We’ve weakness this morning in the Bond and EuroCurrencies; the other BEGOS Markets are at present within today’s Neutral Zones, and volatility is again light. As did the Spoo on Wednesday, the Bond has now confirmed its “Baby Blues” (see Market Trends) having crossed below their key +80% axis: currently priced at 122^15, we can see a near-term run down into the 120 handle. The leading MoneyFlow for the S&P 500 continues to deteriorate more swiftly than the downside change in the Index itself, even as the “textbook overbought” condition concluded with a 39-trading-day streak. And for the Econ Baro, ’tis Payrolls day for December, along with the month’s ISM(Svc) Index, plus November’s Factory Orders.
Mark
04 January 2024 – 09:09 Central Euro Time
The BEGOS Markets are quiet, at present all eight components within their respective Neutral Zones for today; obviously, volatility is light. Despite the S&P 500 having recorded two down days to commence the year, it nonetheless is entering what would be a 40th consecutive trading day as “textbook overbought”: having settled yesterday at 4704, an up session today would likely maintain that condition, else a down day would finally nix it. Too for the Spoo, its “Baby Blues” (see Market Trends) confirmed settling below their +80% axis yesterday, suggestive of still lower price levels ahead: whilst this is a highly reliable leading near-term indicator, the prior such occurrence failed to produce anything materially to the downside. Today’s Econ Baro metrics include December’s ADP Employment data.
03 January 2024 – 09:02 Central Euro Time
At present we’ve weakness in the Bond and Copper, and strength in the Euro; BEGOS Markets volatility is light. As tweeted [@deMeadvillePro], whilst the S&P dropped -0.6% to start the year, the MoneyFlow regressed into S&P points fell -2.1%: as this is a leading indicator, we look to still lower S&P levels near-term, especially as the Index itself is now 38 consecutive trading days “textbook overbought”. Debt yields and the Dollar rose in beginning 2024, counter to FinMedia expectations of their “Fed pivot”. The Econ Baro awaits December’s ISM(Mfg) Index; too, we’ve the FOMC Minutes from the 12-13 December meeting.
02 January 2024 – 09:14 Central Euro Time
Early on the New Year we’ve weakness in the Bond and EuroCurrencies, and strength in Gold, Silver, Oil and the Spoo. The Gold Update targets a “conservative” high in 2024 for 2375 as detailed in the write-up. The S&P 500’s “textbook overbought” condition ranks in the 97th percentile of all such conditions across the past 44 years, the “live” P/E settling 2023 at 46.3x, an 82% increase from its inception a dozen years ago, purely reflective of earnings not keeping pace with price. In real-time, the Spoo is 193 points above its smooth valuation line (see Market Values). The Econ Baro kicks off the year with 10 incoming metrics this week, including due today November’s Construction Spending.,
The Gold Update: No. 737 – (30 December 2023) – “Gold – We Conservatively Forecast 2375 for 2024’s High”
The Gold Update by Mark Mead Baillie — 737th Edition — Monte-Carlo — 30 December 2023 (published each Saturday) — www.deMeadville.com
“Gold – We Conservatively Forecast 2375 for 2024’s High“
‘Twas a year ago at this time we opted out of forecasting a high price for Gold in 2023, other than to opine ‘twould make a new All-Time High (above that of 2089 from 07 August 2020), which indeed eventuated at 2152 this past 04 December. Since then, Gold proceeded to settle the year yesterday (Friday) at 2072.
Opting to not forecast a high for 2023 was simply a function of “Who knows how high ‘twould go…” once the then existing 2089 All-Time High was eclipsed. To wit, you may recall our tongue-in-cheekedly leaving such prognostication to the “Fibonacci Extension Crowd”.
“So how is it any different this time for 2024, mmb?
Well, dear Squire, we’ve drawn upon our response to that which you herein queried a week ago. For this time ’round we’ve at least some historical guidance upon which to draw. To cut to the quick: we demonstrated last week that century-to-date whenever Gold has had a five-day run into Christmas of better than +1.0%, its average maximum price increase (as measured from the settle of the last trading day before Christmas) through the ensuing year is +23.9%. That average comes from seven qualifying occurrences during 2001 through 2022: and now for 2023 we’ve an eighth occurrence. Thus applying that +23.9% average maximum increase to Gold’s 2065 settle this past 22 December would bring 2557 during 2024.
However: because a) we fully comprehend that “average” is not “reality” and more importantly that b) cash management drives at least some degree of capital preservation (which for you WestPalmBeachers down there otherwise means “greed kills”), we’ve decided to lop off one standard deviation of that average, which then conservatively forecasts +15.0% above 2065 — thus 2375 — for 2024’s high. Anything beyond that is gravy. Thus from the “Sneak Preview Dept.” the above Gold Scoreboard now highlights next year’s high forecast, which upon being achieved shall be a beautiful thing.
Beautiful too is Gold’s having completed 2023 +13.2% to stand on the BEGOS Markets’ podium, second only to the S&P 500 +24.2%. (We’re considering from time-to-time re-christening the latter as the “Casino 500”, for clearly as this Investing Age of Stoopid continues to unfold, any consideration of earnings for price valuation has been summarily dismissed; more on that catastrophic catalyst later). But for the present, here are the Final BEGOS Markets Standings for 2023:
Save for the S&P, the most glaring out-of-sorts pairing therein is Gold’s firm performance versus Silver’s no performance (-0.6%). At year-end 2022, the Gold/Silver ratio was 75.7x; here at year-end 2023 ’tis 86.2x. The century-to-date average is now 67.9x, at which ratio (given Gold’s present 2072 level) means Silver instead of being 24.03 today would find it +21% higher at 30.50. So again for those of you scoring at home: do not forget the Silver! As for cellar dweller Oil (-11.4% in settling the year at 71.33): the percentage price of one barrel of “Black Gold” per one ounce of Gold is a wee 3.4%, the average this century being 6.8%. “Green” may be popularly great, but do not Oil underestimate.
Specific to our Gold, here are its weekly bars across the entirety of 2023, the present parabolic Long trend now 11 blue dots in duration. And in pointing toward more in 2024, we anticipate Golden fireworks galore:
Next we broaden the Gold perspective by bringing up the yellow metal’s year-over-year cumulative percentage track along with those of key precious metals’ equity brethren. Thus as measured from 28 December 2022 through 29 December 2023, we again have Gold itself leading the pack +14%, and then in descending turn: the VanEck Vectors Gold Miners exchange-traded fund (GDX) +8%, Agnico Eagle Mines (AEM) +5%, the Global X Silver Miners exchange-traded fund (SIL) -1%, Pan American Silver (PAAS) -2%, Newmont (NEM) -13%, and finally Franco-Nevada (FNV) -19%. So the bottom line here remains the ever-lagging nature of the equities:
As to how ’tis all really going comes the StateSide Economic Barometer. What we’ve gleaned from the FinMedia is, should you be seated on the left side of the aisle, the economy is doing fantastic; if instead on the right side, ’tis at best spastic. But because we do the math, the Econ Baro’s net negative bent appears rather drastic. Indeed, here’s a stat with which you shan’t be provided anywhere else: of the 590 incoming metrics for the Baro during 2023, 47% improved from period-to-period, 47% worsened, and 6% were static. (Per the performance by the prognosticators: 17% of the metrics met consensus estimates, 43% were better, and 40% were worse).
“So why then the ‘net negative bent’ as you put it, mmb?
Because, Squire, 30% of all period-to-period readings were then revised lower, whereas only 25% were revised higher, (leaving 45% unrevised). All-in-all, hardly fantastic, rather more spastic, and bent toward drastic:
‘Course, the red line accompanying the Baro is the afore-dubbed “Casino 500” (has a rather realistic ring, non?) The Big Roulette wheel through year-end is now 37 consecutive trading days “textbook overbought”, placing it in the 97th percentile of all such overbought conditions across the past 44 years. As for the aforementioned dismissal of earnings, our “live” price/earnings ratio finished the year at 46.3x: that is +82% above our first such reading of 25.4x in January 2013. Similarly from that same month, Bob Shiller’s CAPE has leapt +46% from 22.1x to now 32.3x, and the otherwise “broker-parroted” S&P/DJI version has expanded +53% from 17.3x to now 26.4x. The annualized all-risk “Casino 500” yield settled the year at 1.466% … the annualized no-risk U.S. three-month dough is at 5.180%. Or in quoting Roger Moore to Gloria Hendry: “Make your choice.” –[Live and Let Die, ’73]
Still, if living by the website’s Market Trends page, ’tis been hard to be wrong of late given the dying Dollar, the Buck having dumped -6.2% of its Index value high-to-low in the year’s final two months. Why, the Swiss Franc alone now costs more than $1.20 for the first time (save for its €uro-decoupling one-day spike on 15 January 2015) since 06 September 2011, (that date ringing a bell as ’twas Gold’s 1923 All-Time High which never again was breached until the noted 07 August 2020 date). But to the point: with the exception of Silver (sadly), the BEGOS Markets’ grey regression trendlines across the past 21 trading days are all in positive slant, the baby blue dots indicative of the consistency of those trends:
Then zooming in on the precious metals’ 10-day Market Profiles, Gold’s supremacy over Sister Silver is quite clear, the yellow metal settling the year above the Profile’s mid-point, whilst the white metal is below same. But you already know (courtesy of the “Dept. of Redundancy Dept.”) not to forget the Silver!
So to wrap with Gold this past month having recorded a new All-Time High at 2152 and it now being both month-end as well as year-end, here we’ve the defined Gold Structure chart through the past dozen years, now featuring 2024’s goal of 2375, (conservative, or otherwise):
In transiting through New Year, one wonders how much longer the S&P 500 can withstand trading at nearly double its earnings valuation and Gold at nearly half of its currency debasement valuation. Ours indeed is to reason why — to seek reversion — for at some point it shall be nigh. And historically, ’tis always arrived.
But now for the present, ’tis time to imbibe! Thus from the entire deMeadville crew, a most Golden New Year to All of You!
Santé !
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”): @deMeadvillePro
29 December 2023 – 09:17 Central Euro Time
Early on in the year’s final session we’ve at present the Swiss Franc, Gold and Copper above their respective Neutral Zones for today, whilst Silver is below same; volatility for the BEGOS Markets is light, with only the Swiss Franc having thus far exceeded 50% (now 56%) of its EDTR (see Market Ranges). By Market Trends, the “Baby Blues” for both the Bond and Spoo remain fairly glued to the ceiling. The S&P 500 (4783) is a day’s range from an all-time high (4819): despite the FinMedia rooting for such high, the Index obviously continues its fundamental trek as extremely overvalued by earnings (the “live” P/E now 46.7x), and the technical track is now 36 days (“textbook overbought”). The Econ Baro concludes its year with December’s Chi PMI. Gold appears firm in the upper 2000 handle: tomorrow’s 737th edition of The Gold Update gives our forecast high price for next year. Indeed: Happy New Year!
