GOLD - FISCHERMAN'S TRICK (THE GOOD, THE BAD AND THE CHART)
Nomen est Omen.
FED's Fischer is building a fish pot for the fishing bears in the gold's bull market.
Actually he doesn't know he's building that : the whole story is about the dollar and FED's credibility.
Let's see Friday's happenings.
“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal-funds rate has strengthened in recent months,” said Yellen.
A bit hawkish but in total it's the same FED movie : Escape to the future. They've run out of time. 2 months to the elections. 2 FED meetings before the elections:
September 20-21 and November 1-2 . I think it's crystal clear for everyone if they don't hike in September they will not hike a week before the elections. Actually they don't want to hike before the elections. They simply cannot predict the effect of a rate hike on the stocks market ... If they hike and we have a collapse in the market the Democrats and Cilnton will lose. They will not risk it.
But what can the FED do in this case? If they don't do the 2nd rate hike in this year they will lose all their credibility.
If they do it in September they could lose their job as Trump wins.
So they did what I would do in this case. As I'm running several businesses I use the
"Good cop - bad cop" story many times to cover myself in a losing situation.
Yellen was the good cop, saving FED's credibility : she didn' t say there will be a rate hike for 100% she said the case for the increase strengthened. She cannot say they will increase because they won't. She cannot say they will not increase because she is the face of FED and FED would lose all credibility. So the nasty work was done by Fischer 30 minutes later on Friday:
Fed Vice Chairman Stanley Fischer was more explicit, saying Yellen’s comments were consistent with possibly two rate increases this year—including a move as early as next month. Yellen and Fischer both stressed that any policy decision will be dependent on economic data.
So the only thing they had to do to check how is the labor data 4 days before the end of month. I'm sure they have the numbers till 27th August.
And they saw the number is weak .
Thank god now they can blame the postpone of the rate hike on "bad economic data".
And in November a week before the elections nobody will care why the FED is hiking. The next FOMC is in December.
If Trump wins I'm 100% sure they will hike in December to screw everything for Trump.
If Clinton wins they can find a reason to postpone again or if everything looks fine they can hike...
Techincals
We are still in the triangle.... We had a big volume swing on Friday, but the whole swing was erased.
We rallied on Yellen's speech and gave back all gains at Fischer... So we closed the day almost at the same level as Thursday. We printed an inverted hammer again.
Inverted Hammers represent a potential trend reversal at support levels. After a decline, the long upper shadow indicates buying pressure during the session. However, the bulls were not able to sustain this buying pressure and prices closed well off of their highs to create the long upper shadow. Because of this failure, bullish confirmation is required before action. An inverted hammer followed by a gap up or big green candlestick with heavy volume could act as bullish confirmation.
Indicators
So as it's still possible that we printed the DCL on Thursday and we will be holding that level - and on Friday we will rally on the weak data based on the above.
I simply cannot predict now what will happen from Monday to Thursday.
All the indicators gave in the DCL signal. ( RSI , SlowStoch oversold) We are too early for an intermediate decline what bears are waiting for. The question is how much will the dollar rally at the beginning next week .
FED's Fischer is building a fish pot for the fishing bears in the gold's bull market.
Actually he doesn't know he's building that : the whole story is about the dollar and FED's credibility.
Let's see Friday's happenings.
“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal-funds rate has strengthened in recent months,” said Yellen.
A bit hawkish but in total it's the same FED movie : Escape to the future. They've run out of time. 2 months to the elections. 2 FED meetings before the elections:
September 20-21 and November 1-2 . I think it's crystal clear for everyone if they don't hike in September they will not hike a week before the elections. Actually they don't want to hike before the elections. They simply cannot predict the effect of a rate hike on the stocks market ... If they hike and we have a collapse in the market the Democrats and Cilnton will lose. They will not risk it.
But what can the FED do in this case? If they don't do the 2nd rate hike in this year they will lose all their credibility.
If they do it in September they could lose their job as Trump wins.
So they did what I would do in this case. As I'm running several businesses I use the
"Good cop - bad cop" story many times to cover myself in a losing situation.
