We've reached the 1st level at the end of the 1st wave at the 50 and the blue .
Next week we have to print a DCL with oversold at or near to the 100 . Bulls will have to face with the next big surprise: the blue area is not a . It's going to break down not to the upside...
The first 3 daily cyle lasted for 25-30 days, this one is already 10 days longer so timewise we have to print the DCL at the beginning of next week (Tuesday or Wed)
Indicators: 10 and 20 is crossing over, very , is heading to oversold...
So this 2-3 days will be really scary for the goldbugs, by the DCL we will loose most of the weak bulls.
So next week I'm looking forward to see price printing a daily cycle low around the red and the 100 (1220-1225).
Don't forget : time is the keyword. (For the following levels pls check "The awakens" post)
I would like to see as price is coming down into the red box by Wednesday.
Tomorrow or On Thursday we will enter into the red box there will be tha daily cycle low.
Last hope of the bulls has fallen.
The U.S. banking system the five banks in the United States that each have more than $44 trillion dollars in exposure to derivatives (Totalling around $280 Trillion). Today, the U.S. national debt is sitting at a grand total of about $19 trillion dollars, And unlike stocks and bonds, these derivatives do not represent "investments" in anything. Essentially they are just paper wagers about what will happen in the future.
Total Assets: $2,476,986,000,000 (about 2.5 trillion dollars)
Total Exposure To Derivatives: $67,951,190,000,000 (more than 67 trillion dollars)
Total Assets: $1,894,736,000,000 (almost 1.9 trillion dollars)
Total Exposure To Derivatives: $59,944,502,000,000 (nearly 60 trillion dollars)
Total Assets: $915,705,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $54,564,516,000,000 (more than 54 trillion dollars)
Bank Of America:
Total Assets: $2,152,533,000,000 (a bit more than 2.1 trillion dollars)
Total Exposure To Derivatives: $54,457,605,000,000 (more than 54 trillion dollars)
Total Assets: $831,381,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $44,946,153,000,000 (more than 44 trillion dollars)
Deutsche has a total derivatives exposure that amounts to $75 trillion. That’s about 100 times greater than the €522 billion in deposits the bank has. It is also 5x greater than the GDP of Europe and more or less the same as the GDP of… the world.
When we look at the world GDP along with the worlds assets which totals around $240 Trillion dollars, And the worlds exposure in derivatives $1.6 Quadrillion dollars. These huge numbers are astounding, So having these very large derivatives positions are very dangerous especially when you are looking at investing in the stock market in 2016.
The US FED sold 18000 contracts worth $2.4 Billion dollars to keep gold prices down in MAY. It appears the US FED knows the economy is deteriorating and trying to push gold down to make it appear that the market is doing ok.
Investors typically buy gold when they sense financial danger whether it is a stock market crashes. It’s the ultimate form of wealth insurance. If you look at the S&P500 WEEKLY chart you can clearly see that the 50EMA has crossed over the 100EMA. (I tried pasting the chart but I’m new to tradingview. This occurred in 2002 and 2008, when we had two crashes.) Whether this occurs this time around we will just have to wait and see, especially with exposure it derivatives at $1.6 Quadrillion dollars.
Those pulling the strings behind the scenes are also attempting to prop up a US currency. The goal is to drive gold and silver investors, forcing them to panic sell their positions and accelerate the price decline. Whether theses attempts at smashing down gold prices will prove to be nothing more than a short-term mirage.
The Fed knows that the ability of the US to pay its bills in its own currency is the reason it can stand its large trade imbalance. If the dollar loses the reserve currency role, the US becomes just another country with balance of payments and currency problems and an inability to sell its bonds in order to finance its budget deficits.
However, if inflation is really starting to make a return and that dollar strength starts being driven by inflation concerns, there is a positive story for gold in the longer term,
We will definitely see more of theses sell offs in gold like we saw in May in the future.
1. Governments (Especially USA and China)
2. Big banks - as they are trying to make big money from their insider informations.
And i'm pretty sure that the FED is giving out some info to some of the big banks because alone unable to manipulate the markets. I don't know how China is working but it's more simple for them they do whatever they want with their markets. When SM was falling too much they simply didn't open it. :)
Gold is in the bull market already it's just a bull market decline what we will have in the next 4-5 weeks.
This is the first in this bull so it's going to be a tough one.
You have to get prepared for 1100 in the worst scenario (maybe only 1190 but the exact number can't be predicted right now) . Calculate with your account not having a margin call at the bottom.
Lets look at something more investors will be more familiar with, “buying stocks”. The number of shares is limited. When an investor buys shares in a company, lets say ”Apple”, they must be paired with another investor who owns actual shares and wants to sell at the prevailing price. That’s straightforward price discovery.
