiple commentaries, the non-BEGOS Yen’s daily Price Oscillator. The Econ Baro looks to November’s ADP Employment data, ISM(Svc) Index and October’s Factory Orders. Then late in the session comes the Fed’s Tan Tome.
03 December 2024 – 08:42 Central Euro Time
At present below today’s Neutral Zones are the Bond and Swiss Franc; above same are Silver and Copper, and session volatility is light-to-moderate. The non-BEGOS Yen’s daily Price Oscillator — which has be dominating the top of our Market Rhythms runs on a 24-test basis for pure swing consistency — confirmed flipping from Short to Long at today’s open: currently 0.0066815, ‘twould be well within historical performance range to see an ascent up to at least .0068940 into year-end; (the average full swing duration of this Rhythm over the past three years is some seven trading weeks). Also for currencies, just as yesterday we cited the Swiss Franc’s having (by Market Trends) its “Baby Blues” cross above the key -80% axis, so too now has that measure for the Euro; the Dollar’s weakening over the past two weeks looks to further strengthen these attendant currencies. ‘Tis a quiet day for the Econ Baro which yesterday benefitted by both the ISM(Mfg) Index and Construction Spending.
02 December 2024 – 08:32 Central Euro Time
Save for Oil, ’tis a red start to December for the seven other BEGOS Markets, each one (except for the mildly negative Spoo) at present below their respective Neutral Zones for today; volatility is firmly moderate, likely pushing toward robust as the day unfolds. The S&P 500’s “textbook overbought” stance is at our “extreme” reading: indeed ’tis been overbought for 17 consecutive trading days and in total for 32 of the last 36; the “live” (futs-adj’d) P/E is presently a whopping 45.5x and the yield 1.228%; that annualized for the risk-free 3-month T-Bill is 4.373%. On Friday, the Swiss Franc’s “Baby Blues” (see Market Trends) confirmed crossing above the key -80% axis, indicative of still higher prices: currently 1.1327, a near-term push to at least 1.1442 wouldn’t be untoward. The Econ Baro begins December with November’s ISM(Mfg) Index and October’s Construction Spending.
The Gold Update: No. 785 – (30 November 2024) – “Gold in 60 Seconds (IV)”
The Gold Update by Mark Mead Baillie — 785th Edition — Cortona, Arezzo, Toscana — 30 November 2024 (published each Saturday) — www.deMeadville.com
“Gold in 60 Seconds (IV)“
Saluti dalla Toscana! As indicated a week ago, our missive this time ’round is a brief read, but to the point; (our usual month-end graphics content shall instead be to-date in a week’s time).
Gold settled the abbreviated trading week yesterday (Friday) at 2674, -128 points below its All-Time High of 2802 (30 October). But price’s points volatility is well above normal: the average high-low weekly trading range across these past four is 132 points, such like average not seen since that ending 09 April 2020 as COVID unsettled the investing world.
Regardless of Gold’s recent careening about, the current weekly parabolic Short trend just completed its third week. And should price in this ensuing week not eclipse up through 2791 (i.e. +117 points above present price), such Short trend shall have completed a fourth consecutive week for the first time since that ending 25 August 2023. Here are Gold’s weekly bars and parabolic trends from a year ago-to-date:
Also as anticipated in our prior missive, the Core Personal Consumption Expenditures Price Index would be this past week’s key metric. Such “Fed-favoured” inflation gauge registered for October at +0.3%, which annualized of course is +3.6%, thus exceeding the Federal Reserve’s preference for a +2.0% pace. And per our table for October’s inflation measures, the Core PCE’s actual 12-month summation of +2.8% too remains Fed-excessive, as does every cell in the graphic, save for the headline Producer Price Index:
Generally, Gold responds positively to Fed benevolence. And come the Open Market Committee’s next Policy Statement on 18 December, whilst ’tis not set in stone for a FedFunds rate cut, the conventional wisdom “assumption” shall look to another -25bp reduction. For after all, Fed policy tends — indeed is “expected” — to trend. And a Fed cut ought redound well for Gold, perhaps reversing the weekly parabolic trend from Short back to Long and further to a new All-Time High just in time for Christmas.
Further, the Economic Barometer remains rather steady through recent months. Were it instead to be rising, it might give pause for the Fed to — well — pause. Moreover, 33 metrics still are due for the Baro prior to the next Fed meeting in two-and-a-half weeks’ time. Alors, on verra. Here’s the Baro:
Thus in brief this week for Gold, our bottom line is to remain wary of price — at least technically — sporting some degree of confusion given the aforenoted volatility. To be sure, the weekly parabolic trend is Short, and by Gold’s page at the website, the 21-day linear regression trend is negative; however both Gold’s “BEGOS Market Value” and Market Magnet appear at present non-committal as to near-term direction. Yet to better one’s analytical perspective, by our Market Rhythms page, there are presently 11 for Gold which qualify to make that list, (as updated daily).
‘Course — fundamentally — priced today at 2674 versus the opening Scoreboard’s debasement valuation of 3778 reminds us that broadly: Gold is still ever so cheap!
Ciao!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
29 November 2024 – 08:48 Central Euro Time
The two-day abbreviated session for the BEGOS Markets continues with just the Swiss Franc at present outside (below) its Neutral Zone; volatility for the combined session is moderate. Of note from our Market Magnets page, those for both the Euro and Swiss Franc have been price penetrated to the upside, whilst for Gold to the downside: such penetrations are indicative of continued near-term direction. The Spoo suggests a higher open for the S&P 500, its “textbook overbought” streak to be further extended. Early BEGOS Market’s closures are as follows (all GMT): the Bond 18:15, EuroCurrencies 19:45, Metals Triumvirate 19:45, Oil 19:45, and the Spoo 19:15. As stated in the still current edition of The Gold Update, tomorrow’s edition shall be quite brief given our writing remotely this time ’round.
28 November 2024 – 08:26 Central Euro Time
Whilst StateSide ’tis the Thanksgiving holiday, the BEGOS Markets are active for two abbreviated sessions combined into Friday settlement. And at present below their Neutral Zones are the Euro, Swiss Franc and Silver; the balance of the components are within same, and volatility is light. Going ’round the Market Values horn of the five primary BEGOS elements, we’ve (in real-time) the Bond as some +1.2 points “high” above its smooth valuation line, the Euro -0.018 points “low”, Gold as -51 points “low, Oil as -1.24 points “low” and the Spoo as 206 points “high”. Yesterday, the S&P 500 completed its 16th consecutive trading days as “textbook overbought”, indeed its 31st of the past 35. Today’s GLOBEX trading halts commence from 18:00 GMT for the Spoo through the usual 22:00 GMT for the currencies.
27 November 2024 – 08:02 Central Euro Time
Save for the mildly lower Euro, Oil and Spoo, the balance of the BEGOS Markets are higher; notably above their Neutral Zones at present are the Swiss Franc and Metals Triumvirate; session volatility is light ahead of a large load of incoming EconData. Our top two current Market rhythms for pure swing consistency are (on a 10-test basis) Copper’s 15mn Parabolics and Silver’s 8hr Price Oscillator; too (on a 24-test basis) remains the non-BEGOS Yen’s daily Price Oscillator, plus Gold’s 30mn Price Oscillator. StateSide, ’tis the final full trading day of the week. And for the Econ Baro, incoming metrics today include October’s Personal Income/Spending, “Fed-favoured” Core PCE Prices Index, Durables Orders and Pending Home Sales, plus the second peek at Q3 GDP.
26 November 2024 – 08:30 Central Euro Time
Presently, all eight BEGOS Markets are in the red and all (save for the Bond) below today’s Neutral Zones; volatility is mostly moderate. The S&P 500 continues its “textbook overbought” stance: however, yesterday’s MoneyFlow belied the Index’s up day of +0.3%, citing it ought instead have been -2.0%; the MoneyFlow of the S&P is a leading indicator (see The S&P 500, MoneyFlow); the three most negative cap-weighted outflows came from NVDA, TSLA and NFLX; indeed, the outflow from NVDA was sufficient for it to lose top spot in the largest cap-weighted constituents (see too Valuations & Rankings). The best directional correlation amongst the five primary BEGOS Markets currently is positive between Gold and Oil. The Econ Baro awaits November’s Consumer Confidence and October’s New Home Sales. Also late in the session we’ve the FOMC Minutes from the 06-07 November meeting.
25 November 2024 – 08:32 Central Euro Time
All eight BEGOS Markets are at present outside of their respective Neutral Zones for today: above are the Bond, Euro, Swiss Franc, Copper and Spoo; below are Gold, Silver and Oil; session volatility is moderate-to-robust. Gold has already given back as much as 38% of last week’s +151 points gain: The Gold Update highlights Gold’s stellar week as nonetheless a contra-trend rally within the fresh weekly parabolic Short trend; key to assess this week shall be Wednesday’s PCE data for October; too, Gold is whipsawing ’round its smooth valuation line (see Market Values), today having crossed back below it. Well up thus far today is the Bond: we’d of late written our anticipation of a such a move, notably as the Bond’s “Baby Blues” (see Market Trends) have twice crossed above their -80% axis since 11 November. And Q3 Earnings Season concluded on Friday, the sub-par performance seeing 64% of S&P 500 constituents bettering their bottom lines over Q3 a year ago: the average such improvement since 2017 is 66%, and ex-COVID, 68%. The “live” (futs adj’d) P/E of the S&P is presently 44.9x.
The Gold Update: No. 784 – (23 November 2024) – “Gold’s Contra-Trend Rally; S&P’s Earnings(less) Tally”
The Gold Update by Mark Mead Baillie — 784th Edition — Monte-Carlo — 23 November 2024 (published each Saturday) — www.deMeadville.com
“Gold’s Contra-Trend Rally; S&P’s Earnings(less) Tally“
Let’s begin with Gold, courtesy of the “We Love It When We’re Wrong Dept.” given price having just recorded its best week (by net points gained) in nearly 45 years!
For following last week’s piece (“ ‘Tis No Surprise, Gold’s Current Demise “) replete with our “…suggesting Gold revisiting the upper 2400s on this run…”, Gold instead posted five consecutive up days toward settling yesterday (Friday) at 2718. Not only was it a beautiful “thAng”, but it also lends credence to our time-honoured quip that “Shorting Gold is a bad idea”.
