BUY THE DIP (BTD), SHORT THE FED (STF) ?
The Fed is becoming increasingly trapped: despite the FOMC's "best intentions" to telegraph that the economy is improving with the unemployment rate at a paltry 4.3% - because otherwise it clearly wouldn't be hiking, right - CPI has now missed consensus estimates for 5 consecutive months, and what worse, the biggest historical driver of inflation in recent years, shelter and rent inflation, appears to have peaked and is now declining. Worse, wage inflation is nowhere to be found, much as one would expect from a bartender and waiter-led "recovery."
Of course, never one to miss a scapegoat, earlier today Dallas Fed president Robert Kaplan blamed the lack of inflation on technology, saying at an event in Texas that technological disruption is "a new and powerful structural factor that is influencing inflation" and finally noticing that "technology is increasingly replacing people in the jobs market" while "allowing consumers to change shopping habits, and is limiting the pricing power of businesses. That - in addition to global factors - has an impact on inflation."
H/T Tyler Durden
Predictably there was no discussion of how it is the Fed's trillions in excess liquidity that has allowed VCs to invest tens if not hundreds of billions in money-losing ventures, which have made this tech-driven deflation possible.
Gold 5 Minute Chart
live chart HERE
End of Day Recap with Prior Levels Courtesy Moor Analytics
Gold Post Market Synopsis for 8/11/17
GC (Z)
We settled in a bull leg. Settlement below 12647 will start this in a bear leg.
- On a macro basis: On a higher time frame, the move up to 13754 from 10468 in December of 2015 is a correction against the bear trend from 19114 in September 2011 down.
- On a medium timeframe, the move up from 11243 is a correction against the move down from 13754 on 8/2/16—and this may be headed for a new leg to the upside if we take out 12988. Areas of possible exhaustion for this move up come in at 13145-50 and 13216-37.
- On a lower timeframe, we are currently in a correction against the move down from 12988. The maintained gap higher on 7/18 left a medium term bullish reversal intact below that warns of higher trade for days. We have seen $52.21of this so far. The solid penetration above 12417-21 warns of solid short covering in the days/weeks ahead, with a good likelihood of a run back up toward 12980 (+). We have seen $56 of this so far, taking out 12980 today.
- On a shorter-term basis: The break back above 12648 has brought in $33.3 of the decent short covering warned about on the break back above. The decent break above 12731 (+1 tic per/hour) has brought in $25 of the decent short covering we are looking for above. This will come in at 12785 (+1 tic per/hour starting at 6:00pm Sunday). The decent trade above 12716 (-.6 of a tic per/hour) projects this upward $15 (+). We have seen $26.5 of this so far. This will come in at 12680(-.6 of a tic per/hour starting at 6:00pm Sunday). If we break back below decently, look for decent profit taking to come in.
NOTE: a maintained gap lower Monday will leave a short term bearish reversal above that should bring in decent pressure, likely for days.
Michael Moor
Email: Moor Analytics Phone: 646-708-4612
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