Category Archives: silver-rounds

I’m gonna do a quick video on silver this weekend. For whatever reason, I’m seeing a lot of analysts trying to call a top in metals and I don’t understand why. I also see them trying to call a top in the stock market; not really understanding that either. Why is it that when something is making new highs, people want to try and call it a top? baffling to me. So, let me just go over this real quick. This intermediate degree rally broke out above this major resistance that had been in place for what three, three and a half years? The problem was that it came very late in this intermediate cycle. And the rule is that breakouts that occur late in a cycle usually don’t produce sustained moves. You need to break out that occurs early in a cycle to get a sustained move. If a normal cycle link, let’s say is 20-25 weeks, and you get a breakout on week 17 where you’re going to need some weeks for the declining phase of the cycle. And so there’s just not enough time to get a sustained move, generally speaking. So, that was the problem right here with this breakout above $30; it came very late in the intermediate cycle.

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Gary Savage is a 57-year-old retired entrepreneur living in Las Vegas. He has been investing in stocks and commodities for 15+ years. He is a self-made multi-millionaire and attributes his financial success to savvy investments made in owning/selling several businesses, real estate, and, more recently, the stock market. He is also an Olympic weightlifting champion, and world record holder. Gary’s stock market investment philosophy and success owes to an unusually disciplined and keen understanding of market cycles combined with cutting edge sentiment data which allows him to anticipate and articulate how larger trends are likely to unfold. His analysis is almost always in strong contrast to what the public is thinking – and, provocatively, several steps ahead of the crowd. Gary’s renown as a recognized trading/investment expert in the areas of precious metals, stock market, oil and currency markets is demonstrated by his numerous internationally published articles in these market areas. Gary publishes the Smart Money Tracker, a market newsletter available online by subscription only, and also the SMT free blog. Continue reading →

(Bloomberg) — While the stock market rallied after the long-awaited Federal Reserve rate cut last week, there’s a sense of unease accompanying the gains.Most Read from BloombergReferring to the Fed’s shift to a bigger rate cut than had been expected even a week before the meeting, Charlie McElligott, cross-asset strategist at Nomura Securities, wrote in a note that the “‘fear of left-tail’ then self-fulfills the right-tail outcome” and that it’s “pushing the market out of recession trades, instead capitulating back into soft-landing” expectations.That change in market perception is in turn causing a forced re-risking and exposure grabbing, according to McElligott. Some is mechanical, with leveraged exchange-traded funds buying across products, while market-overwriting funds are forced to snap back up short call positions. Other investors who reduced risk after the August volatility spike now have to purchase at record highs — an uncomfortable prospect with a hotly contested presidential election, an uncertain macroeconomic picture and corporate earnings approaching.“A big re-positioning ultimately sets the table for the next wobble,” says McElligott, adding that more risk taking at some point necessitates downside hedging, which in turn changes the options market’s dealer positioning into something that acts as “accelerant fuel for ugly market events.”There are signs of that hedging in measures of volatility and skew, signaling that despite US equity gauges rallying to record highs after the Fed decision, investors are willing to pay more for protection. The Cboe VVIX Index — measuring the volatility of VIX options commonly used to guard against a steep selloff — remains about 20% above its level from the beginning of June. And Nations SkewDex, which gauges the relative cost of bearish put options, is also elevated.In other signs of tail-risk hedging, investors picked up buying of Cboe Volatility Index calls and call spreads — purchasing 85 and 90 calls in particular — and of S&P 500 Index (^SPX) put spreads. Going into the Fed meeting, non-commercial net-short VIX positions were the smallest since 2019.A pickup in hedging — while protecting individual investors — may leave options dealers short gamma, forcing them to sell more to stay balanced in a sharp market drop.The central bank’s half-point rate cut raised the question of whether the Fed’s hand had been simply forced, if the market’s big fear of a hard landing, best expressed during the August selloff, was scary enough for policymakers to make a big cut and reassure the soft landing narrative.And while all the technicalities of the market play their own game, the debate about how low rates can go and how stimulative a cut actually is has just begun.“We continue to believe that central banks will have less leeway to ease in 2025 than they and many investors believe,” wrote Berenberg economist Holger Schmieding. “Continued loose fiscal policy, persistent underlying inflation pressure and structural labor shortages are reasons against cutting rates too deeply.”Most Read from Bloomberg Businessweek©2024 Bloomberg L.P. Continue reading →