Still — speaking of Short — the week’s five-day rally was not sufficient to flip the fresh parabolic Short trend on Gold’s weekly bars back to Long per this next graphic. Indeed to so do in the ensuing week, price would need eclipse the 2797 level as below shown. ‘Course as we’ve stated of late, Gold’s prior three weekly parabolic Short trends lasted but three weeks apiece. And as fresh as is the new Short trend, nonetheless, ‘twas a terrific week for the yellow metal. Price’s net gain on a percentage basis of +5.9% was the best since that ending 17 March 2023 — and by the net gain of +151 points — ’twas Gold’s best week since the “Wonder Week” ending 18 January 1980 upon price gaining +195 points from 628 to 823 (+31%). A lot of today’s financial “pros” weren’t around then (and it shows) … yet we were, (as too, for you Silver buffs, were Nellie, Willy and Lamar Hunt … but we digress). Here’s the year-over-year graphic:
How wonderful to have been wrong, indeed! And yet — until the weekly parabolic trend whirls back up to Long — we’ve entitled this past week’s fabulous rise as a “contra-trend rally”, (which for you WestPalmBeachers down there means Gold is rising within a broader down trend). To wit, this next two-panel graphic is gleaned from what we refer to as our best Market Rhythms. On the left is Gold by the day since 22 October: notice the MACD (moving average convergence divergence) has just crossed to positive. On the right, however, is Gold by the week since 06 June: therein (as we first presented last week) the MACD had just crossed to (and remains) negative.
“So which one is up, mmb?”
Well, Squire, ultimately both! But for the present, the ensuing week brings the Federal Reserve’s so-called favourite gauge of inflation: Core Personal Consumption Expenditures Prices for October. And the consensus there is it continues to run “hot” at an annualized pace of +3.6% which obviously surpasses the Fed’s ongoing target for +2.0%.
Too, there’s nearly four weeks to go before the Open Market Committee’s next Policy Statement (18 December), prior to which we’ll get the U.S. Bureau of Labor Statistics’ read on November inflation at both the retail and wholesale levels. And should those metrics not be benign, does the Fed, rather than again cut its Funds Rate, leave a lump of coal in our Christmas stocking? That would likely be a Gold negative.
Still, from the contra-trend conflict comes the website’s updated Market Value chart for Gold from a year ago-to-date. When last herein viewed a week ago, price had negatively crossed beneath its smooth valuation line (borne of price movement relative to the five primary BEGOS Markets, i.e. the Bond Euro / Gold / Oil / S&P 500), the “rule of thumb” there to expect further price decline. But from the “Hold Your Horses! Dept.”, price this past week reversed course upward to positively cross back above the smooth valuation line. Nothing like seeing broadly undervalued Gold getting the bid! Here’s the graphic:
“But why the sudden turnaround, mmb?”
Squire, for all the usual “conventional wisdom” reasons, depending upon one’s media source. “Oh there’s geo-political tension favoring safe-haven Gold!” “Oh Bitcoin is pulling Gold higher ’cause Trump’s gonna pair ’em!” “Oh Goldman Sachs says Gold $3,000!” We’ll stick with the foundational truth: currency debasement, even as nothing moves in a straight line. To be sure, 1,132,033 December Gold contracts were purchased last week … meaning 1,132,033 were sold.
Meanwhile, speaking of Bitcoin, its December futures contract hit an all-time high yesterday of $101,100. Come 27 December is the contract’s expiry, which unlike Gold is settled financially rather than physically, (just in case you’re scoring at home and think you have to make delivery of Bitcoin). “Hey Mabel! I thought you said you stacked it up in the closet!”
Not scoring as well at present is the Economic Barometer. This past week brought but eight metrics into the Baro, only three of which improved period-over-period. Notable amongst the retreaters was the lagging indicator of the Conference Board’s Leading Indicators for October. The negative reading was, of course, warmly greeted by the S&P, which then spent the balance of Thursday and Friday moving higher, “because the Fed has to cut, ya know.” Yeah, we know. “Got Gold?” Here (featuring some old “friends”) is the Econ Baro along with the S&P 500 from one year ago-to-date:
And of course as has been our wont seemingly forever, the “live” price/earnings ratio of the S&P 500 remains hideously high, now 44.6x. It stays in such silly territory because as the S&P trades higher, earnings don’t keep pace.
Indeed, Q3 Earnings Season just concluded. Of the S&P’s 503 entities, 447 reported within the seven-week stint. 64% of the bottom lines bettered themselves over Q3 of a year ago … which means 36% did not … which makes us wonder why they’re even in the world’s wealthiest index … which brings us to the following graphic.
It covers the last 30 quarterly Earnings Season for the S&P. The violet line is the percentage of companies beating the broker’s marketing tool known as “estimates“. The green line is the percentage of companies that actually made more money, (an aspect seemingly taboo for the broker to reveal). And as for the dashed green line, ’tis the evolving average of percentage improvement from the prior year’s like quarter. That average today is 66%. Exclude COVID year 2020 and the average is 68% … which is why we’ve been regularly characterizing this past Earnings Season as “sub-par” … which is why the high P/E refuses to die … which is why our title includes “The S&P’s Earnings(less) Tally”, indeed. Take heed:
Take heed, too, over Gold’s contra-trend rally. ‘Twould be statistically off the end of the Bell Curve for Gold to record a further consecutive weekly parabolic Short trend of just three weeks duration. That noted, one cannot argue with the following two-panel display featuring Gold’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right. Gold’s “Baby Blues” of linear regression trend consistency now curling upward without having quite reached down to their -80% axis is quite the bullish suggestion. And per the Profile — atop which Gold sits — there are plenty of high-volume support prices as labeled:
Hardly as firm as that for Gold is the like picture for Silver. Save for last Monday, her trading week at best was rather namby-pamby, albeit her “Baby Blues” (at left) piercing up through the -80% axis typically is a “buy” signal. And per her Profile (at right) there is labeled volume support from 31.25 down to 30.75. Further — as we relentlessly remind — Silver remains ever so cheap relative to Gold: the century-to-date average Gold/Silver ratio is now 68.6x, whereas the actual ratio settled the week at 86.6x. Thus with Gold at 2718, Silver by the ratio’s average “ought be” +26% higher at 39.64 rather than her actual present price of 31.41. Again: do not forget Sister Silver!
So into the StateSide Thanksgiving week we go: 11 metrics come due for the Econ Baro, including 10 packed into Monday through Wednesday, the PCE data surely to get the lion’s share of interest.
Moreover: we’ve this heads-up for next Saturday’s edition of The Gold Update. We shall be once again “in motion”, this time through the treasured beauty of Tuscany. Thus akin to the occasional “Gold in 60 Seconds”, next week’s piece shall be quite brief. True, ’tis is a month-end edition, normally graphics-rich. However, we’ll like save most of those for the ensuing 07 December missive. Either way, Gold’s reaction to next Wednesday’s PCE shall be key.
As we thus prepare to embark for Golden Tuscany, ensure your tally totals a Golden Destiny!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
22 November 2024 – 08:32 Central Euro Time
Both Gold and Silver are at present above today’s Neutral Zones, whilst below same is Copper; the balance of the BEGOS Markets are calm, and session volatility remains light to this point. Gold has had a firm contra-trend rally this week even as the weekly parabolic trend just flipped from Long-to-Short a week ago: more of course in tomorrow’s 784th consecutive Saturday edition of The Gold Update. At Market Trends, the sole BEGOS component with a positive linreg is the Spoo. The S&P’s “textbook overbought” streak continues, the sub-par Q3 Earnings Season (which concludes today) in turn maintaining a stratospherically high “live” P/E of 45.4x (futs-adj’d for real-time). Bitcoin appears poised to tap 100,000 today, (high 99,820). And the Econ Baro concludes its quiet week with the monthly revision to November’s UofM Sentiment Survey.
21 November 2024 – 08:38 Central Euro Time
Both Gold and Silver are at present above their respective Neutral Zones for today, whilst below same is the Spoo; volatility is again light. Looking at Market Values in real-time for the five primary BEGOS Markets, we’ve the Bond as -1.50 points “low” vis-à-vis its smooth valuation line, the Euro -0.024 points “low”, Gold -16 points “low”, Oil -0.99 points “low” and the Spoo +131 points “high”. The S&P 500 is now 11 consecutive trading days “textbook overbought” and further is 26 days as such across the past 30. The “Baby Blues” (see Market Trends) for the Precious Metals are starting to curl upward, albeit their linregs remain well negative. And for the Econ Baro, incoming metrics include November’s Philly Fed Index, plus October’s Existing Home Sales and Leading (i.e. “Lagging”) Indicators.
20 November 2024 – 08:38 Central Euro Time
Save for Oil and the Spoo, the other six BEGOS Markets are lower, notably with the Bond, Euro, Swiss Franc, Gold and Silver at present below today’s Neutral Zones; the Spoo is above same, and volatility is light. The Bond’s “Baby Blues” (see Market Trends) have — for the second time in as many weeks — moved above their key -80% axis: thus we look to still higher Bond prices near-term following Friday’s low of 115^09 (present price is 116^12). In looking at Market Rhythms, on a 10-test basis our current leaders for pure swing consistency are Oil’s 8hr Moneyflow, Silver’s 8hr Price Oscillator and the Spoo’s 1hr Moneyflow; the lone leader on a 24-test basis continues to the non-BEGOS Yen’s daily Price Oscillator. Nothing is due today for the Econ Baro. And with the “live” futs-adj’d P/E of the S&P now 45.2x, we’ve three days left to run in this sub-par Q3 Earnings Season.
19 November 2024 – 08:21 Central Euro Time
The Euro is at present below its Neutral Zone for today, whilst above same is Gold; ’tis a bit ironic given our best current correlation amongst the five primary BEGOS Markets is positive between the Euro and Gold, albeit market dynamics continually shift; session volatility is quite light. Gold has moved back above 2600, however our anticipated move lower into the 2400s remains very viable, the weekly parabolic trend being newly Short along with the negative MACD crossover; still, Gold has cleared the 2615 handle which by the Market Profile is the most dominantly-traded price of the past fortnight; mind, too, Gold’s price vis-à-vis its smooth valuation line (see Market Values): in real-time, price is presently -57 points “low”. Meanwhile, the S&P 500 continues its “textbook overbought” streak, the “live” futs-adj’d P/E now 44.8x. The Econ Baro looks to October’s Housing Starts/Permits.
18 November 2024 – 08:01 Central Euro Time
At present, all eight BEGOS Markets are in the black, with the Metals Triumvirate and Spoo currently above their respective Neutral Zones for today; session volatility is mostly moderate. The Gold Update acknowledges our anticipated pullback in price, with potentially lower levels at least near-term as the weekly MACD confirmed a negative crossing at week’s close such that the upper 2400s would not be untoward. For the Spoo, price on Friday confirmed piercing to the downside its Market Magnet, suggestive of still lower levels; by Market Values (in real-time), the Spoo shows as +140 points “high”; and despite last week’s selling, the S&P 500 itself remains “textbook overbought” through 23 of the past 27 trading days; the futs-adj’d “live” P/E is presently 44.0x. For the Econ Baro ’tis a fairly light week, beginning today with November’s NAHB Housing Index. And Q3 Earnings Season continues into its final week.