Yellen was the good cop, saving FED's credibility : she didn' t say there will be a rate hike for 100% she said the case for the increase strengthened. She cannot say they will increase because they won't. She cannot say they will not increase because she is the face of FED and FED would lose all credibility. So the nasty work was done by Fischer 30 minutes later on Friday:
Fed Vice Chairman Stanley Fischer was more explicit, saying Yellen’s comments were consistent with possibly two rate increases this year—including a move as early as next month. Yellen and Fischer both stressed that any policy decision will be dependent on economic data.
So the only thing they had to do to check how is the labor data 4 days before the end of month. I'm sure they have the numbers till 27th August.
And they saw the number is weak .
Thank god now they can blame the postpone of the rate hike on "bad economic data".
And in November a week before the elections nobody will care why the FED is hiking. The next FOMC is in December.
If Trump wins I'm 100% sure they will hike in December to screw everything for Trump.
If Clinton wins they can find a reason to postpone again or if everything looks fine they can hike...
Techincals
We are still in the triangle.... We had a big volume swing on Friday, but the whole swing was erased.
We rallied on Yellen's speech and gave back all gains at Fischer... So we closed the day almost at the same level as Thursday. We printed an inverted hammer again.
Inverted Hammers represent a potential trend reversal at support levels. After a decline, the long upper shadow indicates buying pressure during the session. However, the bulls were not able to sustain this buying pressure and prices closed well off of their highs to create the long upper shadow. Because of this failure, bullish confirmation is required before action. An inverted hammer followed by a gap up or big green candlestick with heavy volume could act as bullish confirmation.
Indicators
So as it's still possible that we printed the DCL on Thursday and we will be holding that level - and on Friday we will rally on the weak data based on the above.
I simply cannot predict now what will happen from Monday to Thursday.
All the indicators gave in the DCL signal. ( RSI , SlowStoch oversold) We are too early for an intermediate decline what bears are waiting for. The question is how much will the dollar rally at the beginning next week .
Comment:
Description was too long so I continue here...
Comment:
1. If it rallies strong we will break down the 1310 level and tag the 100 EMA or marginally break below it.
2. If the dollar rally is just a weak rally with a stock market decline next week gold can stay in the triangle and break out of it on Friday's weak data.
2. If the dollar rally is just a weak rally with a stock market decline next week gold can stay in the triangle and break out of it on Friday's weak data.
Comment:
The Plan
I'm not touching my position right now. But you have to know that my account is quite strong I can easily handle a drop to even 1250$. But all of you who are all in gold you have to use money management from Monday to Friday to survive a possible drop 1280-1290. I still think that we are not going to break below the previous DCL (1310$) but I really don't know how the banks will play this situation before the next gold rally. If there are enough bears in the game price will crawl up in the triangle and breaks out on Friday.
If there are still too many bulls first we will break down to get everyone super bearish and then they will turn the direction up with a monster rally on Friday.
I think before the data you have to be in your long positions otherwise you will get left behind at the station without gold positions.
I'm not touching my position right now. But you have to know that my account is quite strong I can easily handle a drop to even 1250$. But all of you who are all in gold you have to use money management from Monday to Friday to survive a possible drop 1280-1290. I still think that we are not going to break below the previous DCL (1310$) but I really don't know how the banks will play this situation before the next gold rally. If there are enough bears in the game price will crawl up in the triangle and breaks out on Friday.
If there are still too many bulls first we will break down to get everyone super bearish and then they will turn the direction up with a monster rally on Friday.
I think before the data you have to be in your long positions otherwise you will get left behind at the station without gold positions.
Comment:
I think Sunday-Monday night (GMT) (Sunday afternoon EST) is very important. If banks wants to push down the price they will attack gold right after the open. So get ready tonight for position management....
Comment:
Watch how important is the green trendline - we turned down from there - the bear market trendline from all time highs. We have to break above that level significantly on the weekly chart before the next rally begins.
Comment:
Even better on the weekly chart. We simply cannot close above the bear market's trendline...
I think if we close above that level significantly commercials will start short covering...
I think if we close above that level significantly commercials will start short covering...
Comment:
The attack is not coming.
If we stay like this we will see scenario 2.
Watch the hourly divergencies since 22.08.
If we stay like this we will see scenario 2.
Watch the hourly divergencies since 22.08.