By Suzanne McGee and Carolina Mandl(Reuters) – Investment advisers are urging clients to dump hefty cash allocations now that the Federal Reserve has begun its much-anticipated interest-rate easing, a process they expect to limit the appeal of money-market funds in the coming months.Retail money-market funds have attracted $951 billion in inflows since 2022, when the Fed started its rate-hiking cycle to tame inflation, according to the Investment Company Institute, which represents investment funds. Their assets stood at $2.6 trillion on Sept. 18, roughly 80% higher than at the beginning of 2022.”As policy rates fall, the appeal of money-market funds will wane,” said Daniel Morris, chief market strategist at BNP Paribas Asset Management.On Wednesday, the U.S. central bank cut the federal funds rate by a larger-than-usual 50 basis points to a range of 4.75% to 5%, which makes holding cash in deposit accounts and cash-like instruments less appealing.”You’re going to have to shift everything … further up in the amount of risk you’re accepting,” said Jason Britton, Charleston-based founder of Reflection Asset Management, who manages or oversees around $5 billion in assets. “Money-market assets will have to become fixed-income holdings; fixed income will move into preferred stocks or dividend-paying stocks.”Money-market funds – ultra low-risk mutual funds that invest in short-term Treasury securities and other cash proxies – are a way to gauge investor interest in the nearly risk-free returns they offer. When short-term interest rates climb, money-market returns rise with them, increasing their appeal to investors.”Investors need to be aware that if they’re counting on a certain level of income from that portion of their portfolio, they may need to look at something different, or longer-term, to lock in rates and not be as exposed to the Fed lowering interest rates,” said Ross Mayfield, investment strategist at Baird Wealth.Carol Schleif, chief investment officer of BMO Family Office, expects investors to keep some cash on the sidelines to wait for opportunities to buy stocks.It could take a week or more for initial reactions to the Fed’s decision on Wednesday to show up in money-market fund flows and other data, analysts note. While the Investment Company Institute reported an overall decline in money-market holdings in its last weekly report on Thursday, retail positions were little changed to higher and advisers said it has been tough to persuade that group to abandon their cash holdings.Christian Salomone, chief investment officer of Ballast Rock Private Wealth, said clients faced with lower returns on cash are eager to invest in something else.Still, “investors are stuck between a rock and a hard place,” Britton said, faced with a choice between investing in riskier assets or earning a smaller return from cash-like products.(Reporting by Suzanne McGee and Carolina Mandl; additional reporting by Davide Barbuscia; editing by Megan Davies and Rod Nickel) Continue reading →