The Gold Update: No. 783 – (16 November 2024) – “ ‘Tis No Surprise, Gold’s Current Demise ”
The Gold Update by Mark Mead Baillie — 783rd Edition — Monte-Carlo — 16 November 2024 (published each Saturday) — www.deMeadville.com
“ ‘Tis No Surprise, Gold’s Current Demise ““
For you valued regular readers of The Gold Update, price’s demise across these past three weeks ought be no surprise. Into Halloween week, Gold vis-à-vis its near-term smooth valuation line ran better than +150 points “too high”. Then into the StateSide election, price — as herein penned a week ago — once trumped was then dumped.
Subsequently, Gold fully reverted south to said smooth valuation mean, and upon penetrating it to the downside, the stage was set (as is the rule of thumb) for still lower prices, our “average” anticipation level (as herein written last week) being 2555. And indeed such price was reached this past Thursday en route to the week’s low of 2542, toward settling yesterday (Friday) at 2567. Here’s Gold’s updated Market Values graphic from one year ago-to-date. Therein note per the lower panel oscillator (price less valuation) whereas Gold by this near-term metric was “overvalued” back in April by +200 points, that ’tis now “undervalued” by half that distance at -100 points. The wee “sell” label marks the crossover:
However, with respect to Gold’s weekly parabolic trend, we’d last written: “…there’s a very realistic chance that in a week’s time we’ll herein find such trend having flipped to Short…” which in concert with price’s reversion to the smooth valuation line has also come to pass. Here are the updated weekly bars, the rightmost encircled red dot confirming the commencement of the new parabolic Short trend:
‘Course, the buzz within the graphic reminds us that Gold’s prior three weekly parabolic Short trends (extending as far back as September a year ago) have each been just three weeks in duration. But given current negative technical reads — plus fundamental Federal Reserve musings that continuous rate cuts are not necessarily in stone (especially should inflation be increasing its tone) — the notion of yet another Short trend of short duration may be short-lived.
But wait, there’s more (or contextually stated given price’s descent, “less“). Whilst too few in the trading community at large follow deMeadville’s leading analytics, a technical study very visible to the otherwise “great unwashed” is the mouthful measure “moving average convergence divergence” (MACD), an expression of complexity tossed about over post-work martinis to impress those within ear-shot as “MAC-DEE”: “Well ya know, the big guy and me always buy to the max using MAC-DEE!” Oh gee.
Regardless, MACD is one of the five key “standardized” Market Rhythms (across 405 nightly studies) we run here at deMeadville. And by Gold’s weekly candles, the MACD — along with price’s piercing of the smooth valuation line and parabolic trend flipping to Short — also just confirmed its own negative crossover as we rightmost next see:
So in again teeing off on Squire’s “How low is low?” query from a week ago, the above graphic depicts the amount of adversity one might expect from the present 2567 level, the “average” -75 points suggesting Gold revisiting the upper 2400s on this run. Indeed doing the math across Gold’s price-structuring cluster from 03 May’s low of 2285 to 20 May’s high of 2454, the mid-point is 2370. And as you seasoned techies know, cluster mid-points are oft ripe targets.
“So mmb, you’re saying another 100 points down from here is where Gold is going?'”
As you know, Squire, none of us ever know. We can only put to use that which typically eventuates so as to have some degree of cash management guidance.
“But folks should still wait to buy, eh mmb?”
Our modus operandi (a little Latin lingo for you WestPalmBeachers down there) for buying into dips is to accept the risk (especially with respect to Gold) of getting aboard with an initial tranche, but budgeting to fully expect another buying opportunity further down. In other words, by planning to be initially wrong, one doesn’t miss out when it all goes right. To again reprise the resplendent Richard Russell: “There’s never a bad time to buy Gold.” And priced today at 2567 vis-à-vis the opening Scoreboard’s Dollar debasement level of 3740, obtaining Gold at a -31% discount to its long-term value ought be an attractive entry point for those of you scoring at home.
Speaking of scoring, the Dollar Index just completed its seventh consecutive weekly gain, en route reaching to as high as 106.990, a level not traded since 03 October of a year ago. And as we approach the 15th anniversary of these weekly Saturday missives (since 21 November 2009), we’ve on occasion quipped that provenly “Gold plays no currency favourites”, albeit price typically trends contra-Dollar as has been the recent case.
To be sure, pre-election Gold was being grabbed as a safe-haven bid, in concert too with the Fed to that point having turned somewhat benevolent. But so-called oxymoronic “Dollar strength” has a tendency to erode all eight elements of the BEGOS Markets (Bond, Euro/Swiss, Gold/Silver/Copper, Oil, S&P 500). In fact during these recent days wherein a glance at the screen portrays all eight components in the red, we “know” a priori that the Dollar Index is higher. ‘Tis just the way these markets both interact and react.
Moreover with respect to being in the red, the mighty S&P 500 (aka “Casino 500”) — which though this year’s first 42 weeks (to that ending 19 October) had net gains in two of every three — just recorded its third down week in the last four. (Recall the Wall Street Journal piece pre-DotComBomb about less-experienced investors actually believing the stock market never went down?) Yet, just how overvalued remains the S&P, even having lost -2.7% (high-to-low) in just past five trading days? Technically, the Index through Friday is still “textbook overbought” through 23 of the past 27 trading days. Fundamentally, the “live” price/earnings ratio is a whopping 44.4x. But then again, portfolio theory has long-been passé: either be a lemming, else be left behind.
Which brings us to the Economic Barometer, itself continuing to improve. And per today’s conventional wisdom, as things get better, the S&P gets worse: because rather than earnings-driven, the contemporary market is Fed-driven. And as aforenoted, the Fed is now conditioning the market so as not to expect the FedFunds rate to automatically be cut time and again.
Specific to just this past week, of the Econ Baro’s 14 incoming metrics, only four did not improve period-over-period, albeit those laggards included October slowing in both Retail Sales and Capacity Utilization. But the month’s wholesale inflation (Producer Price Index) popped — which is a Baro positive, “the rising tide of inflation lifting all boats” — whilst rate shrinkage was reduced for both Industrial Production and September’s Business Inventories. Too, November’s NY State Empire Index whirled ’round from -11.9 to +31.2, its largest month-over-month improvement since COVID-laced June in 2020. Thus, up with the economy, down with the S&P:
Further as noted, when the Buck gets the bids, “everything else” goes on the skids, including ‘natch the precious metals. ‘Tis not the happiest of two-panel displays, but here next are the last three months-to-date of daily bars for Gold on the left and for Silver on the right, along with their respective baby blue dots of trend consistency. Cue our lead (pun intended) conductor with 
“Follow the Blues instead of the news, else lose yer shoes…“:
Too, we’ve the precious metals’ 10-day Market Profiles, price in both cases nearly buried at the bottom of each stack for Gold (below left) and Silver (below right). The more dominant overhead volume prices are as labeled:
And so to wrap, let’s go with The Stack:
The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3740
Gold’s All-Time Intra-Day High: 2802 (30 October 2024)
2024’s High: 2802 (30 October 2024)
The Weekly Parabolic Price to flip Long: 2802
Gold’s All-Time Closing High: 2799 (30 October 2024)
10-Session “volume-weighted” average price magnet: 2656
Trading Resistance: notable Profile nodes 2573 / 2620 / 2672 / 2696 / 2474
Gold Currently: 2567, (expected daily trading range [“EDTR”]: 43 points)
10-Session directional range: down to 2542 (from 2759) = -253 points or -7.9%
Trading Support: none notable per the Profile
The 300-Day Moving Average: 2268 and rising
The 2000’s Triple-Top: 2089 (07 Aug ’20); 2079 (08 Mar’22); 2085 (04 May ’23)
2024’s Low: 1996 (14 February)
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 light, ensuing week for incoming Econ Baro metrics, the most attention-getting one to be the Conference Board’s compiled negative reading of October’s Leading Indicators, (which as led by the Baro we instead refer to as “Lagging”). Too, ’tis the final week of Q3 Earnings Season, which as you know (should you follow its page and/or read the Prescient Commentary) is sub-par compared to average quarterly year-over-year improvement. But as we’ve quite a bit quipped, earnings today are irrelevant to equities’ investing: else the S&P 500 would be at but half its current level.
Otherwise, notwithstanding some further near-term demise, Gold remains ever so cheap for the wise … the bottom line thus being:
Got Gold? Don’t be a chicken! Get yourself some real nuggets and win!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
15 November 2024 – 08:26 Central Euro Time
Ahead of a significant load of incoming Econ Baro data, we find the BEGOS Markets fairly mixed, the Euro and Swiss Franc at present above today’s Neutral Zones, whilst below same are Oil and the Spoo; session volatility is mostly moderate. Yesterday the S&P 500 — even being down — posted its 22nd of the past 26 trading days as “textbook overbought”; specific to the Spoo, (for which its all-time high is 6053 per this past Monday), price appears on a downward bent to at least test the prior 17 October high of 5927; the Spoo’s daily MACD seems headed for a negative crossing early into the ensuing week, although by Market Trends, the Spoo’s “Baby Blues” still are in ascent. Again, we’re extending our coverage of Q3 Earnings Season an extra week: thus far for the S&P, 65% of bottom lines have been better over Q3 of a year ago: that is a below-average rate of improvement. Of note, Gold yesterday reached down to the “average” adversity level of 2555 that was mused in last Saturday’s Gold Update; tomorrow brings edition No. 783. And as to the busy Baro, it looks to November’s NY State Empire Index, October’s Retail Sales, Ex/Im Prices and IndProd/CapUtil, plus September’s Business Inventories.
14 November 2024 – 08:16 Central Euro Time
‘Tis red across the board for all eight BEGOS Markets, albeit not at present below today’s Neutral Zones are both the Bond and Oil; volatility is mostly moderate. Our best current correlation amongst the five primary BEGOS components is positive between the Bond and Euro. The S&P 500 yesterday reached our “extreme” level of being “textbook overbought”, meaning price has become excessively high by its BollBands, RSI and Stochastics; and the Spoo in real-time is +228 points above its smooth valuation line (see Market Values); too by Market Trends, the Spoo is the sole market (of all eight) sporting a positive 21-day linear regression trend. The Dollar Index today has reached its firmest level (106.695) since 01 November 2023. And included in today’s incoming metrics for the Econ Baro we’ve October’s wholesale inflation (PPI), expectations there for an increase over the September data by both the headline and core readings.
