Euro Bank Stocks/Gold/US$
Trader Scott’s Market Blog
February 7, 2017
The European bank stocks, like Unicredit, are a disaster. There will be more of them, along with Japanese banks. And coming up quickly we have a French election which is already causing jitters. These situations are a big problem for the Euro, and there are plenty of other global problems as discussed here. So even though the $ is a piece of crap, the others are worse. And these things, along with the technical situation in the $, will benefit the Dollar….for now. And the if the new adminisrtation thinks they can talk down the $, they’re dreaming. But in a post on January 15th my belief was they would try anyway: “Likewise, the President-elect will not be pleased at all with a ‘too strong’ $.”And sure enough two days later Trump told the esteemed WSJ that he was not pleased with a “too strong $”. It was obvious they were going to play this game, and the media and many “analysts” fell for it anyway and immediately called for “the top” in the US$.
The 103.80 high in the US$ Index was on January 3rd (and gold was nowhere near its’ low). And even though I’m still bullish on the $ and expect new highs, mypostfrom January 2nd continued to stress my caution about the weird sudden bulishness on the $ which was due to..anyone…..anyone..Donald Trump:
“There is tremendous bullishness right now in the $ right as it’s sitting in a pretty big resistance zone. There is also alot of hope in the new Administration. There was alot of hope 16 years ago for the previous Republican Administration of George (Hanging Chad) Bush, but that didn’t stop the $ from putting in a major top. I would expect a similar situation early on with this President-elect. Gold will begin to “sniff out” a topping process in the $, and it will begin take pressure off of it. And there are situations coming up this year in Europe, where gold and the $ can rally together.”
Gold is already slowly starting to “sniff out” a top in the $, or better said presently, problems with the Euro. Gold bottomed in 1999, which was 24 months from the final top in the US$ in 2001. Gold and the $ will slowly, but surely sync up thru this year (it’s already happening a bit), with some reversals of that relationship at times. They will both benefit from the aforementioned problems. But also likely benefitting will be the US share market, after a knee jerk reaction, with capital rushing to the US. And while US Treasuries are very bearish long term, my belief is they will be the surprise beneficiary, as it’s actually the European bond market which will be hit first, with the capital rushing then to the US. What an absolute mess the geniuses at the central banks made with their super brilliant concoction, “negative interest rates”. Idiots.
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.
February 8, 2017 @ 2:09 pm traderscott
I did a live video at 1:35 PM with taking a long position in JNUG – daytrade – filling gaps and getting excessive on the downside. Just took partial profits. I’m going to do more of these live vidoes right when entering orders. Hope to post later today.
February 8, 2017 @ 3:53 pm David V
Missed a JDST bid when gold stalled out so I bought JNUG at the gap down but it’s scary at these heights.
FCEL is way down lately, they have some new projects under their belt and more cash than market cap, potential take over target?
February 8, 2017 @ 3:59 pm traderscott
Understandable David, but just about time frame perspective.
Would be nice if FCEL gave a reason technically to buy.
February 8, 2017 @ 5:17 pm traderscott
My belief, expressed several times since December, is the bond market is under serious accumulation. Why, I don’t know. There is a monster imbalance in the weak/strong hand positioning. That is not the only reason for my bullishness, but the positioning situation is extreme. The technical situation with the selling climaxes is what got me bullish initially, the “news” always follows. The bullish condition is contrary to my belief of a huge bond bear market coming, but time frame confusion is tricky. And the bond bear is later this year anyway. I’ve mentioned several times, this bond rally could be quite surprising. So maybe I’m totally wrong about this whole thing, but when I started getting bullish in December there was hysteria about a bond crash. Believing in accumulation keeps me grounded and focused, and retests are normal, as has been repeated numerous times in this blog also about gold. The most recent retests of the lows in bond prices was from Jan. 26-Feb. 3 (click here for chart). The chart is annotated with the arcs showing the selling climax area(s)/retests in Dec. and the recent retest. My initial buy and 1/2 profit with the arrows are marked and also are archived. I was adamant in Dec. about the big change in character and long side opportunity. Will I be wrong, maybe. Only in the fullness of time. But I do actually take positions in markets, the writing is ancillary, but fun. Most people who write market stuff don’t actually do anything but write. How in the world can someone write about markets that doesn’t actually trade or invest. I respect people who write about markets AND actually make bets in markets with their own money, because they ACTUALLY have to deal with the crap inherent in putting real money down. And whether they are right or wrong, at least they’re actually doing something, not blah, blah. The recent drop in price brought the bears out once again. Can the bonds have more re-testing of the lows? Of course, the market will do what it “wants” to do. In this post, I left a comment at 1:30 PM on January 26th (third arrow). The reason why I know this type of thinking/behavior is toxic, is because I’ve done it, and had to pay the price for my foolishness. At the new website, the posting of this stuff won’t be so awkward.
“So we had the huge rise in bond yields/fall in price into mid-December, when people were weirdly hysterical about a bond market crash. I turned very bullish on bonds last month (archived). Then we had the big drop in yields/price rally. And then of course, right into the recent top in prices, then the crowd decides, “well maybe bonds are now bullish”. Then we have a big backup in yields/falling prices, and now once again I’m hearing the “that’s it, the bond bubble has burst, prices are going to crash”. Maybe they’re right, but to me this is just a big backup in yields within the process. Second half of 2017 will be another story. This whole approach to markets of wildly swinging from bearish when prices are falling, and possibly right at the lows, and missing the bottom by a mile. Then getting bullish after a big rally, and not taking some profits into strength – this stuff kills a trading account – kills it! I warned at the recent highs in bond prices about taking some profits, it was getting exuberant again.“
February 8, 2017 @ 6:07 pm Jon
Big gap to fill at 130 with a big double bottom 117-123. Looking at todays action, the shorts are starting to sweat. Amazing there can be so many gaps in a market that is supposedly highly liquid. Commercials will win again…
February 9, 2017 @ 9:24 am traderscott
The JNUG live video from yesterday is up with the partial profits taken in the second video, and half held overnight. Gold backed off a bit overnight in an orderly fashion, as it bumped up against the $1245 resistance – I was concerned about an emotional upthrust thru there, which hasn’t happened (yet).
February 11, 2017 @ 2:33 pm Jon
Grant Williams on the future of the petrodollar. I really like his presentations.