(Bloomberg) — Asian stocks extended a rally in global equities as jobs data backed the view that the US economy is headed for a soft landing. The yen gained as the Bank of Japan left interest rates unchanged.Most Read from BloombergThe MSCI Asia Pacific Index rose as equities in Japan, South Korea and Australia advanced, while mainland Chinese shares slipped. A gauge of global stocks set a fresh peak alongside US shares Thursday.The BOJ kept its monetary policy settings steady Friday, signaling it sees no need to hurry with interest rate hikes as it monitors financial markets after its July increase and hawkish views spooked investors. Data released earlier showed the nation’s key inflation gauge accelerated in August for a fourth consecutive month.“The focus now shifts to Governor Ueda’s press conference,” said Shoki Omori, chief desk strategist at Mizuho in Tokyo. “Depending on the degree of this tone, if the hawkish stance is clearly conveyed to the market, the USD/JPY exchange rate is expected to trend downward.”Treasury yields were little changed on Friday, while an index of dollar strength was locked in a narrow range.A drop in US jobless claims to the lowest since May signaled the labor market remains healthy despite a slowdown in hiring. This added a boost to risk appetite and eased concerns the Fed may have been too slow to trim borrowing costs when it cut rates by half a percentage point on Wednesday.The equity gains on Thursday and Friday mark a “delayed euphoric reaction,” to the Fed but one that may retreat, according to Nick Ferres, Chief Investment Officer of Singapore-based Vantage Point Asset Management. “Valuation is already heroic and risk compensation is poor, particularly if the earnings cycle disappoints.”Over in China, the country is considering removing some of the largest remaining curbs on home purchases after previous measures failed to revive a moribund housing market, according to people familiar with the matter. That pushed the BI China Real Estate Owners and Developers Valuation Peer Group gauge higher.Meanwhile, the nation’s banks maintained their benchmark lending rates for September, as policymakers held off on further monetary stimulus while financial institutions struggle with record-low profit margins. The Securities Times reported on Friday that this week’s Fed rate cut has provided room for China to boost monetary and fiscal stimulus to support the economy.The European Union and China agreed to intensify discussions to avert looming tariffs on electric cars ahead of a deadline that’s only days away.Elsewhere, Wall Street banks are divided on the pace and extent of upcoming Federal Reserve rate cuts. JPMorgan Chase & Co. expect another 50 basis point reduction in November, while Goldman Sachs Group Inc. anticipates 25 basis point cuts at each meeting from November to June next year.In Asia, Taiwan’s property and construction stocks dropped Friday following the central bank’s decision to increase the amount of funds banks must hold in reserve to cool the sizzling property market.Data set for release include inflation for Hong Kong and foreign exchange reserves for India.In commodities, gold steadied near a record high while oil was on track for the biggest weekly advance since April after the US rate cut.Key events this week:Japan rate decision, FridayEurozone consumer confidence, FridayCanada retail sales, FridaySome of the main moves in markets:StocksS&P 500 futures fell 0.1% as of 12:52 p.m. Tokyo timeNikkei 225 futures (OSE) rose 2%Japan’s Topix rose 1.4%Australia’s S&P/ASX 200 rose 0.4%Hong Kong’s Hang Seng rose 1.3%The Shanghai Composite fell 0.2%Euro Stoxx 50 futures fell 0.2%Nasdaq 100 futures fell 0.2%CurrenciesThe Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1165The Japanese yen rose 0.3% to 142.16 per dollarThe offshore yuan rose 0.3% to 7.0453 per dollarThe Australian dollar was little changed at $0.6819CryptocurrenciesBitcoin rose 0.8% to $63,565.84Ether rose 1.1% to $2,493.88BondsThe yield on 10-year Treasuries was little changed at 3.71%Japan’s 10-year yield was unchanged at 0.850%Australia’s 10-year yield was little changed at 3.92%CommoditiesWest Texas Intermediate crude was little changedSpot gold rose 0.2% to $2,592.04 an ounceThis story was produced with the assistance of Bloomberg Automation.–With assistance from Winnie Hsu.Most Read from Bloomberg Businessweek©2024 Bloomberg L.P. Continue reading →

By Lewis KrauskopfNEW YORK (Reuters) – As the Federal Reserve kicks off a long-awaited rate cutting cycle, some investors are wary that richly valued U.S. stocks may have already priced in the benefits of easier monetary policy, making it harder for markets to rise much further.Investors on Thursday cheered the first rate cuts in more than four years, sending the S&P 500 to fresh records a day after the Fed reduced borrowing costs by a hefty 50 basis points to shore up the economy.History supports such bullishness, especially if the Fed’s assurances of a still-healthy U.S. economy pan out. The S&P 500 has gained an average of 18% a year following the first rate cut in an easing cycle as long as the economy avoids recession, according to Evercore ISI data since 1970.But stock valuations have climbed in recent months, as investors anticipating Fed cuts piled in to equities and other assets seen as benefiting from looser monetary policy. That has left the S&P 500 trading at over 21 times forward earnings, well above its long-term average of 15.7 times. The index has climbed 20% this year, even as U.S. employment growth has been weaker than expected in recent months.As a result, the near-term “upside from just lower rates is somewhat limited,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management. “People just get a little bit nervous around being up 20% in an environment where the economy has cooled.”Other valuation measures, including price-to-book value and price-to-sales, also show stocks are well above their historic averages, Societe Generale analysts said in a note. U.S. equities are trading at five times their book value, for instance, compared with a long-term average of 2.6.”The current levels can be summarized in one word: expensive,” SocGen said.Lower rates stand to help stocks in several ways. Reduced borrowing costs are expected to increase economic activity, which can strengthen corporate earnings.A drop in rates also reduces yields on cash and fixed income, diminishing them as investment competition to equities. The yield on the benchmark 10-year Treasury has dropped about a full percentage point since April, to 3.7%, although it has ticked up this week.Lower rates also mean future corporate cash flows are more attractive, which often boosts valuations. But the P/E ratio for the S&P 500 has already rebounded substantially after falling as low as 15.3 in late 2022 and 17.3 in late 2023, according to LSEG Datastream.”Equity valuations were pretty reasonably full going into this,” said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. “It’s going to be hard to replicate the multiple expansion you just got over the last year or two over the next couple of years.”With any further increases in valuation expected to be limited, Miskin and others said earnings and economic growth will be key stock market drivers. S&P 500 earnings are expected to rise 10.1% in 2024 and another 15% next year, according to LSEG IBES, with third-quarter earnings season starting next month set to test valuations.At the same time, there are signs that the promise of lower rates may have already drawn investors. While the S&P 500 has tended to be flat in the 12 months leading up to rate-cutting cycles, it is up nearly 27% in that period this time around, according to Jim Reid, Deutsche Bank’s global head of macro and thematic research, who studied data since 1957.”You could argue that some of a potential ‘no recession easing cycle’ gains have been borrowed from the future this time,” Reid said in the note.To be sure, plenty of investors are undeterred by the elevated valuations and maintain a positive outlook for stocks.Valuations tend to be an unwieldy tool in determining when to buy and sell stocks – especially since momentum can keep markets rising or falling for months before they revert to their historical averages. The forward P/E ratio for the S&P 500 was above 22 times for much of 2020 and 2021 and reached 25 during the dotcom bubble in 1999.Meanwhile, rate cuts near market highs tend to bode well for stocks a year later. The Fed has cut rates 20 times since 1980 when the S&P 500 was within 2% of an all-time high, according to Ryan Detrick, chief market strategist at Carson Group. The index has been higher a year later every time, with an average gain of 13.9%, Detrick said.”Historically, equity markets have performed well in periods when the Fed was cutting rates while the US economy was not in recession,” UBS Global Wealth Management analysts said in a note. “We expect this time to be no exception.”(Reporting by Lewis Krauskopf in New York; Editing by Ira Iosebashvili and Matthew Lewis) Continue reading →