13 November 2024 – 08:08 Central Euro Time
We’ve at present the Euro, Swiss Franc, Copper and Spoo all below today’s Neutral Zones; none of the other BEGOS Markets are above same, and volatility is light. The buying into the S&P 500 of late has been substantive given our MoneyFlow page: both the one week and one month differentials are positive, whilst the quarterly measure has significantly reduced its negative stance; ‘course the Index nonetheless remains vastly overvalued both fundamentally (lack of supportive earnings) and certainly so near-term (technically). Our BEGOS Market Rhythms’ leaders for best swing consistency are (on a 10-test basis) Oil’s 8hr Moneyflow, the Euro’s 30mn Moneyflow, and for Silver its 8hr and 2hr Price Oscillators, plus its 1hr Moneyflow; too (on a 24-test basis) we’ve still the non-BEGOS Yen’s daily Price Oscillator, along with Copper’s 30mn Parabolics. And October’s retail inflation (CPI) comes due for the Econ Baro as well as (purportedly) the month’s Treasury Budget.
12 November 2024 – 08:29 Central Euro Time
The elements of the EuroCurrencies and Metals Triumvirate all are at present below their respective Neutral Zones for today; the other BEGOS Markets are within same, and volatility is pushing toward moderate. As anticipated through recent weeks, Gold finally let go yesterday to the downside: price’s intra-day drop by both points (-76) and percentage (-2.8%) ranked fifth-weakest year-to-date. In turn, Gold’s weekly parabolic trend has provisionally flipped from Long to Short, whilst price has moved below its smooth valuation line (see Market Values). That for the Spoo is (in real-time) +247 points above same: the S&P 500 itself with its “live” P/E of 46.4x is now “textbook overbought” through 19 days of the past 23. We’re extending our coverage of Q3 earnings out an additional week (through 22 November) given some key constituent S&P stragglers still therein to report. Again the Econ Baro is quiet today with 14 metrics due Wednesday through Friday.
11 November 2024 – 08:33 Central Euro Time
The week’s underway with — at present — the Euro, Swiss Franc and Gold below today’s Neutral Zones; above same is the Spoo, and volatility is light. The Gold Update points to two pending negative crossings for price: should it pierce sub-2650 this week, the weekly parabolic Long trend shall flip to Short; and by Market Values, Gold in real-time is only +13 points above today’s smooth valuation line, the penetration of which then would also suggest lower levels near-term. Too, in real-time, Silver’s “Baby Blues” (see Market Trends) have provisionally moved below their 0% axis, with those for Gold within a day or so of doing same, barring a firm rally. The Econ Baro is quiet both today and tomorrow, the balance of the week highlighted by metrics for inflation and retail sales. And ’tis the final week of an on-balance below-par Q3 Earnings Season for the S&P 500, for which the “live” P/E (futs-adj’d) is presently 46.7x.
The Gold Update: No. 782 – (09 November 2024) – “Gold Trumped, Dumped”
The Gold Update by Mark Mead Baillie — 782nd Edition — Monte-Carlo — 09 November 2024 (published each Saturday) — www.deMeadville.com
“Gold Trumped, Dumped““
Gold’s +35.2% rally this year from 2072 to an All-Time High at 2802 might be couched catalytically as geo-political discomfort were (amongst other rationale) Vice President Harris to have defeated former President Trump, in turn installing her as the so-called “Leader of the Free World” come 20 January.
Whilst we understand significant angst is now running through the StateSide media over the election, on this Side of the Pond one senses relief being broadcast not so much that he won, but rather that she did not win, a reminder that Europe would still look to the U.S. in dire times.
Regardless, last Tuesday brought the reverse result, StateSide equities getting a sensational bid, and Gold — thus “Trumped” — was dumped.
So with respect to Gold, whenever it or any major financial market reaches levels of excessive near-term — or in the case of equities long-term — overvaluation, we provably know throughout history that it “corrects”, (or in simple jargon for you WestPalmBeachers down there, it “goes down”).
And typically, the distance back down reverts to one or more of the following: a measured mean; a targeted cluster of previous price structure; a notable prior high or low; and/or a retracement as guided by the mathematics of one Leonardo Pisano detto il Fibonacci, (aka “Signore Golden Ratio“).
‘Course, in addition to the distance of adversity, the most commonly-asked question with respect to price commencing a fall is: “When?”
Here at deMeadville, astride our many years of quantitative crunching, we like to think we’re ahead of the game in anticipating such overdue price movements — be they up from undervalued or down from overvalued — the bane of that being we’re oft just too damn early by such assessment to be timely for today’s trading community. ‘Tis why, as stated on our homepage: “…deMeadville is not for the low-information, short-attention span, instant gratification crowd…”, such lost souls otherwise permeating today’s Investing Age of Stoopid.
But in due course, quantitative analyses will out upon FinMedia dissemination of a “catalyst”, following which it all goes wrong for a spell. (Indeed, some entities — as were WorldCom, Enron, Lehman, et alia — never recover).
Fortunately for Gold, it always recovers and demonstrably so since President Nixon nixed the Gold Standard back in ’71. Thus when Gold swiftly dips as it just did within a six-trading-day stint — from Halloween into the StateSide election — by careening -151 points (-5.4%), ours is not to reason why. For, (albeit a bit ahead of the curve), we’ve nonetheless been anticipating such a drop. And if you read these weekly missives, you too already know — at least quantitatively — why. Cue our Market Values chart for Gold from one year ago-to-date:
Through yesterday’s (Friday’s) settle at 2692, not only is Gold still above its smooth valuation line, but has now so been for 75 consecutive trading days: that ties for the longest “above value” streak century-to-date, the longest prior being the 75 trading days during 2019 from 23 May through 09 September. To be sure, Gold (barring a significant down day come Monday) appears poised to break that record.
As well however, Gold having recently been (on a closing basis) as high as +166 points above that smooth valuation line, ’tis now only +31 points above it. Thus we sense in fairly short order (no pun intended, especially as shorting Gold is a bad idea), that price shall break below the line, the rule of thumb then being to expect still lower levels.
“Ok, you mentioned ‘distance’, mmb, so the other usual question is ‘How low is low?'”
Squire, in reviewing downside Gold penetrations of its smooth valuation line for nearly the past five years (2019-to-date), there have been 60 such occurrences. In then measuring how low did price go within each instance’s ensuing 63 trading days (i.e. one quarter) the average adversity is -4.0%. ‘Course as we hasten to point out, “average” is hardly “reality”: but from the critical standpoint of cash management, “average” keeps us from being overly surprised by downside distance. So as a back of the napkin scribbling from here:
- Gold presently is 2692;
- It’s smooth valuation line is 2661;
- Thus a -4.0% further correction below that line would bring Gold down to 2555.
In turn, 2555 is an interesting level as ’tis near a prior minor high of 2570 (20 August) which remained in place for 15 trading days (three weeks) until 12 September. Naturally, our preference is for Gold to instead move higher still from last Thursday’s 2650 low; but we’ll respect the leading qualities of the quant-crunching upon Gold’s inevitably slipping below its smooth valuation line, (such graphic updated daily at the website).
Then, too, are Gold weekly bars which per this next year-over-year display we’ve exemplified as “perfection”. However: the current parabolic Long trend appears all but done. Had price this past week broken just five points further down under Thursday’s 2650 low, such trend would have already flipped to Short. Indeed, present price at 2692 is +42 points above the ensuing week’s “flip-to-Short” level of 2650: but Gold’s expected weekly trading range is now 75 points, (the daily alone being 39 points). Thus there’s a very realistic chance that in a week’s time we’ll herein find such trend having flipped to Short — and in concert — price also having then slipped below the aforeshown smooth valuation line. Here are the weeklies:
The good news is — even upon Gold’s weekly parabolic trend eventually flipping from Long to Short — that the prior three such Short stints (since the week ending 29 September 2023) have each been but three weeks in duration: that’s it. The intervening Long trends respectively have lasted 17 weeks, 16 weeks, and the current one now 17 weeks. Perhaps a bit too much perfection there, but as crooned Steve “The Joker” Miller back in ’73 “I get my lovin’ on the run“ and certainly for Gold, such a run ’tis been!
As for the StateSide economy, ’tis been on balance rather run down, albeit the Economic Barometer has bounced and since stabilized from its August low. You tell ’em there, Jay:
‘Course the graph’s most glaring stat is the ridiculously impossible, insanely inane “live” price/earnings ratio of the S&P 500 which by “trailing 12-months earnings” (“ttm”) settled the week at 46.5x*, the S&P en route having traded above 6000 for the first time ever. (Ought we reword “The Investing Age of Stoopid” to that of the “Lobotomized”? Just a thought…).
* For fun, we also queried Assembled Inaccuracy: it replied 30.1x by “ttm”. To AI you go with your dough?
As a very close friend and business colleague wrote to us this morning: “I have no words for this market [nor] clue at this point what is going on.” Another mate at this morning’s coffee remarked: “It’s gonna go down 50%”. Did we cite means reversion above? Indeed we did. And the reason for the P/E’s relentless rise? An on-balance economic demise. Thus the earnings aren’t there, but does anyone care? As long as they beat estimates, right? Ponzi personified.
But to our point, let’s go outside the Econ Baro box. Back in 2017 when then President Trump took office, our “live” P/E of the S&P was 12% above its evolving lifetime median. Today ’tis 58% above same. Thus mathematically, earnings growth has been severely lagging the broad rise in stock prices. And through all these years, we remain mindful of the fact expressed by long-time analyst Michael Holland that — at the end of the day — stocks are valued by earnings. And they will again so be. Yet: “When?”
As to the on-balance economic demise, we decided to blow open the Baro a bit, something we’ve very rarely herein done. But as the President of the United States generally is assigned responsibly over the economy, just how did the Econ Baro comparatively do during each four-year term of the past two Presidents?
Below we’ve the four-year tracks of the Economic Barometer for President Trump (in red from Q2 2017 through Q1 2021) and for President Biden (in blue from Q2 2021 extended through Q1 2025). Whilst we never reveal the proprietary math of the Baro, ’tis been adjusted such that both tracks begin at the same level and are identically scaled. Certainly the two tracks are on-balance in net decline from where they began, and both (flat-lining the blue track from today) also look to end up at the same level as each other. Et voilà, the declining “Prez Baro” and therefore the reason why underlying earnings are not keeping pace with price:
‘Course, we know Gold looks to keep pace as does the Dollar debase. Quickly doing the math per the opening Gold Scoreboard, today at 2692, the yellow metal is priced -28% below its Dollar debasement value of 3739. Still as noted, our near-term analyses look for price to ease. And in turning to our two-panel graphic of Gold’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right, you may sense similar negativity. The baby blue dots of trend consistency are at present freely falling: upon a blue dot eclipsing below the 0% axis, the regression trend shall have rotated from positive to negative. Meanwhile per the Profile — key volume-dominant overhead resistors as labeled — the last nearby bastion of support is shown as 2674:
And ever so similar is the same construct for Silver, her “Baby Blues” (at left) just about to go sub-0%, whilst price by her Profile (at right) seeks support in the nested 31.85-31.25 area. You may also have noted earlier in the graphic of Gold’s weekly bars that the Gold/Silver ratio — which just 14 trading days ago was 78.8x — has since sprung up to now 85.7x as Silver again suffers the scourge of sinking more swiftly than Gold. Across that brief stint, the white metal has dropped -11%. Poor ol’ Sister Silver!