28 December 2023 – 09:41 Central Euro Time
The EuroCurrencies and Gold are at present above today’s Neutral Zones, whilst the Bond is below same; BEGOS Markets volatility is mostly light. The Swiss Franc is trading above 1.20 for the first time (save for its brief Euro-decoupling spike in January of 2015) since September of 2011. Gold is again teasing the 2100 level, the session high to this point being 2098: by Market Rhythms on a 10-test basis, various Gold studies populate the top of the consistency stack, notably for the 4hr, 6hr, 8hr and 12hr timeframes; and by Market Values, Gold (in real-time) is +51 points above its smooth valuation line. For the week’s light Econ Baro calendar, today’s metrics include Pending Home Sales for November.
27 December 2023 – 09:23 Central Euro Time
Both the Bond and Copper are at present above today’s Neutral Zones; the other BEGOS Markets all are within same, and volatility is again light. The S&P 500 is -44 points below its 4819 all-time high; the EDTR (see Market Ranges) for the Spoo is coincidentally 44 points; (for the S&P itself ’tis 38 points); the S&P is entering its 35th consecutive “textbook overbought” trading session, and the Spoo (in real-time) is +256 points above its smooth valuation line; (extreme too is the Bond now better than +7 points above same). The “live” P/E of the S&P is 46.3x and the yield 1.468% vs. 5.203% for three-month U.S. dough. By Market Trends, both Silver and Oil remain the only two components in 21-day linreg downtrends, albeit the latter’s “Baby Blues” are swiftly rising. Again the Econ Baro remains quiet until tomorrow.
26 December 2023 – 09:17 Central Euro Time
Into the shortened trading week we go with Gold at present above its Neutral Zone, as too are Silver, Copper and the Spoo; the balance of the BEGOS Markets are within same, and volatility is light. The Gold Update details an historically-based case for Gold to reach 2500 in the ensuing year. The S&P 500 looks to open higher toward entering its 34th consecutive trading day as “textbook oversold”; the “live” P/E adjusted to the futures is presently 45.7x. For tracking the Spoo, currently our best market rhythm for consistency (10-test basis) is the 8hr Moneyflow and (on a 24-test basis) the 15mn Parabolics. The Econ Baro has just three incoming metrics for this week, none due until Thursday.
The Gold Update: No. 736 – (23 December 2023) – “A Great Gift for Gold as It Climbs into Christmas”
The Gold Update by Mark Mead Baillie — 736th Edition — Monte-Carlo — 23 December 2023 (published each Saturday) — www.deMeadville.com
“A Great Gift for Gold as It Climbs into Christmas“
You likely shan’t glean this from anywhere else, so here we go. In this 23rd year of the 21st century, for these past five trading days leading up to Christmas, Gold recorded a net weekly gain of +1.5%, settling yesterday (Friday) at 2065. For the same five-day stint in past years, percentage gains of better than +1.0% have occurred seven times, which begs the question, courtesy of our good man Squire:
“So then, how well does Gold do the next year, mmb?
The answer is in the following gift box for Gold:
Therefore — at least historically so far this century — for the five-day run up to Christmas when price has netted a gain in excess of +1.0%, Gold’s “Average Maximum Gain” at some point through the end of the ensuing year is +23.9%, which from the present 2065 level suggests 2557 during 2024. ‘Twould be a welcome, healthy step toward the current Gold Scoreboard’s valuation level of 3703.
“But, mmb, that valuation has been over 4000 in past, no?
Yes it absolutely has, Squire. And ’tis based on Dollar debasement as mildly mitigated by the increase in the supply of Gold itself. But as many-an-astute reader here knows, the U.S. liquid money supply (“M2”) from 15 April 2022 through today has shrunk from $22.05T to now $20.71T (-6.1%) whilst total Gold tonnage has simultaneously increased from 206,942 to 211,537 (+2.2%). Such combined effect has thus been serving to reduce the Scoreboard’s valuation of Gold. ‘Course given — again historically — that Gold’s actual price has eventually reached up to prior high valuation levels, one has much to look forward to by holding/increasing one’s pile.
Piling up too is Gold’s price per the weekly bars from one year ago-to-date, the blue-dotted parabolic Long trend now 10 weeks in length. The Shorts (should there be any left following their having been all but obliterated two weeks ago) may see the rightmost few bars as “too high” above the positive dashed trendline, such as to warrant a ShortSide shot. But given our foregoing on price’s firm follow-though upon gains into Christmas, we instead are broadly focused on Gold looking well up into next year … and beyond!
Then from the “(Almost) Everything is Up Because the Dollar is Down Dept.” — which as you know from our purview is due to the FinMedia (the boss) already having instructed the Federal Reserve (the stooge) to cut rates — here we’ve the five primary BEGOS Markets’ respective percentage tracks from one month ago (21 trading days)-to-date. The Bond having been left for dead in October is clearly the winner whilst in the basement obviously is Oil as in mere years it shan’t be used any more. “These food containers made out of wind are really cool!” But we digress… Here’s the graphic:
Blown down on balance certainly since October, albeit having lately garnered a bounce, is the Economic Barometer. But did you catch on Thursday the Conference Board’s lagging indicator called “Leading Indicators” for November? -0.5%, (no surprise as the Econ Baro is always leading such report). Slipping too were the month’s New Home Sales, December’s Philly Fed Index (which has scored only two positive readings across the last 19 months), and Q3’s Gross Dometic Product getting finalized down a few pips.
Still, Personal Income and Spending both increased their paces during November, and the month’s so-called “Fed-Favoured” Core Personal Consumption Expenditures Index came in again at just a +0.1% pace. The latter’s 12-month summation is +3.2%, the lowest since that as of April 2021. Indeed for the Baro’s significant collection of 17 metrics this past week, 10 improved period-over-period. Thus we’ve this:
And therein note ole St. Nick pointing down at the top of the S&P. We’ve documented beyond ad nauseam the bazillion reasons for a major S&P correction, (e.g. “Stocks Suicide Mission” from just a week ago). Further, we witnessed on Wednesday (as tweeted @deMeadvillePro) a microcosm of how swiftly it can go. From Friday (15 December) into Wednesday (20 December) the S&P 500 garnered three successive days of “higher highs” … then late-session Wednesday, those three days of gains were gone in just three hours. Deeper into the numbers: the pace at which stocks hit downside bids was nine times the pace they’d previously been hitting upside offers. That is a fear-filled, comparatively monstrous downside pace. True, it didn’t last long, and the S&P then rather messily tried to recover to close its week. But it shows us just how thin is the ice on which the S&P is now skating. Or to cue the popular Yes album from back in ’71: 
“Fragile” Oh yes, indeed:
We shan’t futher belabour the point of the unconscionably high S&P other than to (yet again) say: the current “live” P/E is 45.6 (nearly double that of a decade ago); the market cap is $41.6T … the money supply is $20.7T; the yield is 1.479% (all-risk) … for the U.S. T-Bill ’tis 5.208% (no-risk); and just in case you’re scoring at home, the Index is now 33 consecutive trading days “textbook overbought”.
(Oh, and this too on the off notion that for some silly reason you don’t have protective stops in place: first S&P futures “limit down” is -7%, then -13%, then -20% … all on the same day).
Funny how through these recent years, broadly speaking the S&P (given unsupportive earnings) trades at double its value whereas Gold (given currency debasement) trades at half its value. ‘Course, we’ll see who laughs last upon “means reversion”.
As to the “now”, here next is our two-panel display of Gold’s daily bars from three months ago-to-date on the left along with the 10-day Market Profile on the right. ‘Twould appear Gold’s baby blue dots of trend consistency are nearly halting their fall; and in the Profile, present price appears protected by the 2048 level:
As for the same drill with Silver, her “Baby Blues” (at left) need to apply a bit more brake pressure, with her Profile (at right) indicative of trading support at 24.40 just below her 24.47 weekly settle. “Hold that line”, Sister Silver!
Thus there we are with but four trading days remaining in 2023. And as entitled, Gold’s pre-Chirstmas five-day gain at least by historical comparison is a great gift for the yellow metal going into next year. ‘Course, next week we’ll be here with our wrap for the year and as to how 2024 may well appear.
So with a tip of the cap to our IT crew for voluntarily creating this lovely card from us…
…as they say ’round these parts: “Joyeux Noël !” And give the gift of Gold!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”): @deMeadvillePro
22 December 2023 – 09:57 Central Euro Time
Oil is the only BEGOS Market at present outside (above) its Neutral Zone for today; session volatility is light. By Market Trends, six of the eight components are in 21-day linreg uptrends components, (the two downtrends being for Silver and Oil). Per Market Rhythms, our most consistent on a 10-test is Gold’s 8hr MACD whilst on a 24-test basis ’tis the Yen’s (not yet a BEGOS Market) 2hr MACD. The Econ Baro concludes its busy week with November’s Personal Income/Spending, “Fed-favoured” Core PCE, Durable Orders, New Homes Sales, and revision to December’s UofM Sentiment Survery. Merry Christmas to everyone everywhere!
21 December 2023 – 18:04 Central Euro Time
Apologies, we just noted that this morning’s post obviously didn’t “make the trip”. The thrust therein was the S&P 500 yesterday giving up the prior three days’ gains in just three hours. The Index is trying to firm today, but is coming off as we type. Still, save for the Bond and Oil, the balance of the other six BEGOS Markets are higher today. The Econ Baro took a dip today on weakness in Jobless claims, Q3 GDP revision, Philly Fed and Leading Indicataors.
20 December 2023 – 09:10 Central Euro Time
Both the Bond and Copper are at present above today’s Neutral Zones; below same is the Euro, and volatility is quite light, the largest EDTR (see Market Ranges) to this point being that of the Euro at 48%. Going ’round the Market Values horn of the five primary BEGOS Markets (in real-time): the Bond is better than +8 points “high” above its smooth valuation line, the Euro less than +0.01 points “high”, Gold +38 points “high”, Oil -3.24 points “low”, and the Spoo +298 points “high”, the Index itself having recorded its 30th consecutive trading day as “textbook overbought”. For the Econ Baro we’ve December’s Consumer Confidence, November’s Existing Home Sales and Q3’s Current Account Deficit. –> We sadly learned yesterday of the passing of Bob “MeBob” Falk, a fine and well-known trading colleague over many years as far back as the 1990s at Avid Trader. He shall be missed, and we extend our sincere condolences to his entire family.
19 December 2023 – 09:38 Central Euro Time
At present we’ve the Bond, Euro and Copper above today’s Neutral Zones; the other BEGOS Markets are within same, and volatility remains light, (save for non-BEGOS Yen which already has traced 121% of its EDTR [see Market Ranges for the BEGOS components]). At Market Ranges we continue to watch for the Bond’s “Baby Blues” to let go to the downside: however, they’ve remained pasted to the ceiling for better than a full month as price continues to rise. The “live” P/E of the S&P 500 (fut’s-adj’d) is 45.8x and the Index’s “textbook oversold” condition now enters its 30th consecutive trading day. The Econ Baro looks to Novembers’ Housing Starts/Permits.
