ADP Releases the Kraken
1- Markets React to the ADP Report
Today's ADP report reflected an abysmal construction sector data dump. Long dollar players betting on a hike backed out forcing the USD lower against all major currencies except the Mexican Peso. The Peso itself devalued vs the dollar as a probable reflection of a Trump Presidency. Gold got the greenlight to hit its technical target in what was a greatly needed relief rally. Stocks are not going to like this either, despite the non hike. And some of today's major polls (pre ADP) show Clinton and Trump tied
Soren K.
2- ADP's construction employment data last month is biggest drop since Dec. 2010
3- The Mexican Peso Plummets vs the USD as a reflection of Trump's chances increasing
h/t zerohedge
Why does the Mexican Peso matter? Trump expects the Mexicans to pay for the wall he wants. That won't happen. The net result will be trade issues at the border and a general Un-Nafta-ing of things. Hence a Trump Presidency is bad for their currency.
4- The ADP report kills any pretense of a rate hike and releases the Gold Kraken
interactive chart here
The MOMO boys have the baton and are now going to buy strength and sell weakness. Volatility will increase. We've been calling for a rally to $1300 since Oct 6th. Tables have been pounded, phones have been broken, duct-taped and broken again. From here we think it very smart to peel back profits, or at least trail stops. The next level of significance is $1307-$1309. Start to watch OI. If it goes up, that is ok. If it goes up on new highs but RSI does not make new highs, then be careful. That is what happened on the lows
5- Today's IDP/TIPP Poll shows Clinton and Trump tied with 5 days until the Election
Gold Doesn't Care Who the President is
It does not matter who is President. All "things" are going up as a function of inflation. Under Trump we agree with Alchemist the rally will be relatively orderly in a 1970's type play. We'd be long gold and short calls as a dividend. If Clinton wins, it will more likely move higher in "fits and starts" as it has for the last 3 years. Continued Fed policies will encourage financial asset inflation and Gold will be left behind. But crises will happen and denial balloons will pop. We'd be long less Gold and trade around it, buying on dips and selling on rallies while keeping a core position.
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