Trumped if not dumped, in sum, we analytically expect both Gold and Silver to weather this near-term dip. Either way, your key with them clearly is to maintain a Presidential grip!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
08 November 2024 – 08:39 Central Euro Time
Early on, down is the watchword across the BEGOS Markets, the sole exception being the Bond +1 pip; otherwise, only the Swiss Franc and Spoo are not at present below today’s Neutral Zones, and volatility is pushing toward moderate. With one week plus a day to run in Q3 Earnings Season, 65% of the S&P 500’s constituent’s have bettered their bottom lines from Q3 a year ago, which across the past seven years (ex-COVID’s 2020 quarters) is below the 68% improvement average. The futs-adj’d “live” P/E of the S&P at this instant is 44.4x and the yield 1.234%; the three-month U.S. T-Bill’s annualized yield is 4.420%. The Spoo, now over 6000, is by Market Values (in real-time) +226 points above its smooth valuation line. And the S&P itself is now “textbook overbought” through 17 of the past 21 trading days. The Econ Baro rounds out its week with November’s UofM Sentiment Survey.
07 November 2024 – 08:44 Central Euro Time
The BEGOS Markets are returning to a more orderly condition post-election: at present above their respective Neutral Zones for today are the Bond, Euro, Swiss Franc and Copper; the balance of the bunch are within same, and volatility — after having been extremely robust — is now moderate. Yesterday, Gold’s “Baby Blues” confirmed settling below their key +80% axis, suggestive of further near-term selling from which (as you regular readers know) had been an ongoing near-term overvalued stance: indeed by Market Values, Gold (in real-time) is but +14 points “high” above its smooth valuation line, the penetration of which would also suggest further downside, all of which we’ll assess in Saturday’s Gold Update. As for other Market Values’ deviations: the bond shows as nearly -5 points “low”, the Euro -0.018 points, “low”, Oil basically “in-line”, and the Spoo +186 points “high”. The day’s incoming Econ Baro metrics include September’s Wholesale Inventories and Consumer Credit, plus the initial read on Q3 Productivity and Unit Labor Costs. And come 19;00 GMT, the FOMC releases its Policy Statement for which expectations are a -25bp FedFunds rate cut.
06 November 2024 – 08:41 Central Euro Time
As anticipated in yesterday’s comment given the StateSide election, overnight volatility in the BEGOS Markets was both thin and very volatile: the average EDTR (see Market ranges) tracing thus far across the eight BEGOS components is an extreme 216 points. The Spoo is the sole market above today’s Neutral Zone; the other seven components are below same. Were the S&P to open at this instant, ‘twould “instantly” gap to a record-high 5891, (the current all-time high being 5878). By Market Rhythms on a 10-test basis for pure swing consistency, our leaders (through yesterday’s session) are Oil’s 8hr Moneyflow, Silver’s 8hr Price Oscillator, and Copper’s 8hr Moneyflow, (a lot of commonality there for measuring on an 8hr time frame); for the 24-test basis, we still highlight the non-BEGOS Yen’s daily Price Oscillator, plus the Euro’s 15mn MACD. Nothing is due today for the Econ Baro. And the FOMC commences its two-day meeting, their Policy Statement scheduled for release tomorrow.
05 November 2024 – 08:41 Central Euro Time
Both the Euro and Copper are at present above today’s Neutral Zones; below same is Oil, and BEGOS Markets’ volatility is light. In both our Prescient Commentary and the current edition of the Gold Update we’ve anticipated near-term rises for the Euro and Copper, and indeed that has come to pass at least to the point, the impetus being the up movements in their respective “Baby Blues” (see Market Trends) from having been below their -80% axes. Looking at correlations amongst the five primary BEGOS components, the best at present is negative between Oil and the Spoo. For the Econ Baro we’ve October’s ISM(Svc) Index and September’s Trade Deficit. Too, StateSide, ’tis Election Day, after which overnight trading conditions may be quite thin and volatile.
04 November 2024 – 08:01 Central Euro Time
‘Tis black across the board to start the week for all eight BEGOS Markets, with seven of them at present above today’s Neutral Zones, the sole one within being Gold; volatility already is moderate-to-robust with the StateSide election (Tuesday) and FOMC Policy Statement (Thursday) in the week’s balance. The Gold Update continues pointing to the yellow metal being overvalued near-term, yet undervalued long-term; and our inflation table therein highlights the pickup in the “Fed-Favoured” Core PCE Prices Index. By Market Values, Gold (in real-time) is +99 points above its smooth valuation line. Otherwise, ’tis a fairly light week of incoming metrics for the Econ Baro, beginning today with September’s Factory Orders.
The Gold Update: No. 781 – (02 November 2024) – “Gold’s Highs; Inflation’s Rise”
The Gold Update by Mark Mead Baillie — 781st Edition — Monte-Carlo — 02 November 2024 (published each Saturday) — www.deMeadville.com
“Gold’s Highs; Inflation’s Rise”
Gold’s Highs … Gold just recorded its 16th All-Time Weekly High within the 44 trading weeks that have completed the first 10 months of this year. Price by Gold’s “continuous front-month contract” (at present that for December) tapped 2800 for the first time ever in reaching up to 2802 this past Wednesday.
‘Course — as has been our ongoing take of late — Gold whilst still long-term vastly undervalued per the above Scoreboard’s 3738 Dollar debasement level vs. yesterday’s (Friday’s) actual settle at 2746, price near-term remains overvalued per our following Market Value gauge. Such measure assesses Gold’s typical movement relative to that of the primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P 500) which at present shows the yellow metal as +96 points “high” above its smooth valuation line to which inevitably price reverses:
Still, we maintain that Gold’s deviation from its BEGOS valuation merely underscores the run of justly due buying. In fact, across these 16 years of producing The Gold Update, never do we recall so many folks whom we encounter on a day-to-day basis questioning us about Gold. And given its significant undervaluation relative to currency debasement, we regularly point out that — despite Gold’s run of record highs — most broadly ’tis still cheap … as is Silver relative to Gold … the white metal indeed super cheap. Updating the math there: valuing Gold at 3738 and applying the century-to-date Gold/Silver evolving average ratio of 68.5x puts Silver at 
54.57! That is +67% above her present price of 32.58. Why, even applying said average ratio vis-à-vis today’s Gold level of 2746 places Silver some +23% higher at 40.09, the actual ratio at present being 84.3x. Thus we repeatedly reprise: Do not forget Sweet Sister Silver!
As for Gold itself, by the weekly bars from one year ago-to-date, we can only cue Nat King Cole from back in ’51 with“Unforgettable…”:
And yet whilst Silver by valuation significantly trails Gold, year-to-date the white metal +35.6% again tops the table of our BEGOS Markets, the yellow metal a close second +32.5%, with the inanely overvalued “Casino 500” rounding out the podium placers +20.1%. Note therein that the Dollar Index is actually positive (given yields backing up and the Bond being in the cellar): just a friendly reminder that Gold plays no currency favourites:
To the precious metals’ equities we go, the graphic ever so exemplary of the adage “Live by the leverage, die by the leverage” notably with respect to Newmont (NEM). The company’s Q3 earnings of 81¢/share more than doubled those of a year ago (36¢/share): but the stock was taken out behind the woodshed for having missed the consensus estimate of 86¢/share. Bummer.
Still from the top down by their percentage tracks from a year ago-to-date we’ve Agnico Eagle Mines +83%, the Global X Silver Miners exchange-traded fund (SIL) +59%, Pan American Silver (PAAS) +57%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +42%, Gold itself +38%, Newmont (NEM) +21%, and Franco-Nevada (FNV) back in the black +10%. The equities perhaps are not for those faint of heart, but well-suited for the long-term smart:
Gold’s highs, indeed. ‘Tis been thus far an amazing year. But is inflation, dare we say stagflation, perhaps to appear?
Inflation’s Rise … All the broad measures of inflation data are in for the month of September. And with respect to the so-called “Fed-favoured” inflation gauge of Personal Consumption Expenditures, ’twas hailed by Dow Jones Newswires this past Thursday as follows: “PCE inflation edges closer to Fed’s 2% target, keeping FOMC on track for next interest-rate cut.” A bit of a stretch that, especially as we do the math. To be sure, the headline PCE 12-month summation dropped from August’s 2.2% to 2.0%. But then we’ve the big BUT: that for the core PCE was maintained at +2.6%, — and moreover — the month’s annualized pace increased for the headline number from +1.2% in August to +2.4% for September. Even worse, the core number rose from 1.2% as well to 3.6%. Whoops! Here’s our updated table:
So following September’s leap in core PCE inflation came October’s job creation of a scant 12,000 non-farm payrolls (vs. the consensus expectation for 123,000 after 223,000 in September), and thus our justification for having mentioned the word stagflation. Still, mitigative to that may be the recent rising of the Economic Barometer as shown here from a year ago-to-date, the red-line S&P 500 indicative of investors keeping stocks on their plate despite some mild selling of late:
“The S&P has been coming back down, mmb, but to call it ‘mild’?”
Nobody tees it up better than Squire. His observance notwithstanding, the wee rightmost drop indeed is comparatively “mild” relative to the increase in the S&P year-over-year. And of even further import, here (employing “trailing 12-months earnings”) is the truthfully “live” price/earnings ratio of the S&P 500, duly including these two most recent consecutive down weeks:
At least we can offer a hat-tip to the mighty Swiss-based UBS, whose Nicolas le Roux-led strategy team just penned the bank’s expectations “…for equities to cheapen relative to bonds…” Perhaps Nico and company have been reading The Gold Update and the website’s daily Prescient Commentary both of which have gone on ad nauseum for months about same. Just in case you’re scoring at home, the all-risk S&P yield is presently 1.293% whilst no-risk U.S. debt across the maturity spectrum yields better than 4%. (Which means for you WestPalmBeachers down there … no, forget it … you’re too pre-occupied in trying to figure out how to do a ballot).