18 December 2023 – 08:59 Central Euro Time
Both the Euro and Spoo are at present above their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is again light. The Gold Update emphasizes the dangerously high level of the S&P 500 by a whole host of measures; whereas Gold itself whilst weathering some post All-Time-High pullback nonetheless remains in a more broadly bullish stance. At Market Rhythms, the most consistent on a 10-test basis is Gold’s 8hr MACD, and a 24-test basis the Yen’s (not yet an official BEGOS Market) 2hr MACD. The Econ Baro begins its busy week (17 incoming metrics!) with December’s NAHB Housing Index.
The Gold Update: No. 735 – (16 December 2023) – “Gold’s Upside Fruition; Stocks’ Suicide Mission”
The Gold Update by Mark Mead Baillie — 735th Edition — Monte-Carlo — 16 December 2023 (published each Saturday) — www.deMeadville.com
“Gold’s Upside Fruition; Stocks’ Suicide Mission“
Yes, ’tis The Gold Update, but we’re compelled (as occasionally is our wont) to start with stocks’ suicide mission, given Gold in upside fruition (albeit still vastly undervalued) is doing just fine, thank you very much.
What is with this stock market, eh? As a great friend (with a long stint at basically the very top of a household-name investment bank … but we’ll maintain anonymity in this case) here recently remarked: “The stupidest people on Wall Street are the pension fund managers.”
Ya think? Pros and rubes alike are throwing money like Pavlov’s drooling dogs on steroids into an S&P 500 index that is so beyond overvalued, further adjectives escape us. ‘Course as we’ve tweeted (@deMeadvillePro): mind the website’s S&P 500 MoneyFlow page to assess if the buying actually has substance.
Still, we hear that apps with names like “Robinhood” allow for incredibly easy stock market access such that everyone’s gonna keep on buying and thus stocks shall only go even higher. To us that sounds more like being “robbed in the hood” as when the selling starts, the compounding of such shall overwhelm anything Wall Street and the World have ever seen. Because as you regular readers know: “The money isn’t there.”
By the numbers:
- A dozen years ago in 2011, the market capitalization of the S&P 500 exceeded the U.S. liquid “M2” Money Supply by +29%; as of yesterday, that excess is +100%, the market cap now $41.3T versus an M2 of but $20.7T. (Wanna cause The Crash? Fax that last sentence over to CNBS for all the rubes watching their boob tubes).
- Per yesterday’s (Friday’s) S&P settle at 4719, ’tis precisely -100 points (or just -2.1%) below the all-time intraday high of 4819 set on 04 Janaury 2022; the current “expected daily trading range” for the S&P is now 34 points, meaning a new all-time high can be reached within 3 trading days, just in time for Christmas.
- The number of consecutive trading days the S&P has been “textbook overbought” (a 44-year concoction of John Bollinger’s Bands, along with Relative Strength and Stochastics) is now 28 which is in the 93rd percentile of all such overbought conditions since the year 1980.
- Present all-risk S&P 500 annualized dividend yield: 1.475%. Present no-risk U.S. 3-Month annualized T-Bill yield: 5.225%. (Why is this so hard to grasp?) “Because, mmb, T-Bills aren’t gonna double in price…” Just like stock’s can’t get halved, eh Squire? (‘Preciate the tee-up).
- The “live” price/earnings ratio of the S&P settled the week at 44.9x; that is essentially double the 66-year average P/E of 22.8x (Shiller “CAPE” into deMeadville post-2012) and +77% up from when our “live” deMeadville version was instituted those 11 years ago at 25.4x:
- Next, too, we’ve the S&P’s 50-year regression channel as plotted from 1973 up to COVID (the red vertical line) from which the channel’s trend is extended-to-date, suggesting the S&P “ought” today be at best sub-3000 rather than the current 4719:
By the numbers indeed, the most daunting being lack of price-supportive earnings — and far worse — the lack of money when it all goes wrong.
The good news is: irrespective of the S&P’s ominous (understatement) overvaluation, the market is never wrong. The bad news is: the market always reverts to its broadest measures of mean. And should your use your trusty Pickett slide rule to do such reversion math, an S&P “correction” of -50% wouldn’t be untoward a wit. We merely await the FinMedia coming up with the catalyst, of which there are a multitude from which to choose, (see our 09 July missive that cited “Stocks’ 10 Crash Catalysts”), or to quote Bill Cowper from away back in 1785: “Variety is the spice of life”. And our sense remains “Look Ma! No Money!” shall be the ultimate crash driver. The Federal Reserve can then double the money supply to cover what the investment banks cannot credit to you after having sold your stock, the price of Gold at least doubles beyond where it already “ought” be (see the opening Gold Scoreboard), and on we go.
And thus to Gold let’s Go! In settling this past week at 2034, Gold is -118 points below its 04 December All-Time High of 2152. Regardless, price just completed its fourth up week of the last five, such fruition from the foresight to be “in” rather than face being fried upon stocks’ suicide. Here we’ve Gold’s weekly bars from one year ago-to-date, the current parabolic Long trend now nine weeks in duration. But don’t worry, should you deem that as too long: the longest such Long trend this century lasted 26 weeks back in 2005, which was preceded by a like 25-week stint in 2004 and later by a 24-week run in 2019. In fact from the year 2001-to-date, Gold has recorded eight parabolic Long trends of 20 or more weeks. Which is why we say: “When Gold goes, it Goes!” To the graphic with Sly we go:
But wait, there’s more: for can the Economic Barometer also go higher? Hat-tip Media Research Center in canvassing ABC News to discover that we’re wrong, for President Biden’s economy “is really wonderful” … even as the StateSide Treasury Deficit for November alone rocketed +26% “on higher interest costs”. Do we again cue BTO’s “You Ain’t Seen Nothing Yet” –[’73]? How about the month’s core retail inflation increasing from a +0.2% clip in October to now +0.3%? Fortunately favouring the Fed’s rate cut musings, the New York State Empire Index faceplanted from November’s +9.1 reading to -14.5 for December: “Smunch!” Here’s the Econ Baro representing the whole bunch:
All-in-all as to when to cut its Funds rate, the Fed now awaits the go-ahead from the FinMedia, (given the recent paradigm in which they oversee the Fed). And yet, credit still is due November’s Retail Sales with a month-over-month whirl-round from -0.1% to +0.3% whilst Industrial Production similarly got going from October’s -0.6% sag to bag +0.2% for November.
Meanwhile countering Gold’s post-All-Time-High price drag, both precious metals have resumed showing some swag. Below we’ve the two-panel graphic of daily bars across the past three-months-to- date for Gold on the left and for Silver on the right. To be sure, the baby blue dots of the yellow metal’s trend consistency are still slipping, but with less acceleration, whilst those for the white metal have at least paused their fall. And of course, the broader three-month trend across both panels is obviously up:
Then too we’ve the 10-day Market Profiles for Gold (below left) and for Silver (below right). Despite Gold’s 164-point trading range these last two weeks, clearly the home of trading volume price consensus is right there at 2047. And in Silver’s case, same is her 24.15-24.45 zone:
Time we go to wrap with:
The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3704
Gold’s All-Time Intra-Day High: 2152 (04 December 2023)
2023’s High: 2152 (04 December)
Gold’s All-Time Closing High: 2092 (01 December 2023)
The 2000’s Triple-Top: 2089 (07 Aug ’20); 2079 (08 Mar ’22); 2085 (04 May ’23)
Trading Resistance: 2047 / 2087 / 2016
10-Session “volume-weighted” average price magnet: 2042
Gold Currently: 2034, (expected daily trading range [“EDTR”]: 33 points)
Trading Support: 2021 / 2012 / 1997
10-Session directional range: down to 1988 (from 2152) = -164 points or -7.6%
The Weekly Parabolic Price to flip Short: 1917
The 300-Day Moving Average: 1909 and rising
The Gateway to 2000: 1900+
2023’s Low: 1811 (28 February)
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
And please do not fall afoul of the following … ’tis coming:
Go with your Gold!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”): @deMeadvillePro
15 December 2023 – 09:29 Central Euro Time
The Euro is at present below today’s Neutral Zone whilst above same are both Copper and the Spoo; BEGOS Markets volatility is mostly light. The S&P 500 looks to open at about 4730, some -90 points below the all-time high (4819); the “live” P/E (fut’s-adj’d) is now 45.0x. ‘Tis volume rollover today from December to March for the EuroCurrencies. Looking at Market Values for the five primary BEGOS components: the Bond shows as nearly 9 points “high” above the smooth valuation line; the Euro is about -0.01 points “low”; Gold is +47 points “high”; Oil is -7 points “low”, and the Spoo is (deep breath) +310 points “high”. The Econ Baro wraps its week with December’s NY State Empire Index along with November’s IndProd/CapUtil.
14 December 2023 – 09:07 Central Euro Time
The Bond, Copper and Spoo are at present above today’s Neutral Zones; the other BEGOS Markets are within same, and volatility is moderate. Yesterday’s S&P 500 rally again did not have full MoneyFlow support (Index +1.4% vs. Flow +1.0%); too the S&P is now quite frothy as the Flow factor to move the S&P by 1 point is notably diminishing. Gold’s firm up push yesterday moved our top three Market Rhythms for consistency (10-test basis) as follows (all for Gold): the 12hr Parabolics, 6hr Price Oscillator and same study for 4hr. Oil’s cac volume is moving from January into that for February. The Econ Baro looks to November’s Retail Sales and Ex/Im Prices, plus October’s Business Inventories.
13 December 2023 – 09:13 Central Euro Time
The Bond at present is above today’s Neutral Zone; both Copper and Oil are below same, and BEGOS Markets volatility is again light with the FOMC’s Policy Statement in the balance. The S&P 500 completed its 25th consecutive trading day as “textbook overbought”; the “live” P/E (futs-adj’d) is 44.5x; at 4644, the Index stands -174 points (-3.8%) below its 4819 all-time high (04 January 2022); the Spoo (including the recent +55 points of fresh March premium) is nonetheless +260 points above its smooth valuation line (see Market Values). Ahead of the Fed comes November’s wholesale inflation per the PPI.
12 December 2023 – 09:03 Central Euro Time
We’ve strength this morning in the Bond and EuroCurrencies, with session volatility notably light, save for the Swiss Franc having already traced 53% of its EDTR (see Market Ranges). Both the Swiss Franc and Gold confirmed their “Baby Blues” (see Market Trends) slipping below their +80% axes, suggestive of still lower prices near-term. Despite yesterday’s +0.4% rise in the S&P 500, its MoneyFlow (regressed into S&P points) fell -0.8%, reflected in the developing negative slant we’re seeing at the MoneyFlow page; too, the Index is now “textbook overbought” through the past 24 trading days. The Econ Baro awaits November’s CPI and Treasury Budget.