Not so with the futures market such as the COMEX. If an investor wants to buy contracts for gold, they won’t be paired with anyone delivering actual gold. They are paired with someone who wants to sell contracts, regardless of whether he has any physical gold.
The party selling that paper might be another trader with an existing contract. Or, as has been happening more of late, it might be the bullion bank itself. They might just print up a brand new contract for you. Yes, and as many as they like. All without putting a single additional ounce of actual metal aside to deliver.
But those features are barely a factor in setting the COMEX “spot” price. In that market, derivatives are traded instead, and their supply is virtually unlimited. Do you see the problem? The World’s exposure to derivatives is around $1.6 Quadrillion dollars.
If you bet on the price of gold by either buying or selling a futures contract, the seller might just be a bullion banker. He completely controls the supply of your contract.
It can be hard to predict what gold is doing right now by looking at charts. We can let gold drop, and go out and buy psychical gold. Then wait until the market corrects itself sending gold prices sky high. But until then we will get a few more selloffs pushing the price of gold down. If you can’t beat, join them. Let gold drop so it's cheaper for us to buy ;)
I will stick with physical bullion and understand “spot” prices for what they are. $1.6 Quadrillion dollars in derivatives is a lot of money to pay back especially with world GDP around $55 Trillion dollars. Something has to give, if someone can tell me how they are going o pay that large amount of money back, I’m all ears.
Even Warren Buffett said that nation debt ($19 trillion) as a percentage to GDP is a little higher than he would like it but it is not dangerous. Buffet said that national debt in relation to GDP was at 120% in 1945-46 after WWII. You can watch the entire youtube clip which goes for 10mins or skip to 4mins. I think even BUFFET knows that the national debt isn't the big killer, it's derivatives.
Financial markets will respond to economic indicators that tell us where the economy is going. However, GDP is a lagging indicator, when GDP statistics are published, they tell us where the economy has been. So markets are not going to respond to trailing indicators. The aim of the game is to try and understand where the market is going.
"The stock market can be fooled, but not forever".
Europe is not so weak as it was before. And everybody is printing money , USA also - just not telling.
Everybody is saying that they are printing money , except the USA.
If you check the weekly chart you can see all of this. We are in a range which is always breaking out to the downside , and making lower lows. I'm 80% sure that we are not going to tag the upper line of the range and 100% sure that we will not break to the upside from this range...
If we get more of a slow down on the economy how can the FED increase interest rates? The US FED has to do something, I think they won’t raise interest rates because if they do, the market will be in decline whereby the USD will fall and gold will rise. Agree, that when the FED eventually decide to increase interests rates the USD will be in decline, so it will be a matter of when.
(@TRADER727 - The primary purpose is to have an intellectual discussion; a genuine debate that is accessible for traders to read so one can form his/her own opinion)
Economic indicators are showing us and letting us know that there is a slow down in the economy. Look at store closures, stores decline in sales, look at manufacturing.
You want to look at charts TRADER727, knock yourself out.
US Manufacturing PMI Employment Index
US Retail and consumer spending
Retail sales decline points to stock market corrections.
Retailers: Inventories to sales ratio
Total unemployment, plus all marginally attached workers plus total employed part time for economic reasons
Employment level: Part time
Motor vehicle retail sales, domestic: 455 (thousands of units) down to 417
CPI index (CPI statics identify that rise in CPI typically denotes rise in inflation)
Look at layoffs just in 2016,
National oil well 17,000
Wal-mart 16,000 + 154 store closures
Hallow burton 10,000
Weatherford intentional 6000
Beoing 4000 by June
Sears, Kmart 78 store closures.
The list goes on.
Inflation is rising in the US due to increase spending and the way the FED can slow down inflation is to increase interest rates. However this has a negative impact on the economy. So, when the FED finally raises interest rates, banks also have no choice to raise their interest rates as well. So, people will stop spending, prices drop and inflation slows because it cost more money to pay that loan. The problem is that if we look at lets say S&P500 weekly chart you can see the 50EMA has crossed the 100EMA for the third time since the year 2000. the last two times this happened there was a decline in the market. I think the FED acknowledges whats happening and is concerned that if they increases interest rates whether is execrates the decline in the market.
When you look at the overall picture you can make better-informed decisions.
That's why the money printing, that's why they let the rally of the commodity prices (oil, gold, metals).
I think they are raising because if they hike now they will be able to cut at the next recession. But that's years from now.
What do you think they will buy from this "killions " of printed money? Will they put it to the banks for negeative and zero interest rates? No. They will buy stocks, precious metals , oil etc.
So if you prepaing to short the equities than fasten your seat belts because it's entering the last phase into this bull market.