Meanwhile, it being month-end (plus one trading day), ’tis time to go ’round the horn for all eight of our BEGOS Markets from a month ago (last 21 trading days)-to-date, featuring their respective grey linear regression trendlines and “Baby Blues”, the dots denoting the consistency of said trends. Focus here ought be on both the Euro and Copper, their “Baby Blues” having curled up from beneath the -80% level, the rule-of-thumb being to then anticipate higher price levels near-term:
Too, we’ve the 10-day Market Profiles for the precious metals, featuring Gold on the left and Silver on the right. In both cases, their dominant volume price resistors are as labeled:
And as is our wont to write, ‘twouldn’t be month end (and a day) without the stratified Gold Structure by the month from 16 years ago-to-date. Yes, Gomer, you tell ’em: for our Gold of late ’tis been nothing but “SHAZAAM!” mate:
StateSide there’s an election next week. Just as the frequency with which we’re asked about Gold these days has been inexorably on the increase, so too are we questioned: “Who’s gonna win?”
‘Course, nobody knows, and sentiment varies based on one’s favoured sources of information, given that 99.999% of us have never actually met (let alone personally know) either the “current democrat” nor the “former democrat”.
But the one point upon which all seem to agree is — regardless of who “wins” or is “declared” the next President — there shall be an ensuance of StateSide chaos both in the markets and (hopefully still) civil society. Gold, too, could certainly get banged about a bit: again, ’tis near-term overvalued. But because ’tis long-term undervalued — be it on the left or on the right — Gold is far and away the best candidate to keep your future bright!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
01 November 2024 – 08:10 Central Euro Time
Both the Bond and Gold are at present above today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is light. ‘Twas somewhat refreshing to see yesterday’s -1.9% dip in the S&P 500, the Spoo finally coming back in line with its smooth valuation line (see Market Values) for the for time since 10 September; indeed the Spoo retraced back nearly a month’s worth of gains in a single session; ‘course more broadly, the S&P itself remains extremely expensive, the “live” (futs-adj’d) P/E presently 41.5x. Gold, too, had a bit of a hoovering, albeit price (in real-time) is still well above its smooth valuation line by +111 points; more in tomorrow’s 781st consecutive Saturday edition of The Gold Update. The Econ Baro looks to close out its busy week with October’s Payrolls Data and ISM(Mfg) Index, plus September’s Construction Spending.
31 October 2024 – 08:13 Central Euro Time
The Bond is at present above today’s Neutral Zone, whilst below same are both Gold and the Spoo; BEGOS Markets’ volatility is moderate; the non-BEGOS Yen has already traced 126% of its EDTR, (for that of the actual BEGOS components see Market Ranges); the Yen has worked all the way back up to close the gap following its fallout from last Sunday’s parliamentary election. By Market Trends, the 21-day linregs are positive for Gold, Silver and the Spoo, but are negative for the Bond, Euro, Swiss Franc, Oil and Copper: as noted yesterday however, Copper’s “Baby Blues” have moved above their key -80% axis, typically meaning a near-term up move for price. ‘Tis a busy day for the Econ Baro, incoming metric’s including October’s Chi PMI, September’s Personal Income/Spending and “Fed-favoured” Core PCE Prices as an inflation gauge, plus Q3’s Employment Cost Index.
30 October 2024 – 08:21 Central Euro Time
At present we’ve Gold as the sole BEGOS Market above its Neutral Zone for today; the balance of the bunch are within same, and volatility is light. The yellow metal today has traded above 2800 (2802) for a fresh All-Time High. And leading all 405 of our Market Rhythms for pure swing consistency on a 10-test basis is Gold by its 4hr Moneyflow. On a 24-test basis, the leader is still the non-BEGOS Yen’s daily Price Oscillator, followed by Copper’s 15mn Moneyflow: the red metal’s “Baby Blues” (see Market Trends) yesterday confirmed having moved above their -80% axis, suggestive of a near-term run from here in the 4.30s up into the 4.50s. For the Econ Baro we’ve October’s ADP Employment data, September’s Pending Home Sales, and the first peek at GDP for Q3.
29 October 2024 – 08:00 Central Euro Time
Safe havens are getting the bid early on as we’ve the Bond, Gold and Silver all at present above today’s Neutral Zones; below same are Copper and Oil, and BEGOS Markets’ volatility is pushing toward moderate. Our best current correlation amongst the five primary BEGOS components is negative between Oil and the Spoo: the best Market Rhythms therein (both on a 10-test basis for pure swing consistency) for Oil is its 8hr Moneyflow and for the Spoo its 12hr MACD. Gold’s All-Time High is 2773 (23 October) with present price 2767 and an EDTR (see Market Ranges) of 30 points; still, by Market Values, Gold near-term remains “high”, now (in real time)+123 points above its smooth valuation line. For the Econ Baro we await October’s Consumer Confidence.
28 October 2024 – 08:10 Central Euro Time
We begin the busy week finding at present the Bond, Swiss Franc, Gold and Oil below their respective Neutral Zones for today; above same is the Spoo, and volatility is moderate-to-robust, the Bond already having traced 110% of its EDTR (see Market Ranges). The Gold Update lauds the yellow metal’s near-perfect performance this year, indeed having come within $1,000/oz. of its Dollar debasement valuation for the first time in ten years; still, we warily point to Gold’s near-term overvaluation per price’s movement relative to the other primary BEGOS Markets: in real-time, Gold is +117 points above that smooth valuation line (see Market Values). Nothing is due today for the Econ Baro ahead of a slew of 17 incoming metrics as the week unfolds. And at the halfway point of Q3 Earnings Season for the S&P 500 constituents, ’tis running about average per prior year-over-year quarterly improvements (68% thus far doing better and thus 32% not so).
The Gold Update: No. 780 – (26 October 2024) – “Gold Taps a Ten-Year Frontier”
The Gold Update by Mark Mead Baillie — 780th Edition — Monte-Carlo — 26 October 2024 (published each Saturday) — www.deMeadville.com
“Gold Taps a Ten-Year Frontier”
‘Tis taken ten years, but what just happened?
“Well, mmb, I’m gonna take a stab at this: for the 207 trading days so far this year, Gold has made a record high for 37 of ’em.”
A spot-on and well sussed-out observance there, Squire, but that’s not our highlight. Rather, the answer is in the above Gold Scoreboard’s math. Ready? Here we go:
- As shown, Gold settled out this past week yesterday (Friday) at $2,761/oz.
- Gold’s valuation (even given its own supply increase) relative to debased M2 is now $3,736/oz.
- The difference? $2,761 – $3,736 = -$975.
Thus for the first time in ten years (since the week ending 25 July 2014), Gold at week’s end is now above the -$1,000 undervaluation frontier relative to where it ought be given Dollar debasement. ‘Tis all there to below behold across the past 45 years, the rightmost pip having just eclipsed that red frontier:
Gold’s firm rally so far this year (correctly incorporating Squire’s 37 days of All-Time Highs) has remained magnificently intact, indeed having well-exceeded our “conservative” (as ’twas couched at New Year) forecast high in 2024 of 2375.
So per the above graphic, having surpassed (at least for the moment) the -$1,000/oz. undervaluation frontier, does this mean Gold finally is en route in racing up to where it “ought be”, (i.e. at the horizontal green line)?
To be sure, Gold (cue the yucky woke word) “awareness” is certainly increasing at least per the pages of the FinMedia. But is that translating into enough substantive buying to power Gold to its proper 3700+ perch? A good many years ago on a Merrill Lynch “call to clients” in which a piece of our work was featured, the host opined that only some 5.0% of managed portfolios carried Gold exposure. Then in more recent years, (Al Gore’s invention of the internet having since extrapolatively expanded), such number has been bandied down to as low as 0.5%.
We’ve thus decided to go with something assumed to be in the modern-day know: “AI“. So in specifically querying such “Assembled Inaccuracy”, the salient part of its responding was: “…75 percent of private client discretionary investment managers have under 2.5 percent gold exposure…”, followed by the available sources “AI” scrounged, and in turn, its disclaimers.
‘Course for this to have any meaningful relevancy, we need know the status of the other 25%. Otherwise ’tis all (per The Stones from ’65): “…About some useless information, Supposed to fire my imagination, I can’t get no … Satisfaction…” let alone accuracy as to managed Gold ownership.
The bottom line being: as long as stocks remain “the only thing”, Gold shan’t immediately the 3700+ bell ring.
Still, one can’t argue with the golden brilliance of price’s weekly bars from a year ago-to-date, the current blue-dotted parabolic Long trend having completed its 15th week with still plenty of room (154 points) between present price (2761) and the “flip to Short” level (2607, itself now rising at a rate of some +30 points per week). Either way, wherein understanding range is critical to cash management, Gold’s expected weekly trading range is now 73 points; the daily range (see the website’s Market Ranges and/or Gold page) is currently 31 points. So notwithstanding the near-term overvaluation note therein, our Gold graphic here points as positively as one could prefer:
As to the StateSide economy, our Economic Barometer points to it of late as trendless, the International Monetary Fund with a more optimistic view than that of the Fed per the latter’s Tan Tome for October released this past Wednesday. And specific to the Baro, ’twas a very light “50/50” week with just six incoming metrics of which three bettered their prior period. Amongst the batch was the Conference Board’s “Leading Indicators” (to which we refer as “lagging” because the Baro leads them) for September which were negative for the seventh consecutive month, and further, for the 28th negative month in the last 30. (Recall as well from the Econ Baro a week ago the “WaPo” OpEd quote about this being “one of the best economic years of many Americans’ lifetimes” … but suddenly they’ve decided not to endorse “re-election” of the “current” Administration … That’s gonna bruise). Here’s the Baro:
And stark in the Baro’s upper-right corner we’ve the “live” price/earnings ratio of 43.6x for the S&P 500. Obviously toward approaching the midpoint of Q3 Earnings Season, there’s not been significant enough improvement to bring that ratio down. In fact for those of you scoring at home, of the 503 S&P constituents, 161 have reported, of which 109 bettered their bottom lines from a year ago. That is a 68% bettering pace which is “average” vis-à-vis recent years, even excluding 2020’s COVID profits-dearth. One wonders how might ol’ Jerome B. Cohen (“in bull markets the average level would be about 15 to 18 times earnings”) might react to this data: only 160 (32%) of the S&P 500 entities have P/Es less than 20, with 52 companies either exceeding 100x or without earnings at all. (‘Tis again why — instead of the stock market — we prefer the safe, serene, security of the futures markets). And if that’s too complex for you WestPalmBeachers down there, then we simply ask: “Got Gold?”