11 December 2023 – 09:08 Central Euro Time
Save for Oil (+0.6% at 71.67), the other seven BEGOS Markets are all at present in the red; session volatility is light. The Gold Update sees safe downside for the yellow metal toward 1975 without causing any concern for the overall uptrend(s); still by Market Trends, Gold’s “Baby Blues” are in real-time dropping below their key +80 axis, warranting a price move sub-2000. Of greater concern is misfortune in the making for the S&P which remains inanely overextended both fundamentally (unsupportive earnings) and technically (beyond “overbought”). Spoo volume today is rolling from the December cac into that for March, with an additional +52 points of fresh premium. The Econ Baro is quiet, albeit with an ample load of metrics as the balance of the week unfolds.
The Gold Update: No. 734 – (09 December 2023) – “Gold-Record’s Calamity; Stocks’ Stark Misfortune-to-Be”
The Gold Update by Mark Mead Baillie — 734th Edition — Monte-Carlo — 09 December 2023 (published each Saturday) — www.deMeadville.com
“Gold-Record’s Calamity; Stocks’ Stark Misfortune-to-Be“
British Prime Minister (1874-1880) Benjamin Disraeli is infamously quoted in reference to the leader of Parliament’s Opposition: “If Gladstone fell into the Thames, that would be a misfortune; and if anybody pulled him out, that, I suppose, would be a calamity.”
And whilst misfortune for the stock market is well overdue to ensue, with respect to Gold, calamity is descriptively apropos following the second consecutive daily record high of 2152 achieved this past Monday (04 December) … following which it all went a bit wobbly, price settling out the week yesterday (Friday) at 2021.
To be sure, a week ago we acknowledged Gold’s “Finally!” having recorded a fresh All-Time High of 2096 on 01 December, a milestone comprehensively missed by the FinMedia. A watchful reader even wrote to us: “Nothing in Barron’s or WSJ…” But then herein penned last week “…new highs in major financial markets tend to draw in the “mo-mo” crowd…” and in turn, Gold on Monday left no doubt in shredding the Shorts all the way up to 2152. ‘Twas a beautiful thing, albeit then came calamity as highlighted here:
However: let’s couch calamity in context. Oh yes, this past Monday’s reversal of -114 points from 2152-to-2038 across just 16 hours ranked as Gold’s fifth-worst same-day high-to-low points plunge century-to-date; but by percentage, such -5.3% intra-day drop ranked only 34th-worst. Which for you WestPalmBeachers down there means the prior 33 even worse same-day percentage drops all eventually led to All-Time Highs for Gold, (i.e. the trend is your friend given Gold eventually goes all the way back up — and then some — as we just saw.)
Further, Gold’s dominant trends all remain up: that includes the key 21-day linear regression trend, and as we below see both the year-over-year dashed regression trend along with the rightmost weekly blue-dotted parabolic Long trend, now a healthy eight weeks in duration and accelerating upward:
“But Silver took quite a hit, eh mmb?”
‘Twas the case, Squire. Gold’s net fall for the week of -3.4% pales in comparison to Silver’s net -9.9% weekly shellacking, her worst since that ending 14 October 2022. This in turn blasted the Gold/Silver ratio from 80.8x just a week ago up to now 86.8x. Fortunately, Sister Silver still has plenty of weekly parabolic Long trend cushion beneath her, present price being 23.29 vs. the flip-to-Short level now 21.07.
Speaking of taking a hit, you regular readers and website followers have witnessed that taken of late by the Economic Barometer. So much so that the now-defunct Funkin’ Waggnalls might have defined “straight down” as “The Econ Baro”.
But the Baro did get a bit of a boost on Friday from better payrolls data for November: net job creation beat both “expectations” as well as the October increase; the pace of Hourly Earnings doubled from +0.2% to +0.4%; the Average Workweek grew; and the Unemployment Rate fell by -0.2% from 3.9% to 3.7%.
Now a month-over-month drop of -0.2% in Unemployment may not seem like much, but ’twas the second-best monthly improvement since the April 2022 reading. ‘Course the ADP Employment data actually worsened for November, (but Labor’s data survey is better, depending upon “who’s in office”, right?). Then how about that University of Michigan “Go Blue!” Sentiment Survey: from November’s 61.3 to 69.4 for December! And The Wolverines are ranked Number One in StateSide collegiate football! How great a picture is this? (Well, maybe not…). We’ll see what the Federal Reserve’s Open Market Committee has to say next Wednesday (13 December):
Thus we’ve covered calamity following Gold’s record high — and to an ongoing extent — same for the above Econ Baro. But what about (as entitled) misfortune-to-be for the stock market? After all the FinMedia appears all-in for an S&P 500 record high (above 4819 vs. the current 4608 level). To wit, Dow Jones Newswires just reported “The VIX says stocks are ‘reliably in a bull market’ heading into 2024…” So clearly no one has done the math as to the stock market’s usual demise when the VIX is this low (12.35 at Friday’s settle). And yet by the website’s S&P 500 menu, we’ve still yet to see any true “fear” in the MoneyFlow, even as we tweeted so (@deMeadvillePro) this past Tuesday.
Further, we’ve herein on occasion enumerated a number of factors continuing to be present for it all to go wrong for stocks, notably the ongoing lack of earnings support. Yet as a long-time reader wrote in this past week: “It hasn’t been about EPS for a long time. It’s all about stock price.” And we comprehensively agree. That is because “It’s different this time” … just as ’tis always been different prior to every one of the stock market’s true crashes; (e.g. in our lifetime: 27 August 1987, 24 March 2000, 11 October 2007, and 19 February 2020, not to mention the myriad of other double-digit “corrections” therein). Imagine the 38 roulette slots (or 37 here in Europe) having their numbers replaced with S&P 500 constituent symbols. “Half on NVDA and half on AMZN!” … “Le jeux sont FAIT, Monsieur, rien ne va PLUS!” That’s where we are today.
Not to belabour the point, but we have a question. What are companies such as Advanced Micro Devices (AMD, p/e 1,003.3x), Ceridian HCM (CDAY, p/e 2,593.4x), Ventas (VTR, p/e 3,593.8x) et alia even doing in the S&P 500? How about the Index’s 34 constituents not even making money? Reprise the late, great Vince Lombardi: “What the hell’s goin’ on out there?!?!?” (Friendly reminder: US liquid Money Supply [“M2”] now $20.7T; S&P 500 market capitalization now $40.2T; have a nice day).
Stark misfortune-to-be, indeed. By any historical yardstick, the is S&P is so significantly overstretched ’tis stunning that it hasn’t yet steeply succumbed. But until it does — and ’twill — as is our wont to say, the Investing Age of Stoopid merrily rolls on its way.
Meanwhile not so merrily rolling downward this past week were the precious metals. First to Gold’s two-panel graphic of the daily bars from three months ago-to-date on the left and 10-day Market Profile on the right. Earlier we mentioned Gold’s key 21-day linear regression trend as being up, which ’tis; however, its baby blue dots of trend “consistency” are just now kinking over to the downside, suggestive of still lower prices near term. Yet by pricing structure, we don’t see too much further damage beyond the present 2021 level down to 1975. But by the Profile for now, the mid-2040s clearly show as trading volume resistance:
Similar is Silver’s two-panel slate. Her “Baby Blues” (at left) already have departed below their key +80% axis; price presently as noted at 23.29, her safety support structure ranges from 23.88 down to 21.93. ‘Course by her Profile (at right), Sister Silver hardly is the happiest camper:
We’ll close it here with another FinMedia bemusement. The once-mighty now ratings-floundering CNN ran on Gold’s record-high Monday with: “Gold has never been this expensive.” With all due respect to the network’s writers and editorial staff, Gold remains extraordinarily cheap. “Expensive” was back in 2011 when Gold’s price growth was outpacing U.S. Dollar debasement, (recall our then writing about “Gold having gotten ahead of itself”). But for the chump news-droolers out there, the price of Gold last Monday reached its highest level ever at 2152 … yet valued today at 3705, Gold is cheap! What’s inanely “expensive” (understatement) is the stock market. And thus we wrap with this favourite graphic:
Stay with your Gold!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”): @deMeadvillePro
08 December 2023 – 09:12 Central Euro Time
‘Tis StateSide November Payrolls day for the Econ Baro, and at present seven of the eight BEGOS Markets are within their Neutral Zones, the only outlier being Oil above same; the latter appears trying to firm ’round the 70 handle. Session volatility is light, (except again for the non-BEGOS component Yen which has traced 119% of its EDTR as the BOJ interest rate play continues). The S&P 500 is now “textbook overbought” through the past 22 trading days and the “live” P/E is 43.3x; however, the recent MoneyFlow deterioration has (for the moment) righted itself, indicative of money being thrown at a terrifically expensive stock market. In addition to jobs data, the Baro also looks to December’s UofM Sentiment Survey.
07 December 2023 – 09:11 Central Euro Time
The Bond is at present below its Neutral Zone for today, whilst above same is Copper; BEGOS Markets volatility is again mostly light with the non-BEGOS exception of the Yen which already has traced 145% of its EDTR (see Market Ranges for the standard BEGOS components). Gold has calmed from its wild Monday ride: currently 2047, by the Market Profile we’ve resistance notably in the 2062-2065 zone, with supports right round current price, plus at 2036-2034, 2023 and 2014. A day ahead of Payrolls data for the Econ Baro, today’s metrics include October’s Wholesale Inventories and Consumer Credit.
06 December 2023 – 09:13 Central Euro Time
Gold, Copper and the Spoo are at present above today’s Neutral Zones; the other BEGOS Markets are within same, and volatility is mostly light. Going ’round the horn for the five primary BEGOS components at Market Values, we’ve (in real-time): the Bond +6.5 points “high” above its smooth its smooth valuation line, the Euro “in line”, Gold +57 points “high”, Oil -9.5 points “low” and the Spoo +206 points “high”. The S&P 500 is now “textbook overbought” through the last 20 trading days; the “live” P/E is 42.3x. For the Econ Baro we’ve November’s ADP Employment data, October’s Trade Deficit, and the revision to Q3’s Productivity and Unit Labor Costs.
05 December 2023 – 08:59 Central Euro Time
After achieving an All-Time High yesterday at 2152, Gold’s subsequent -113 intraday points drop ranks 5th-worst century-to-date; however the -5.3% drop ranks just 34th worst intraday. At present, the Euro, Copper and Spoo are below today’s Neutral Zones; none of the other BEGOS Markets are above same, and volatility has returned to mostly light. Our most consistent Market Rhythm at present (10-test swing basis) is Gold’s 4hr Price Oscillator. As anticipated, the Euro’s “Baby Blues” (see Market Trends) confirmed falling below the key +80% axis, indicative of lower prices near-term. And the Econ Baro looks to November’s ISM(Svc) Index.
