Many macroeconomic observers forecast that the winding down of the Federal Reserve’s quantitative easing programs would lend a strong bid to the US Dollar. In fact, virtually the exact opposite has occurred as the dollar has not performed well during 2014 and is currently on the verge of a major breakdown: Click to enlarge USD… Continue Reading

Volatility in the gold market, both realized and implied, has dramatically declined during the past year as evidenced by the following two charts: Click to enlarge Gold (daily) The average true range (14 days) for gold has fallen by 50% since October 2013 and currently sits at its lowest level since last March (just before… Continue Reading

Did the S&P 500 really make another all-time high Friday morning? It certainly doesn’t feel like it! The rapidly deteriorating market breadth and powerful downside reversal since Friday morning makes the all-time high at SPX 1897 seem like ages ago….. Click to enlarge While the S&P has fallen more than 50 points, the carnage in… Continue Reading

The Euro Area continues to face challenging disinflationary headwinds which have vexed ECB policymakers for the past couple of years: Click to enlarge After this morning’s ECB statement and Mario Draghi press conference it is becoming increasingly likely that the ECB is on the cusp of launching some form of large scale asset purchase program… Continue Reading

Isn’t it funny that 60 Minutes ran a headline story about how the stock market is rigged on Sunday night and the S&P 500 makes another all-time high less than 48 hours later? You simply can’t make this stuff up: Click to enlarge With today’s rally the S&P 500 has made an all-time high for… Continue Reading

After a nearly textbook 38.2% retracement of its October-March rally CCJ is set to resume its uptrend: Click to enlarge The weekly chart shows that CCJ found support after a standard pullback to previous resistance: Moreover, today’s 5% rally took place against a backdrop of a steep sell-off in crude oil and continued stagnation at a… Continue Reading

Gold has now retraced half of the January-March rally and Friday’s low of $1286.10 may have marked the end of the recent correction: Click to enlarge There is a substantial amount of evidence pointing to the idea that a short-term/intermediate-term low may have been put in place Friday: Friday’s session printed a spinning top candlestick… Continue Reading

As the S&P 500 flirts within 1% of fresh all-time highs, investor sentiment remains ebullient: Click to enlarge Meanwhile, the market leading small caps have begun to noticeably underperform large caps: And the longer term chart of the Russell 2000 (IWM) offers a picture of a market near a potentially decisive turning point as it… Continue Reading

Goldman Sachs is out with another piece of research making a bearish call on gold – the piece is entitled “Cold, Crimea, & China: Transient supports to gold prices”. The entire research note can be summarized in 4 charts and a couple of sentences: Click to enlarge Goldman is forecasting an acceleration of US economic… Continue Reading

If we were only able to look at one chart for the next week, it would have to be the JPM chart: Click to enlarge If the breakout holds and JPM is able to continue gradually moving higher then there are probably at least a couple months left in the broader market rally. However, if… Continue Reading

The simplest explanation for this week’s bearish reversal in gold is that too much hot money has rushed into the space in recent weeks – this week’s Commitments of Traders report clearly illustrates just how overheated gold futures have become recently: Click to enlarge  This is the largest “Commercial” net short position in gold futures… Continue Reading

After gold tagged $1392.60 on Sunday evening we warned that conditions were ripe for a pullback after such a large upside move. Since then we have seen gold suffer a sharp downside reversal and there is even the potential for gold to print a large bearish engulfing candlestick on the weekly chart: Click to enlarge… Continue Reading

After a $211 rally from the New Year’s Eve low of $1181.40 gold may finally be running out of steam. Here are 3 reasons why a pullback in gold is imminent: 1. The latest COT data shows much of the recent rally has been fueled by short covering among speculators: This is more than a… Continue Reading

A massive breakout in the GDX today as it prints a large bullish marubozu candlestick: Click to enlarge There could not be a clearer resolution to such a significant bottoming pattern (multi-month cup & handle) – prepare for a full retracement of the April 2013 crash in the gold miners.

Fairfax Holdings recent annual letter to shareholders offers many nuggets of wisdom including this excerpt on China (emphasis our own): “In the last few years we have discussed the huge real estate bubble in China. In case you continue to be a skeptic, here are a few observations from Anne Stevenson Yang, an American who… Continue Reading