Here’s Gold via our two-panel display, featuring on the left price’s daily bars from three months ago-to-date, whilst on the right is the 10-day Market Profile such that you can see which prices having been carrying the most trading volume. For both panels, as herein inferred a week ago, ’tis hard to improve upon perfection. Still, as aforementioned, we’re wary of near-term price reversion to its smooth valuation mean of presently 2644:
With the same drill for Silver, we might as well photocopy that for the yellow metal and merely change the colour to this for the white metal. ‘Course, the important inference here is Sister Silver having been adorned in her precious metal pinstripes as opposed to her industrial metal jacket, (the latter being her preference when acting as the bad girl with Cousin Copper). But that clearly is not the current case, the red metal’s own “Baby Blues” of trend consistency being comprehensively in the dumpster (per the website’s Market Trends and/or Copper page). So stay sweet, Sister Silver!
Then there’s next week, for which the load of incoming economic metrics is massive(!). 17 reports come due for the Econ Baro, including the “Fed-Favoured” inflation gauge of Core Personal Consumption Expenditures Prices for September. And the “consensus” expection is for it to have risen … we even read within the mist of the past week’s FinMedia the query (paraphrased) “What if the Fed instead raises rates?” come its Open Market Committee’s post-election meeting (06-07 November). We’ll be updating our inflation table for next week’s piece.
Meanwhile, creativity abounds in the headlines. Try this CNBS (truth be told) from yesterday: “In this time of uncertainty, markets seem to rely on logic.” Folks, you cannot make this stuff up, (except, they’re doing their best to so do). If markets were relying on logic, today’s S&P 500 (5808) given its ghastly P/E would be half that (2904), whilst Gold (2761) would be ’round its Scoreboard valuation (3736). True, the markets are never wrong, but misvalued opportunities abound! Especially for the precious metals all ’round!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
25 October 2024 – 08:03 Central Euro Time
At present, we’ve the Bond above its Neutral Zone for today, whilst below same are both Gold and Copper; BEGOS Markets’ volatility is again light. With the exception of Silver, EDTRs (see Market Ranges) have been falling for recent weeks across the BEGOS’ board; for example, specific to the Spoo, its EDTR for 08 August was at a 124-point peak: for today’s session ’tis set for 57 points. By its Market Profile, the Spoo’s most dominantly-traded handles across the past fortnight are right here at 5849, notable overhead resistors being 5863, 5886, 5897 and 5909; and in real-time, the Spoo by Market Values is +99 point above its smooth valuation line. The Econ Baro concludes its quiet week with metrics including September’s Durable Orders.
24 October 2024 – 08:01 Central Euro Time
Following a day wherein all eight BEGOS Markets finished in the red, today they all are at present in the black; currently above today’s Neutral Zones are the Bond, the Metals Triumvirate, and Oil; session volatility is light. Going ’round the Market Values horn (in real-time) for the five primary BEGOS components: the Bond vis-à-vis its smooth valuation line shows as nearly -7 points “low”, the Euro as -0.035 points “low”, Gold as +101 points “high”, Oil as fairly in line (as has been its case for almost two weeks), and the Spoo as +104 points “high” even accounting for yesterday’s selling; too, the S&P 500 itself (-0.9% yesterday) remains “textbook overbought” through a 10th day. Incoming metrics due for the Econ Baro include September’s New Home Sales.
23 October 2024 – 08:04 Central Euro Time
We’ve both the Bond and Swiss Franc at present below their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is pushing toward moderate. Gold for now a fifth-consecutive session has recorded an All-Time High, this latest thus far today being 2767; too, Silver has achieved the 35 handle for the first time since 05 October 2012; the Gold/Silver ratio is currently 79.3x, meaning Silver remains historically quite cheap relative to Gold, itself — despite new highs — still very cheap given Dollar debasement. As for Market Rhythms for pure swing consistency, on a 10-test basis for the best we’ve the non-BEGOS Yen’s 2hr Parabolics and for the Bond both its 12hr Parabolics and 2hr Moneyflow; on the 24-test basis, the non-BEGOS Yen’s daily Price Oscillator still tops the list. The Econ Baro looks to September’s Existing Home Sales; the later in the session comes the Fed’s Tan Tome for October.
22 October 2024 – 08:14 Central Euro Time
The Bond continues to work lower as yields rise, price at present below today’s Neutral Zone as is the Spoo; above same are both Gold and Silver, and BEGOS Markets’ volatility again is light. The Bond’s “Baby Blues” (see Market Trends) have not yet eclipsed above their -80% axis as the selling continues. Looking at correlations amongst the five primary BEGOS components, the best is currently negative between the Bond and Oil. The S&P 500 completed its eighth consecutive session as “textbook overbought”; the Index’s MoneyFlow, whilst coming back into line near-term, still on a quarterly basis shows the S&P as some +250 points “too high”; the futs-adj’d “live” P/E is now 44.0x, thus no substantive improvement in bottom lines relative to price as Q3 Earnings Season continues, now into its third week of six. The yield on the S&P is 1.255% vs. 4.518% annualized on risk-free U.S. three-month dough.
21 October 2024 – 08:21 Central Euro Time
At present we’ve the Euro below its Neutral Zone for today, whilst above same are Silver and Copper; BEGOS Markets’ volatility is light. Gold thus far has made a marginal All-Time High at 2748; The Gold Update cites price’s having risen even as — unusually — have the levels of the Dollar Index, yields, S&P 500, as well as the equivalent rate of the FedFundsFutures; regardless, we remain wary of Gold (by Market Values) being +110 points (in real-time) above its smooth valuation to which price inevitably reverts. ‘Tis a fairly light week for incoming Econ Baro metrics, today bringing September’s Leading (i.e. “lagging”) Indicators. Q3 Earnings Season enters its third week of six scheduled: thus far for the S&P 500: 82% have beaten estimates, but only 64% have improved over Q3 a year ago.
The Gold Update: No. 779 – (19 October 2024) – “Gold Up; Dollar Up; Yields Up — What’s UP?”
The Gold Update by Mark Mead Baillie — 779th Edition — Monte-Carlo — 19 October 2024 (published each Saturday) — www.deMeadville.com
“Gold Up; Dollar Up; Yields Up — What’s UP?”
‘Tis simple really. Against all conventional wisdom (to the extent that any wisdom whatsoever remains as The Investing Age of Stoopid rolls merrily along), Gold is merely yet again proving — as on occasion is its wont — that it plays no currency favourites.
Too, ’tis great having returned following our travels amongst the wilds of easternmost England, to now be ensconced in the quiet confines of our otherwise palatial estate. However, it does beg the pro-Gold question: ought we perhaps travel more often? For in the wake of last week’s brief “in-motion” missive “Gold in 60 Seconds (III)”, the yellow metal went on to record a series of fresh All-Time Highs, reaching yesterday (Friday) up to 2738 before settling at 2736. And note the suggestion of Gold en route to closing the gap from its Dollar debasement value in the above Scoreboard’s right-hand panel. Just an observance…
“But it’s not about you, mmb, so may we stick to the issues?“
Of course, Squire, duly noting our having been out-of-pocket without your skillful support last Saturday was a challenge.
But on with the show, beginning with the following two-panel graphic depicting several series of what are more usually Gold-negatively-correlated entities across the past 21 trading days. On the left we’ve Gold from 20 September through 19 October along with the independently-scaled Dollar Index: and yes, Virginia, as we’ve seen in the past, both Gold and the Dollar have been on the rise. On the right for the same one-month stint we’ve the annualized yield of the U.S. 30-year Treasury Bond and the FedFundsFutures equivalent rate, also both on the rise. Naturally, axiomatic fanatics argue this can’t occur, but (in again cuing Tag Team from ’93) “Whoomp! (There It Is)”:
‘Course, with Gold on the rise and also the Dollar and also yields, ’tis a no-brainer that equities must be in “Dire Straits” … however “Why Worry”(’85): for the S&P 500 set another record high (5878) this past Thursday, the “live” price/earnings ratio settling the week at 43.7x, +72% above its inception a dozen years ago. But as we’ve been stating time and again, earnings no long matter, (see the S&P 500 from 24 March 2000 through 10 October 2002).
“But obviously, mmb, the market always goes all the way back up and as you say, ‘beyond’, eh?“
Squire, throughout the 67-year history of the S&P 500, that has ultimately been the case. But in this current age of the “low-information, short-attention span, instant gratification crowd“, patience would be vapid in weathering a 13-year, double-dip S&P 500 trough for a price gain of just 2% as we witnessed following 24 March 2000 until 10 April 2013. It happens.
But let’s go to what truly of late has been “The Happening”(The Supremes, ’67): by yesterday’s 2736 settle, Gold year-to-date is now +32%, second only to the BEGOS Market component Silver, she now +41%! Indeed, the white metal’s long-overdue “catching up” is in play to some extent, the Gold/Silver ratio — as below noted at the foot of Gold’s weekly bars graphic — having been reduced this past week to now 80.7x, its lowest reading since 16 July, (but still well above the century-to-date average of 68.5x). Thus with Gold remaining very cheap relative to currency debasement — and Silver still a bargain relative to Gold — here is the yellow metal from one year ago-to-date:
With a justifiable nod toward Gold jubilation and its still being ever so cheap from the long-term currency debasement perspective, as has been our prudent point of late: Gold near-term remains “high” relative to its BEGOS valuation. So again we next display Gold’s daily closes from one year ago-to-date astride its smooth valuation line — itself rightly rising — but suggesting price “ought be” (per the lower panel oscillator) some -111 points lower at 2625. To be sure, ’tis a one-off valuation for Gold given its price movement relative to those of the other four primary BEGOS Markets; but obviously price and valuation inevitably meet … just in case you’re scoring at home:
Now this next graphic comes with a loss of words to substantively describe, if for no other reason than ’tis perfection for the daily bars across the past three months-to-date featuring Gold on the left and Silver on the right. As noted, the yellow metal is at a record closing high of 2736, whilst the white metal at 33.93 is at its best daily settle since 29 November 2012. Nuff said:
And thus segueing to the precious metals’ 10-day Market Profiles, it stands to reason that we find both Gold (below left) and Silver (below right) essentially at the top of their respective stacks, notable underlying volume-supportive prices as labeled:
Towards this week’s wrap, with The Washington Post opining that the 2024 StateSide economy may be amongst the best of our lives, we indeed turn to the Economic Barometer. Of the 14 metrics taken in by the Econ Baro this past week, six improved period-over-period … meaning that eight did not improve. The week’s notable winner was substantive growth in the pace of Retail Sales for September. But amongst the stinkers came shrinkage in September’s Industrial Production from August’s +0.3% to -0.3% and a like erosion in the New York State Empire Index from +11.5 in September to -11.9 for October. Still, “WaPo” says ’tis all on go. Do you think so? Here’s the Baro:
So “What’s UP?” indeed! With Gold and the Dollar and Yields and even the stock market all on the rise, might we be facing a Fed surprise? After all, as aforeshown, the rate equivalent of FedFundsFutures also is up of late. The Federal Reserve’s Open Market Committee issues its next Policy Statement on 07 November … which is a Thursday! Why not on the usual Wednesday? One guess may be that “they” (whoever “they” are out there) still shan’t have “declared” the winner of the Tuesday, 05 November Presidential Election. “Well, there’s millions of mail-in ballots still to count, ya know…” And of course ’tis The President who nominates the FedHead. So might it behoove one to see who’s won before the next Fed policy is spun, lest it all come undone?