04 December 2023 – 09:12 Central Euro Time
After setting an All-Time High on Friday (to 2096, settle 2092), Gold spiked overnight some +50 points, only to since return below Friday’s settle. At present ’tis red across the board for all eight BEGOS Markets, and volatility is robust. More details on to where the yellow metal can go near-to-medium term in The Gold Update, (which too outlines the case for an S&P “crash”). Note at the website the S&P 500 Moneyflow differential beginning to weaken, oft a precursor to lower price levels. Due for the Econ Baro is October’s Factory Orders.
The Gold Update: No. 733 – (02 December 2023) – “Gold: Finally!”
The Gold Update by Mark Mead Baillie — 733rd Edition — Monte-Carlo — 02 December 2023 (published each Saturday) — www.deMeadville.com
“Gold: Finally!“
If you caught last Tuesday’s tweet (@deMeadvillePro, Gold then 2042) you saw where this was going: “Santa clearly is contemplating a new all-time Gold high by Christmas. ‘Twould be 2075 spot a/o 2089 FebFuts. (On verra…)”
And so for Gold, as the expression goes, “Santa came early this year.” In settling the week yesterday (Friday) at 2092, February Gold (the current “front month”) en route traded to as high as 2096, +7 points above the prior “front month” 2089 All-Time High that had been in place since 07 August 2020. Spot Gold, too, exceeded its prior All-Time High of 2074 in trading as high as 2076. Finally! ‘Tis a beautiful thing.
‘Course, you astute readers of The Gold Update fully realize that this year we did not forecast a specific high price, (which for you WestPalmBeachers down there is why the above Gold Scoreboard has stated “No Forecast” throughout 2023). Nonetheless, early in the year we expressed our anticipation of Gold by year-end at least achieving a new All-Time High: “Whoomp! (There It Is)” –[Tag Team, ’93]
To wit, as herein penned back on New Year’s Day: “…how do we forecast a high for 2023? Linearly we don’t … as for uncharted territory above Gold’s All-Time High (2089 of 07 August 2020) that’s for the Fibonacci-obsessed.”
True, we from time-to-time dabble in “fib retracement” for establishing trading targets. However, we avoid the Sybilistic art of future “fib extension”: for us ’tis too Timothy Leary, to whom President Nixon in ’70 purportedly referred as “the most dangerous man in America”, (only to then to nix the Gold standard a year later). That from the “Now Look Who’s Talkin’ Dept.” … but we digress.
Given Gold’s fresh All-Time High is finally in hand, let’s take a realistic crack at “How high from here?” for the yellow metal. After all, new highs in major financial markets tend to draw in the “mo-mo” crowd, albeit for Gold, its notorious triple top across the past three years ain’t drawn squat. And let’s be honest: Gold’s new high at present is marginal at best.
“But it’s only been one day, mmb…”
‘Twouldn’t be a landmark missive without our beloved Squire. Still, such marginal high can cue the Gold Shorts, which from the “Party Pooper Dept.” may swiftly remind us that following the aforementioned 2089 high came the 2079 high on 08 March 2022 and then the 2085 high this past 04 May. Thus in the Shorts’ words, “There’s nothing to see here” in their anticipation of it again all going wrong for Gold.
Yet as we’ve oft quipped of late, “triple tops are meant to be broken”. And marginally or otherwise, that just happened. Moreover as herein penned one week ago regarding December’s monthly net changes: “…the last six [have been]: +2.6%, +4.5%, +3.4%, +6.4%, +2.9% and +3.8% from 2017 through 2022 respectively…” That is an average net December change of +3.9%, which from November’s 2056 futures settle would bring 2136 by New Year.
But wait, there’s optimistically more. Century-to-date Gold has recorded 5,767 trading days, 252 of which have elicited All-Time Highs. Now obviously it doesn’t “feel” like Gold averages a new high every 23 trading days: indeed therein the standard deviation is 155 days, the longest stint between All-Time Highs being 2,237 days from 06 September 2011 to 27 July 2020 (whew!) even as the U.S. Money Supply (“M2”) simultaneously increased +90.2% (whoa!)
Nevertheless to our point: for those 252 All-Time High days, the average maximum increase in the price of Gold within the enusing three months is +8.9%; or if you prefer, the median maximum price increase is +7.9%. Either way, “in that vacuum” from the present 2092 level would put Gold in the 2257-2278 range by February’s end, (just in case you’re scoring at home). ‘Course, hardly is “average” reality, but it at least gives us some measure of reasonable upside guidance for Gold through these next three months.
Of greater import however is that Gold’s new high remains peanuts vis-à-vis its currency debasement valuation, depicted in the opening Scoreboard as now 3707, i.e. +77% above here, even accounting for the increase in the supply of Gold itself. Which got us to question: how long does it typically take for the price of Gold to double? Here’s the answer from one price’s “century mark” to the next:
Thus discounting that most recent long 12.4-year stint, Gold from the year 2002 has doubled in value on average every 3.7 years, (inclusive of the above table’s overlapping periods). So to achieve that 3707 valuation level in four years’ time is not unrealistic a wit. Which of course begs another question: will there even be a U.S. Dollar in four years’ time? Our coy answer: ’tis oft said “Gold has been money for 5,000 years”; the disintegrating Federal Reserve Note just 109 years. Poof!
But there’s no poofing nor pooh-poohing Gold’s fresh All-Time High. To all those fellow “analysts” just some months ago calling for Gold Shorts down toward 1500-1100, here we are instead at 2092 per the following chart of Gold’s weekly bars and parabolic trends. So do not be that guy:
Neither let us forget Silver. Severely lagging Gold of late, Silver’s weekly parabolic trend only just confirmed flipping from Short to Long per yesterday’s 25.90 settle, (Gold’s Long trend having been in place now through seven weeks). And unlike Gold being at its All-Time High, Silver is -47.9% below her All-Time High of 49.82 established away back on 25 April 2011. Again: do not forget Sister Silver!
Looking ever more forgettable however is the StateSide Economic Barometer. It’s one-month (21 trading days) plunge from 02 November through yesterday is the most since 27 May 2022, following which the S&P 500 fell -11.8% from 4158 to 3667 in just 13 trading days. That being an exception, as we’ve otherwise acknowledged since COVID, the good news is the S&P no longer follows the Econ Baro, so again “There’s nothing to see here.” See for yourself:
Indeed, of the 49 metrics that have come into the Baro across the past 21 trading days, just 16 improved period-over-period. It thus appears the Fed is well enroute to successfully attaining its slow-growth goal … but given FedChair Powell’s commentary yesterday, they apparently don’t know it (yet).
As for the “we never go down” S&P 500, it has displaced Gold in leading the BEGOS Markets’ percentage changes year-to-date as we go to the standings with 11 months plus one trading day in the books; both the yellow and white metals round out the present podium:
And specific to the S&P 500, we wrote this past week to a fine friend and colleague as follows: “…S&P is ridiculously overbought and horribly overvalued … The set up [for a crash] clearly is there … but of course, ‘tis different this time (right?)…”
‘Tis ad nauseum for you regular readers, but we’ll keep pounding the table on this:
- The “live” P/E of the S&P per Friday’s close is 42.6x (don’t argue; do the math);
- The average “live” P/E of the top 50 cap-weighted S&P constituents is 52.6x;
- The S&P is now “textbook overbought” through 18 consecutive trading days;
- The S&P’s all-to-risk yield is 1.528%; that of the risk-free US three-month T-Bill is 5.215%;
- The Q3 S&P Earnings Season ranks only 12th of the past 26 for bottom-line improvement;
- The S&P “sans COVID” by 50-year regression would today be about 2900, not 4595.
Got stocks? Scary, really, really scary!
The exception of course is if you’ve precious metals’ stocks, the following graphic suggesting their being well undervalued vis-à-vis Gold itself, even as it too remains debasedly undervalued. Again it being month-end plus a day, here are the year-over-year percentage tracks of those key metals equities from worst-to-first: Franco-Nevada (FNV) -23%, Newmont (NEM) -13%, both Pan American Silver (PAAS) and the Global X Silver Miners exchange-traded fund (SIL) -1%, Agnico Eagle Mines (AEM) +8%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +10%, and Gold itself +17%. And in the perfect Equities/Gold leveraged world, Gold “ought be” the lowest rather than highest line on this graphic:
Got metals stocks? Merry, really, really merry!
Further, if you’ve been long any of the BEGOS Components across at least the past month — again save for Oil — the rising tide of inflation has been lifting all boats. Here we’ve their respective bars and diagonal trendlines for the past 21 trading days, the consistency of those trends as depicted by the baby blue dots. Note for the Euro the “Baby Blues” suggesting lower levels ahead:
Next we’ve the 10-day Market Profiles for record-high Gold on the left and Silver on the right. The denoted bars are those with the greatest volume-traded support from 17 November through yesterday:
Naturally it being month-end plus a December day, here is Gold’s Structure by the monthly bars for the past 12 years. And yes, Virginia, just as there is a Santa Claus, so too as noted are triple tops meant to be broken. Et voilà. Thus in turn Gold is at an“All Time High” –[Rita Coolidge, ’83]:
To wrap this rather epic edition of The Gold Update, “We have breaking news…”
“Bring it on, mmb…”
Thank you, Squire. Direct from the “We’re Completely Gobsmacked Dept.” here ’tis:
Last evening we were all eyes on Gold when at precisely 18:28 GMT price recorded the new All-Time High of 2089.3, surpassing 2089.2 which as you well-know had been in place as the prior high since 07 August 2020. Some three-and-one-half hours later at 22:00 GMT price settled also at an All-Time Closing High of 2091.7.
Curious as to how our FinMedia friends would portray this great event, we went to Bloomy’s home page, obviously expecting it to be the lead story. But it wasn’t there. Worse, it was no where to be found their home page! So we instead zoomed over to Dow Jones Newswires’ Marketwatch home page. It must be at the top, right? Wrong! Rather, the lead stories were on “The Dow”, “Bitcoin” and “GameStop”. Where is the Gold story? We enabled a MW home page search for “Gold”: first find was Goldman; second find was again Goldman; third find was “Gold” … buried deep down the page amongst the “click-bait” ads for chumps, with the barest of mention of the new high.
But we really and truly learned something from this: Gold now is of no material media importance whatsoever. Who cares, right? The sad part is: when they finally figure it out (upon everyone morphing from marked-to-market millionaires to marked-to-reality impoverisheds) ’twill be too late.
Still, perhaps the late Leary would have gotten it:
“But his was of the Acapulco type, mmb…”
Likely the case there, Squire. As for the real thing, ’tis at an All-Time High and yet it remains unspeakably undervalued. That’s really all you need to know.
Got Gold? Got Silver? Got a wealth-preserved Future!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”): @deMeadvillePro
01 December 2023 – 09:16 Central Euro Time
All eight BEGOS Markets are at present within their respective Neutral Zones for today, and volatility is light. Gold appears rather hesitant just below record-high territory: FedFuts are 2060; the record high is 2089; but by Market Values, price is (in real-time) +73 points above its smooth valuation line; still by Market Trends, Gold is firmly in an uptrend, the “Baby Blues” therein continuing to climb; again a comprehensive assessment in tomorrow’s Gold Update. The S&P 500 is now “textbook overbought” through 17 consecutive trading sessions: the “live” P/E is a futs-adj’d 43.0x. The Econ Baro concludes its week with November’s ISM(Mfg) Index and October’s Construction Spending.
30 November 2023 – 09:21 Central Euro Time
At present, just Copper is the only BEGOS Market outside (above) its Neutral Zone for today; volatility again is light-to-moderate. As tweeted (@deMeadvillePro) on Tuesday: “Santa clearly is contemplating a new all-time Gold high by Christmas. ‘Twould be 2075 spot a/o 2089 FebFuts. (On verra…)” Price since has reached 2073 (FebFuts); more in this coming Saturday edition of the Gold Update. Looking at Market Rhythms, the most consistent at present are (on a 10-test basis) the Yen’s (not yet an official BEGOS component) 1hr Price Oscillator and 2hr Moneyflow, and Gold’s 4hr Price Oscillator; on a 24-test basis we’ve the Yen’s 15mn MACD along with Gold’s 30mn MACD and 30mn Price Oscillator. ‘Tis a busy day for the Econ Baro, including November’s Chi PMI, plus October’s Pending Home Sales, Personal Income/Spending, and the “Fed-favoured” Core PCE Index.
29 November 2023 – 09:17 Central Euro Time
The Bond is the sole BEGOS Market at present outside (above) its Neutral Zone; session volatility is light-to-moderate. After flipping from Long-to-Short, the Bond’s daily parabolics whip-sawed back to Long: however, we’re minding the Bond’s “Baby Blues” (see Market Trends) for their breaking below the key +80% axis. Going ’round the Market Values horn for the primary BEGOS components, in real-time we’ve the Bond nearly +6 points “high” above the smooth valuation line, the Euro +0.0316 points “high”, Gold +64 points “high”, Oil -7.17 points “low”, and the Spoo a whopping +253 points “high”. The Econ Baro awaits the second peek at Q3 GDP. And late in the session comes the Fed’s Tan Tome.
28 November 2023 – 09:15 Central Euro Time
All eight BEGOS Markets are at present within their respective Neutral Zones for today; session volatility is light. Gold’s cac volume is rolling from December into February, with +20 points of premium; other rollovers in process include Silver, Copper and the Bond, all from December into March. As anticipated, the Bond’s “Baby Blues” (see Market Trends) are teasing their +80% axis: confirmation below that level is suggestive of weaker prices near-term; too, the Bond’s daily Parabolics confirmed flipping from Long to Short effective today’s open. For the Econ Baro we’ve November’s Consumer Confidence.
27 November 2023 – 09:17 Central Euro Time
Both Gold and Silver are at present above today’s Neutral Zones: the white metal, (which has been lagging Gold’s performance), has provisionally flipped its weekly parabolic from Short to Long; confirmation should come at next Friday’s settle. The Spoo is at present below its Neutral Zone. And BEGOS Markets volatility is again moderate. The “textbook overbought” streak of the S&P itself is now through 13 sessions. The Gold Update (brief as planned) is price-bullish, especially given the yellow metal having recorded net gains for the six past Decembers. The Econ Baro starts a week of 12 incoming metrics with October’s New Home Sales.
The Gold Update: No. 732 – (25 November 2023) – “Basking Under Gold”
The Gold Update by Mark Mead Baillie — 732nd Edition — Cortona — 25 November 2023 (published each Saturday) — www.deMeadville.com
“Basking Under Gold“
Greetings from under the Tuscan sun. Here in Cortona, recorded history dates all the way back to the Etruscans in the 8th century BC, (which for you WestPalmBeachers down there is some 2,900 years ago). And in those days, Gold was employed in wire form toward implanting teeth as “dentures” from animals into those locals having lost same. ‘Course, ‘twould not be until 1252 AD that Gold as an internationally-recognized currency would appear, namely as the fiorino (or Golden Florin), following which (dare we say) “the rest is history”.
As for the rest of this week’s edition of The Gold Update, as noted in the prior wrap ’twill be brief given our being in motion: “… just straight to the point with a salient graphic or two along with our view…” And what we’re viewing for Gold looks quite positive as we go to its weekly bars from one year ago-to-date:
Through Gold’s 47 trading weeks so far in 2023, yesterday’s (Friday’s) closing price of 2004 ranks as the year’s sixth-highest weekly settle. However, the sticky area across the five better settles is the tight price range of 2016-2025. Thus the Gold Short may smugly say: “We’ve been here before, so there ain’t no more.”
Regardless, given Gold’s weekly trading range now being 53 points, ‘twouldn’t be untoward to find Gold reach 2057 within one week’s time. Again, any weekly close above 2025 would be ample territory to then test the year’s 2085 high (04 May ’23), and further the All-Time 2089 High (07 August ’20): the latter is just +4.2% above today’s 2004 level.
Moreover in looking toward next month, 26 of the past 48 Decembers have been net positive for Gold, including each of the last six: +2.6%, +4.5%, +3.4%, +6.4%, +2.9% and +3.8% from 2017 through 2022 respectively. Whilst Smart Alec might thus say “Down then”; our preference rather is “December’s trend is our friend.”
And toward closing, the Economic Barometer’s fallout suggests upside Gold will out should the Fed stew and pout:
So there we are ever so briefly — yet hopefully saliently — for this week. Mind too your favourite Gold information at the website: simple select “Gold” under the BEGOS Markets menu and all the price-leading information is there: Gold’s Market Value, Trend, Profile, Magnet, Range, and the currently-highlighted Market Rhythm featuring the 12-hour parabolic study. We’ll therefore see you in a week’s time with the usual graphics-rich end-of-month edition. Until then:
Bask under your Gold!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”): @deMeadvillePro
24 November 2023 – 08:35 Central Euro Time
The second day of the otherwise abbreviated trading session finds the Bond at present below its Neutral Zone; the rest of the BEGOS Markets are within same, and volatility is moderate. The Bond’s “Baby Blues” appear poised to begin their descent in the ensuing week; and by Market Values, the Bond in real-time is nearly +5 points above its smooth valuation line. As for the Spoo, ’tis +265 points above same, and the fut’s-adj’d live P/E of the S&P is 44.2x. We’ve early closures today across all the components and the Econ Baro is complete for the week.
22 November 2023 – 07:13 Central Euro Time
Just brief and early this morning, (our going into motion across the next few days): only Copper is at present outside (below) its Neutral Zone for today; BEGOS Markets volatility is light. Yesterday’s S&P 500’s down move nonetheless maintains a “textbook overbought” rating for the Index, however now “moderate” rather than “extreme”; (such condition can take days, even weeks, to unravel). And metrics to close out the week for the Econ Baro include October’s Durable Orders. Happy T-Day to you StateSiders and fellow USAers ’round the globe.
21 November 2023 – 09:22 Central Euro Time
The Bond, Swiss Franc, Gold and Silver are all at present above their respective Neutral Zones for today; the other BEGOS Markets are within same, and volatility is leaning toward moderate, (the non-BEGOS Yen having again exceeded 100% of its Expected Daily Trading Range). The S&P 500 is now “textbook overbought” through the past 10 sessions, the last five of which are at an extreme overbought reading: the “live” P/E (futs-adj’d) is 44.7x, essentially double the 66-year historical mean. The Econ Baro awaits October’s Existing Home Sales; and late in the session comes the FOMC’s 31 Oct/01 Nov meeting minutes.
20 November 2023 – 09:17 Central Euro Time
The abbreviated trading week gets going with the Swiss Franc and Oil at present above today’s Neutral Zone; below same is the Bond: recall our noting to mind the Bond’s “Baby Blues” (at either the Bond or Market Trends page); the Blues in real-time are beginning to roll over (albeit still are above their key +80% level). BEGOS Markets volatility is moderate; indeed for the Yen (not yet officially a BEGOS component), it has already traced 120% of its EDTR (see Market Ranges). The Gold Update cites price having moved back above successfully tested support, in concert with inflation having purportedly come to a halt and the Econ Baro recording its 10th worse 12-day stint since the Baro’s inception back in 1998. The Baro today looks to October’s leading (i.e. “lagging”) indicators, one of just five metrics due for this week.
The Gold Update: No. 731 – (18 November 2023) – “Gold Pops as Inflation Stops and the Economy Flops”
The Gold Update by Mark Mead Baillie — 731st Edition — Monte-Carlo — 18 November 2023 (published each Saturday) — www.deMeadville.com
“Gold Pops as Inflation Stops and the Economy Flops“
Some 40 years ago per advertising billboards for the evening blatt known as the San Francisco Examiner: “A lot can happen between 9 and 5”. And relative to just this past week, ’tis perfectly analogous to the state of Gold, Inflation and the Economy: “A lot can happen between Monday and Friday”. To wit for the week:
- Gold above support spritely popped;
- Inflation (FinMedia’s take) abruptly stopped;
- The StateSide economy frightfully flopped.
Just like that. “Who knew?”
Perhaps our neighbour knew in walking past us mid-week with just a single word uttered our way: “3000”.
Great to hear some Gold awareness there, even as price settled the week yesterday (Friday) at 1984. Yet per the above Gold Scoreboard, the yellow metal’s Dollar debasement value is 3704. At least somebody’s paying attention.
Or (oui, c’est ‘Gold’ en français): was the utterance of “3000” instead a reference to valuing the S&P 500, itself now 4514? The inevitable reversion of the Index’s honestly calculated price/earnings ratio (43.8x “live”) to our historical 66-year mean (22.7x incorporating Bob Shiller’s CAPE pre-2013) brings the S&P well sub-3000. Further, we’ve on occasion herein graphically depicted that were it not for the massive monetary infusion to counter COVID, the S&P by our 50-year regression channel would today be in the high 2000s, a level otherwise gratefully accepted by the investing community had there been no pandemic monetary response. Just a few things to make one go “hmmm…”
Regardless, let’s break down Gold’s pop, inflation’s stop, and the economy’s flop.