For in speaking of spin, hat-tip “Political Calculations” with this gem:
And keep your hat tipped to Gold as THE gem!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on “X”: @deMeadvillePro
18 October 2024 – 08:23 Central Euro Time
The three elements of our Metals Triumvirate are all at present above today’s Neutral Zones, whilst below same is the Bond; BEGOS Markets’ volatility is light-to-moderate. Per Wednesday’s comment, the Bond’s “Baby Blues” (see Market Trends) have yet to curl up above their -80% axis: thus at bay remains our notion for a move up into the 124s, (price currently 119^28); moreover, the Bond’s 12hr Parabolics flipped to Short effective today’s open, that study leading (for pure swing consistency) the 405 studies tested nightly for our Market Rhythms. Gold has made All-Time Highs both yesterday and thus far today up to 2729 even as price vis-à-vis its smooth Market Values line shows (in real-time) as +99 points “high”; more of course in tomorrow’s 779th consecutive Saturday edition of The Gold Update. The Econ Baro concludes its week with September’s Housing Starts/Permits.
17 October 2024 – 08:18 Central Euro Time
The Bond, Swiss Franc, Silver and Copper all are at present below their respective Neutral Zones for today; Gold is above same, and session volatility is light. Going ’round the Market Values horn for the five primary BEGOS Markets (in real-time): the Bond is better than -5 points “low” vis-à-vis its smooth valuation line, the Euro -0.035 points “low”, Gold +73 points “high”, Oil basically in line, and the Spoo +169 points “high”. Gold at 2697 is by its EDTR (see Market Ranges) of 31 points well within range of an All-Time High (2709). And ’tis a busy day for the Econ Baro, incoming metrics including October’s Philly Fed and NAHB Housing Indices, September’s Retail Sales and IndProd/CapUtil, plus August’s Business Inventories.
16 October 2024 – 08:16 Central Euro Time
At present, all eight BEGOS Markets are within their respective Neutral Zones for today, and volatility is quite light. By Market Rhythms, the best of the bunch for pure swing consistency on a 10-test basis are the Bond’s 12hr Parabolics and the Swiss Franc’s 1hr Moneyflow, whilst on a 24-test basis we’ve the non-BEGOS Yen’s daily Price Oscillator, and the 30mn Moneyflow on both the Swiss Franc and Spoo. At Market Trends, the Bond’s “Baby Blues” — although still below their -80% axis — have begun curling upward: upon confirmation of eclipsing -80% we look for price to move up into the 124s. Cac volume for Oil has begun rolling from November into December. The Econ Baro awaits September’s Ex/Im Prices. And with Q3 Earnings Season still quite young, of the 21 S&P 500 constituents having thus far reported, 10 (48%) did not improve their bottom lines from Q3 a year ago.
15 October 2024 – 08:19 Central Euro Time
As was the case ’round this time yesterday, again both Copper and Oil are at present below today’s Neutral Zones, as too is the Euro; the Bond is above same, and BEGOS Markets’ volatility is pushing toward moderate. Looking at correlations amongst the five primary BEGOS components, the best currently is positive between the Bond and Euro. The Dollar Index is at a two-month high (103.120). The S&P 500 yesterday achieved another record high at 5871, the futs-adj’d “live” P/E now 44.2x. FedFundsFutures are indictive of the FOMC going with a -25bp rate cut come 07 November. The Econ Baro awaits October’s NY State Empire Index.
14 October 2024 – 08:21 Central Euro Time
We’ve both Copper and Oil at present below today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is mostly light. The Gold Update — a brief edition given our having been in motion on the weekend — reiterates our near-term wariness for some weakness in price, whilst emphasizing our long-term bullish view; this morning, Gold’s “Baby Blues” (see Market Trends) are continuing their descent as is the case for all the BEGOS components save for Oil and the Spoo. By Market Profiles, Gold’s most notable trading support by volume is 2671-2166, whilst Silver sees overhead resistance from 31.75 to 32.00. Nothing is due today for the Econ Baro ahead of some 13-14 incoming metrics as the week unfolds; too, the pace increases for Q3 Earnings Season reports
The Gold Update: No. 778 – (12 October 2024) – “Gold in 60 Seconds (III)”
The Gold Update by Mark Mead Baillie — 778th Edition — Easternmost England — 12 October 2024 (published each Saturday) — www.deMeadville.com
“Gold in 60 Seconds (III)”
Our title’s Roman “III” is indicative of having used “Gold in 60 Seconds” now for the third time across these esteemed Saturday missives’ 15 years (previously on both 16 April ’16 and 08 March ’14). Again, this time ’tis so apropos. For as herein previewed a week ago…
Greetings from a remote, undisclosed, rural location in easternmost England, an area sufficiently primitive that in lieu of digital internet connectivity we are reliant upon the dear old analog telegraph to produce this week’s piece. And with time to write this week at an extreme premium, let’s get salient straightaway with just the key graphics (to the extent they can visually be reproduced via the telegraph).
For all the hype over the past StateSide “Inflation Week” — which at the retail level (CPI) was more robust than consensus anticipation, yet at the wholesale level (PPI) relatively benign — Gold netted a gain for the week of (deep breath … ready?) exactly one point in settling yesterday (Friday) at precisely 2674.2 vs. the prior Friday’s 2673.2. Here are Gold’s weekly bars from one year ago-to-date, the blue-dotted parabolic Long trend now 13 weeks in duration, even as price has made a “lower high” now twice in succession:
Per recent editions of The Gold Update — as well of late in the daily Prescient Commentary — we’ve been alluding to Gold’s being “high” relative to its smooth valuation line to which price inevitably reverts as we next see from this time a year ago to now. The smooth line reflects a near-term valuation for Gold based on its movement relative to those of the five primary BEGOS Markets (Bond / Euro / Gold / Oil / S&P 500). The graphic’s lower panel oscillator (price less valuation) tells the tale that with price recently stalling, ’tis becoming more in line with valuation, the good news there being (as herein highlighted a week ago) the BEGOS valuation for Gold is rising:
Again, that’s merely a near-term view, for long-term by the opening Gold Scoreboard (which may appear graphically-challenged per said analog telegraph transmission), the yellow metal today at 2674 is undervalued by some -1069 points per its 3743 Dollar debasement value. Dip Gold may near-term do, but long-term do not Gold eschew.
Meanwhile, the relentless S&P 500 made record highs both this past Wednesday and Friday, en route to settling the week at 5815. ‘Course, its “live” P/E ratio remains staggeringly high at 43.6x, some +72% above its inception a dozen years ago. But we reprise: the S&P’s saving grace is earnings no longer having a role in “valuing” stocks. “Les jeux sont fait; rien ne va plus.” And as to near-term technicals: through 197 trading days this year-to-date, the S&P 500 has been “textbook overbought” for 122 of them, including now. (A word to the wise is sufficient).
In concert with the the one-way stock market is the Economic Barometer, albeit hardly are they in tune with one another as shown here year-over-year. One cannot beat the modern day reality of a weakening economy being of benefit to the S&P 500. As ’tis said “If it’s so easy, then everybody would do it.” And indeed, they are. But be it the “Look Ma, No Earnings!” crash — or worse — the “Look Ma, No Money!” crash, at some point, such unsustainability shall revert to the mean, as relative to earnings the S&P 500 has historically done since its creation 67 years ago in March of 1957.
Of this week’s total 60-seconds read, we’ve but 10 seconds left to offer. Thus swiftly let’s bring up the two-panel display of Gold’s daily bars from three months ago-to-date on the left and 10-day Market Profile on the right: Therein, most key are the falling “Baby Blues” of trend consistency. As penned in last Tuesday’s Prescient Commentary: “…we’d look for lower precious metals prices near-term, perhaps for Silver right ’round 31 and for Gold 2620-2570…”:
So there briefly ’tis for this week as we simply must scoot. 14 incoming metrics are due next week for the Econ Baro, plus Q3 Earnings Season starts to become more voluminous; (but be they better or worse, as noted, earnings today are simply passé).
Thus from the undisclosed wilds of easternmost England, we bid you “Good Day!”, and that many-a-good Gold trade come your way!
Cheers!
…m…
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11 October 2024 – 08:18 Central Euro Time
Similar to yesterday at this hour, BEGOS Markets’ volatility is very light ahead of StateSide wholesale inflation for September. Gold is the sole component outside (above) its Neutral Zone for today; price is recovering much of its intra-week loss, although in real-time ’tis +54 points above its smooth valuation line (see Market Values); too, as is the case with Silver, the Euro Currencies, the Bond and Copper, Gold’s “Baby Blues” of trend consistency are clearly in descent (see Market Trends) in concert with the rebounding Dollar these past two weeks. As noted in the still current edition (No. 777) of The Gold Update, tomorrow’s edition (No. 778) is likely to be quite brief as we shall be “in motion” from remote, easternmost England; regardless, we shall highlight the key salient state of Gold. As noted today for the Econ Baro, incoming metrics include September’s PPI and purportedly the month’s Treasury Budget (which yesterday was not released), plus October’s UofM Sentiment Survey.
10 October 2024 – 08:20 Central Euro Time
As we saw yesterday ’round this time, the eight BEGOS Markets are presently all within today’s Neutral Zones, with volatility very light (the average Market Ranges’ EDTR thus far just 23%) ahead of retail inflation for September. Gold from Monday’s open to Wednesday’s close is sporting its weakest down week by points since that ending 24 May, (obviously with two trading days still in the balance); but ’tis indicative of the near-term overvaluation unwinding, price in real-time now only +31 points above its smooth valuation line by Market Values. The S&P 500 set a record high yesterday at 5797: the “live” futs-adj’d P/E is now 43.8x which is 72% above its inception back in 2013, underscoring the continuously extreme overbought condition of equities, especially given the far better returns in the StateSide debt market. Included with September’s CPI, the Econ Baro also awaits metrics that include the month’s Treasury Budget.