Gold’s pop: per the opening bullet point, this past week saw Gold pop back and settle above the green 1980-1922 support zone, price as noted now 1984, the week’s high en route being 1996 (i.e. just 93 points below the 07 August 2020 All-Time High of 2089). To Gold’s weekly bars from one year ago-to-date we go, the blue-dotted parabolic Long trend firmly in place with a lot of underlying safe space:
Moreover, we see by Gold’s monthly bars a Moneyflow “Buy” signal: whilst not a formal recommendation, ’tis worth consideration. The following chart shows a wee chap at lower right extolling said signal. This is because the green Moneyflow track has crossed above the double-center line. Across the past 28 calendar years, this up-cross has occurred 11 times. The average maximum points follow-through is +264, but with this warning: three of the past four such Long signals have garnered at most +50 points of additional gain … just in case you’re scoring at home. For at the end of the day as we always say: “Cash management is everything.” But worth an awareness view here:
Inflation’s stop: In concert with October’s retail inflation having come to a halt (the Consumer Price Index registering “unch”) whilst recording wholesale deflation (the Producer Price Index registering -0.5%), our FinMedia friends swiftly declared the Federal Reserve’s interest rate hikes as having come a conclusion, with cuts commencing next year. And as you regular readers recall, our missive’s wrap two weeks back described the FinMedia’s essentially running the Fed. So there we go. Or do we?
As ’tis our penchant to actually do the math, we came up with the following three-panel graphic of monthly “headline” inflation reports from a year ago-to-date; (note at right the Personal Consumption Expenditures report lags the PPI and CPI by one reporting month). Our focus for each panel is the directional slope of the respective dashed regression trendlines. Again: “hmmm…” For both the PPI and CPI, their slopes are rising; and their October figures are quite the deviations from the trendlines. This can imply a snap-back to the upside come the November numbers. Too, the “core” measures (not displayed) for October are: PPI “unch”, CPI +0.2%, and for September’s so-called “Fed-favoured” PCE +0.3%. Let’s see with all three panels identically scaled:
Economy’s flop: The following bit is not for the weak-of-stomach crowd; thus gird one’s loins as necessary. Our StateSide Economic Barometer this past week got summarily skewered, as tweeted (@deMeadvillePro) Thursday evening. Now here’s the picture from one year ago-to-date, the S&P (red line) ignoring overvaluation as the “bad news is good news” illogicity continues:
And specific to “good news”, as we’ve noted since COVID, the Econ Baro doesn’t lead the stock market as it did during the prior 22 years from 1998 into 2020. ‘Course, the monetary injection post-Covid essentially equaled the increase in the market capitalization of the S&P 500, and we’ve thus been awash in liquidity ever since, (hat-tip “The Market Never Goes Down Dept.”) Why, not even Moody’s — a week ago citing that U.S. credit risk “…may no longer be fully offset by the sovereign’s unique credit strengths…” — can stop the stampeding S&P.
“But still, mmb, that’s a really big drop in the Baro…”
‘Tis a most material drop indeed, Squire. Since the Econ Baro’s inception back in ’98, there have been just nine other drops of this magnitude across a 12-trading day span. All have led to fairly imminent — however not always overwhelming — price declines in the S&P. That stated, the most recent such Baro decline occurred just over a year ago as of 22 May 2022; then come 17 June (just 14 trading days hence), the S&P had fallen -521 points (-12.5%). Whether that repeats — with FinMedia missives now suggesting a record S&P high is nigh (i.e. above the 4819 level achieved on 04 January 2022) — depends upon the investing whims of news followers vs. math doers. Neither overlook that the U.S. “riskless” Three-Month T-Bill still yields an annualized 5.233% per Friday’s settle. On verra…
Either way, at this writing the S&P 500 is “extremely textbook overbought” (based on our concoction of John Bollinger’s Bands, along with standardized Relative Strength and Stochastics) and the S&P 500 futures settled yesterday +229 points above their smooth valuation line (per the website’s Market Values page). Too is the S&P’s aforementioned “live” P/E of 43.8x. Recall the P/E as the S&P topped pre-DotComBomb back in March 2000? 43.2x. Today ’tis one perpetually scary/expensive stock market. And with Q3 Earnings Season having just ended, in collecting bottom lines for 1,860 companies, only 51% improved year-over-year. Specific therein to 446 S&P constituents, 64% improved … but given “It’s the S&P”, should not 100% have improved? What shall the next spin of the wheel reveal? “Les jeux sont faits; rien ne va plus…”
Meanwhile, the next special graphic of the precious metals is our two-panel view featuring Gold’s daily bars from the last three months ago-to-date on the left and likewise for Silver on the right. Of note are Gold’s “Baby Blues” of trend consistency having actually gone negative whilst price has risen. This is because the 21-day red trendline has rotated to negative; we oft quip “follow the blues”, however in this case given the positive pricing track for Gold, we’re not really looking for much downside. Indeed for Silver, her red trendline has rotated from negative to flat, hence her rightmost baby blue dot sitting on the 0% axis. Also as penned in the Prescient Commentary this past Thursday: “…Silver’s daily Parabolics flipped to Long effective today’s open (23.510): the average maximum follow-though of the past 10 such studies (either Long or Short) is 1.695 points…” Therefore with respect to Gold and Silver, leave any silly Shorting ideas to Smart Alec:
As to the 10-day Market Profiles which denote prices at the most robust levels of volume, both panels below look healthy for Gold at left and Silver at right. In fact for the white metal, her +6.6% gain for this past week (vs. +2.1% for the yellow metal) served to reduce the Gold/Silver ratio from 87.1x to 83.4x. Still, the century-to-date ratio is 67.9x, leaving Sister Silver plenty of room to outperform Gold on the upside:
In sum, Gold again has a chance to go for an All-Time High. The S&P by any and all rights is due for a dive (understatement). And certainly both “ought be” similarly priced right ’round “3000” … at least if you do the math. (What a rare concept, eh?)
We’ll close it here with this logistical note:
Next week’s 732nd consecutive Saturday edition of The Gold Update is planned to be quite brief as we shall be “in motion”: just straight to the point with a salient graphic or two along with our view. In any event, don’t be a turkey, given what can ensue…
…rather, keep your eyes (and wealth) on the Golden prize clearly due!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”): @deMeadvillePro
17 November 2023 – 08:57 Central Euro Time
‘Twould appear to be a quiet Friday in the making: all eight BEGOS Markets are at present within their respective Neutral Zones, and volatility is very light. October’s Housing Starts/Permits come due for the Econ Baro, which itself has had quite the torrid week (https://demeadville.com/economic-barometer/); more on that in tomorrow’s 731st edition of The Gold Update. In real-time at Market Trends, the 21-day linreg trends are now perfectly flat for both the Swiss Franc and Silver, (the latter nonetheless getting a boost from the aforementioned daily Parabolics having flipped to Long). ‘Tis the final day of Q3 Earnings Season, for which the S&P 500 constituents finds 64% having improved their bottom lines of a year ago.
16 November 2023 – 08:58 Central Euro Time
Both the Bond and Gold are at present above today’s Neutral Zones; the rest of the BEGOS Markets are within same, and volatility is mostly light ahead of a busy day for incoming EconData. Silver’s daily Parabolics flipped to Long effective today’s open (23.510): the average maximum follow-though of the past 10 such studies (either Long or Short) is 1.695 points. At Market Trends, the Bond’s “Baby Blues” are above the key +80% axis; upon their eventual decline below that level, we’d then anticipate lower price levels. Included amongst today’s seven incoming metrics for the Econ Baro are November’s Philly Fed and NAHB Housing Indices, along with October’s Ex/Im Prices and IndProd/Cap/Util.
15 November 2023 – 08:59 Central Euro Time
October’s CPI indeed was “center stage” (per yesterday’s comment), the headline retail level coming in “unch”. In turn the Dollar dove and the BEGOS Markets unimpededly rose. Today ahead of wholesale inflation we’ve both Gold and Silver at present above their respective Neutral Zones for today; the other BEGOS components are within same, and volatility is light. Yesterday’s S&P 500 +1.9% rise now finds the Spoo (in real-time) +216 points above its smooth valuation line (see Market Values): historically such extreme deviation leads on average to price descending by well over -100 points within the ensuing weeks such that we may soon see the S&P below where ’twas prior to the inflation data (4411 vs. now 4491); too there’s the “live” P/E of the S&P now 44.9x. Overall today for the Econ Baro we’ve November’s NY State Empire Index, October’s PPI and Retail Sales, plus September’s Business Inventories.
14 November 2023 – 09:08 Central Euro Time
The Bond is the sole BEGOS Market at present outside (above) its Neutral Zone for today; session volatility is very light, the Econ Baro awaiting October’s CPI to take center stage. Heading our Market Rhythms for trading consistency are (on a 10-test basis) the Euro’s daily Moneyflow, Oil’s 30mn Parabolics and Silver’s daily Parabolics, (too, whilst not a BEGOS component, the Yen’s 1hr Moneyflow also qualifies). The “live” (futs-adj’d) p/e of the S&P 500 is now 42.9x and the yield 1.569% whereas that for the “riskless” U.S. three-month T-Bill is an annualized 5.260%. And in real-time, the Spoo is +127 points above its smooth valuation line, the S&P itself now “textbook overbought” through the past five sessions.
13 November 2023 – 09:04 Central Euro Time
Both Silver and Oil are at present below today’s Neutral Zones; above same is Copper, and BEGOS Markets volatility is pushing toward moderate. The Gold Update confirms our anticipated typical post-geopolitical price pullback: visually therein on the Weekly Bars graphic we’ve placed the 1980-1922 support structure, (expandable to 2001-1901 if need be); and in real-time, Gold is now just +35 points above its smooth valuation line (see Market Values) after having been some +120 points above it. ‘Tis a very busy week for the Econ Baro with 18 metrics due, beginning (again purportedly) today with October’s Treasury Budget. Too, ’tis the final week of a “so-so at best” Q3 Earnings Season.
The Gold Update: No. 730 – (11 November 2023) – “Gold’s Bang-On-Time Dive”
The Gold Update by Mark Mead Baillie — 730th Edition — Monte-Carlo — 11 November 2023 (published each Saturday) — www.deMeadville.com
“Gold’s Bang-On-Time Dive“
Let’s open with this from the “We Hate It When We’re Right Dept.” reinforced by the age-old axiomatic quip: “Be careful of that for which you wish as you just might get it.” And you regular readers definitely get it. For bang-on-time this past week came Gold’s dive.
Far more broadly in positively waving the Gold flag across the past 14 years — from the first edition of the Gold Update on 14 November 2009 with Gold then 1120 to now our 730th consecutive Saturday edition and price at 1943 — in anticipation of interim price declines we’ve on occasion had to deviate from Gold’s otherwise net ascent of 73%, (during which stint the U.S. Dollar’s M2 supply has increased a net 143%). And last week’s anticipative missive (“Gold’s Post-Geopolitical Pullback“) is a case in point, price in turn recording its second-worst weekly loss year-to-date on both a percentage (-2.9%) and points (-57) basis. Which for those of you scoring at home begs the question: “Which has been the worst?”, the answer being the weekly loss ending 29 September of -4.1% or -80 points. ‘Course after that, Gold low-to-high gained +10.7% or +196 points through the heart of October.
Oh to be sure, over the years we’ve pounded the table that “shorting Gold is a bad idea” even in anticipation of price falling. But this time ’round the dastardly Shorts got their fill (if you will) were they Short per last week’s drill. We thus humbly utter the one word by the chap whose car cassette player was sufficiently loud such as to send the Tacoma Narrows Bridge into its destructive suspension swing: “Sorry…” –[Pioneer, ’94].
To add context to present price, graphically for Gold we’ve placed on our year ago-to-date weekly bars the 1980-1922 green-bounded support structure cited in the prior missive. And quite thoroughly hoovered it was this past week per the rightmost bar, although the parabolic trend remains Long:
Further should that support structure bust, it can be expanded to 1990-1914 or even 2001-1901 before Gold’s overall price positioning becomes materially affected … be it lower … or higher than ever before.
‘Course if you’ve been highly hyped up by the FinMedia these days, you may be seeking a dose of meclizine given the descriptive extremes of markets’ motions. “Oh yields are plummeting!” they say. “Oh the Dollar is tanking!” they say. “Oh the stock market’s soaring!” they say. “Oh Gold’s become so passé!” they say. And from the “What Are They Smoking? Dept.” comes this gem: “Oh the Fed’s done raising!” they say. To which we say clearly any effort to do math has gone away. More on that along the way.
But for all the dizzying cries over markets’ careening this way and that, let’s look at the comparative tracks of the five primary BEGOS Markets from one month ago-to-date per the following two-panel display. First on the left — save for Oil — the Bond, Euro, Gold and S&P 500 are all pretty much where they were on this date a month ago. Yes, really:
Second on the right we’ve merely isolated the same tracks solely for Gold and the S&P such as to emphasize their once again dancing un pas de deux as we’ve on occasion depicted these many years. And whilst broadly it shan’t last, at least at this writing the best paired correlation amongst those five primary BEGOS Markets is negative between Gold and the S&P, (which for you WestPalmBeachers down there means when one is going up, the other is going down); thus the mirror-like tracking in the above graphic.
“But what about Oil, mmb?”
Ours is not to wonder why, Squire, other than to speculate when you’ve a lot of something for which demand is intermittently waning, the requisite price to move supply falls, (hat-tip Macroeconomics 101). Moreover: whist many folks are openly befuddled by Oil’s down direction given Mid-East tension, we humbly suggest that one merely mind the website’s Oil and/or Market Trends page such as to follow the “Baby Blues” of trend consistency. Five such Oil signals have therein been produced from one year ago-to-date, the average maximum $/cac follow-through within 21 trading days being $6,386, (ranging from $1,660 to $13,490). That sure beats your trying to outguess the market; or as we oft quip: “Follow the Blues instead of the news, else lose yer shoes.”
Also becoming a bit shoeless of late is our Economic Barometer. Already having been on skids during November, this past week’s muted set of just five incoming metrics was nonetheless net negative for the Baro, notable month-over-month weakenings including September’s Trade Deficit and the backing up of Wholesale Inventories, plus a lurch down in November’s University of Michigan’s “Go Blue!” Sentiment Survey. Too, as household liquidity lessons, the credit card is coming to the rescue.
But: at least we’re told the Federal Reverse shan’t further raise rates, right? Wrong. Here’s the Baro from one year ago-to-date, featuring the earnings-unsupported S&P 500 in red and a table of the Fed’s 2% inflation target vs. the reported data. Stagflation? Stay tuned…
“But mmb, those PPI annualized percents are in line with the Fed’s target…”
Duly noted, Squire. If that Producer Price Index is truly leading, then we ought see the other inflation percents stall, if not fall, although the Fed does have a lean toward those Core Personal Consumption Expenditures. As well, Minneapolis FedPrez Neel “Cash n’ Carry” Kashkari per Dow Jones Newswires “…is not convinced rate hikes are over…” Or to reprise the great Bonnie Raitt from back in ’88: “It’s just too soon to tell…”
In the midst of all this, we read the Fed’s interest-rate increases of the past two years being deemed as “historic”. Again, the Fed’s Effective Funds Rate is presently 5.33% (i.e. the targeted 5.25% + 5.50% ÷ 2). Hardly is that “historic”. Anyone remember the Prime Rate at 22% back in 1980? We do. (What would be today’s FinMedia adjective for that? “Steroidic”?)
Specific to the precious metals this past week, a more apt adjective would be “atrophic” as next we’ve the two-panel display of Gold’s daily bars for the past three months-to-date at left and same for Silver at right. As aforementioned for Oil, here we’ve the “Baby Blues” signaling “Sell” in both metals’ current cases upon the dots having slipped below their respective +80% axes. Again we commend “The trend is your friend” even if it must descend:
Indeed with respect to Gold, we tweeted (@deMeadvillePro) this graphic last Monday, reflective of the “Baby Blues” heading south:
And so in turn we go to the 10-day Market Profiles for Gold (below left) and Silver (below right). Simply stated from high-to-low, the word “hoovered” is apropos, with all labeled lines now overhead trading resistance. As for their two-week percentage changes, Gold’s from top-to-bottom is -4.0% whilst that for Silver is -6.3%. Is it any wonder the Gold/Silver ratio — now 87.1% — is at its second-highest level since last March? No ’tisn’t. Reprise: Do not forget Sister Silver!
Toward the wrap, here’s the stack.
The Gold Stack
Gold’s Value per Dollar Debasement, (from our opening “Scoreboard”): 3706
Gold’s All-Time Intra-Day High: 2089 (07 August 2020)
The 2000’s Triple-Top: 2089 (07 Aug ’20); 2079 (08 Mar ’22); 2085 (04 May ’23)
2023’s High: 2085 (04 May)
Gold’s All-Time Closing High: 2075 (06 August 2020)
10-Session “volume-weighted” average price magnet: 1985
Trading Resistance: 1951 / 1964 / 1970 / 1994 / 2007
Gold Currently: 1943, (expected daily trading range [“EDTR”]: 24 points)
Trading Support: none by the Profile
10-Session directional range: down to 1922 (from 1980) = -81 points or -4.0%
The Gateway to 2000: 1900+
The 300-Day Moving Average: 1883 and rising
The Weekly Parabolic Price to flip Short: 1846
2023’s Low: 1811 (28 February)
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
In sum, Gold is definitely getting the anticipated post-geopolitical pullback. Does it continue? Per the website’s Gold and/or Market Values page, recall that price a mere week ago was +120 points above its smooth valuation line; that deviation has since been reduced to now +39 points. Yet even as Gold’s “Baby Blues” are accelerating lower, again note the cited structural support bases: 1922, 1914 and 1901, the notion thus being that Gold is “safe” above the 1800s.
‘Course, given Gold’s valuation by Dollar debasement is now 3706, ’tis clearly requisite toward maintaining one’s bridge to wealth security.
Thus: don’t be that guy…
…rather consider that Gold today is THE bang-on attractive Buy!
Cheers!
…m…
www.TheGoldUpdate.com
www.deMeadville.com
and now on Twitter(“X”): @deMeadvillePro
10 November 2023 – 09:04 Central Euro Time
The Bond is at present above its Neutral Zone for today; the Swiss Franc is below same, and BEGOS Markets volatility is mostly light. Looking at Market Profile resistors for the Spoo (presently 4372) we’ve the 4381-4384 area followed more dominantly by 4396; whilst by Market Trends the Spoo’s linreg in real-time has just rotated to positive, there is broader structural resistance running from 4341 up to 4431; and by Market Values, the Spoo is now +59 points above its smooth valuation line; for the S&P itself, ’tis now “textbook overbought” through these past three trading days. The Econ Baro concludes its quiet week with November’s UofM Sentiment Survey and (purportedly) October’s Treasury Budget.
09 November 2023 – 08:54 Central Euro Time
Copper is the sole BEGOS Market at present outside (below) its Neutral Zone for today; session volatility is light, save for Copper which has traced 57% of its EDTR (see Market Ranges). As Gold’s “Baby Blues” continue to descend, price has thus far traded to as low as 1953: recall from the current edition of the Gold Update the mention of 1951 as a mid-structural support level; currently priced at 1955, Gold is now +58 points above its smooth valuation line (see Market Values) after having been better than +100 above it through recent days. Indeed for Gold, Silver and the Swiss Franc, their “Baby Blues” all having fallen below the key +80% level have in turn seen lower price levels. As the Econ Baro’s subdued week continues, only due today are the usual weekly Jobless Claims.
08 November 2023 – 09:01 Central Euro Time
The Bond and EuroCurrencies are at present below today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is light. At Market Ranges, the recent EDTR widenings for the Bond, Gold, Silver, Oil and the Spoo appear for now to have peaked. Following Gold’s “Baby Blues” falling below their key +80% level, price (now 1974) has since weakened to as low as 1963 yesterday; the Blues in real-time continue to drop as do those for the Swiss Franc, Silver and Oil. The “live” (fut’s adj’d) P/E of the S&P is now 42.5x and the Gold/Silver ratio a very “Silver-attractive” 87.4x despite the present Blues negativity. The Econ Baro awaits September’s Wholesale Inventories.
07 November 2023 – 09:03 Central Euro Time
All eight BEGOS Markets are in the red and all at present (save for the Bond) are below their respective Neutral Zones for today; volatility is mostly moderate. Gold confirmed its “Baby Blues” (see Market Trends) dropping below their key +80% level; priced now at 1976, we can see 1946 trading near-term, well within the context of the support zone described in the current edition of The Gold Update. By Market Rhythms, the most consistent on a 10-test basis is the Euro’s daily Moneyflow which has been near or at the top of all 405 studies now for some time; on a 24-test basis, both the Bond’s 15mn Parabolics and Moneyflow studies top the list, along with the Spoo’s 15min Parabolics. The Econ Baro’s rather “un-busy” week looks to September’s Trade Deficit and Consumer Credit.
06 November 2023 – 08:33 Central Euro Time
The BEGOS Markets’ volatility is light-to-moderate as the new week unfolds. At present, Copper is above its Neutral Zone for today, whilst Gold is below same. The Gold Update anticipates a typical post-geopolitical price pullback is nigh; indeed at Market Trends, Gold’s “Baby Blues” are in real-time slipping below their key +80% axis, (as have Silver’s already so done); confirmation of the “Baby Blues” settling below that level generally leads to lower prices near-term; too, Gold by Market Values is (in real-time) +106 points above its smooth valuation line. Despite all the excitement over the S&P’s recent rally, price has merely returned to where ’twas three weeks ago, the P/E ratio accelerating last week now to 40.9x as Q3 Earnings Season remains rather average at best; (’twas 39.0x those three weeks ago). Nothing is due today for the Econ Baro as it faces a fairly light load this week with just six metrics due through Friday.