Gold may be surging higher after breaking out from a huge five-month base, but I think the probability of gold seeing a sustained pullback from these levels has increased dramatically. Continue reading →

John Paulson.Rob Kim / Getty ImagesJohn Paulson will sell his stocks and buy gold if Kamala Harris wins the presidency.The Trump-supporting hedge fund billionaire criticized Harris’ tax plans on a Fox Business segment.Paulson said a proposed tax on unrealized gains would “cause mass selling of almost everything.”Billionaire hedge fund manager and Trump donor John Paulson told Fox Business that he will sell his stocks if Kamala Harris wins the presidency in November.”I’d go into cash and I’d go into gold because I think the uncertainty regarding the plans they outlined would create a lot of uncertainty in the markets and likely lower markets,” Paulson said on “The Claman Countdown.”Paulson was particularly focused on Harris’ proposal to levy a 25% tax on unrealized gains for individuals worth more than $100 million. He says such a measure could trigger major asset-dumping across the economy, and broader catastrophe for markets.”If they do implement a 25% tax on unrealized gains, that would cause mass selling of almost everything: stocks, bonds, homes, art,” Paulson said. “I think it would result in a crash in the markets and an immediate, pretty quick recession.”Despite Paulson’s gloomy view of the policy, the specifics of Harris’ proposal have not yet been confirmed. Kent Smetters, the faculty director of the Penn Wharton Budget Model, told Business Insider recently that he’s only been able to confirm two firm policies.The first is a bump up in corporate tax from 21% to 28%, and the second is an increase to the top rate for long-term capital gains to 28% for those making above $1 million. Much of the rest is hearsay based on media discussions with sources or a belief that she will take on Biden policies, he noted.Meanwhile, former president Donald Trump has indicated that he would extend the Tax Cut and Jobs Act, which is set to expire in 2025. The legislation lowered the corporate tax to 21%, and Paulson characterized it as “very successful.”Not every wealthy taxpayer is siding with Trump.Billionaire Mark Cuban took to X, formerly Twitter, to compare how businesses would do between Harris’ tax policy and Trump’s plans for broad-sweeping tariffs, concluding that Harris would offer more in after-tax profit.Further, many on Wall Street have scrutinized Trump’s tariff idea, fearing it could spark higher inflation and trigger trade wars. The Republican candidate has pledged to apply 10% tariffs on all US trade, and even suggested replacing the income tax with duties.Paulson sees tariffs as an effective strategy, telling Fox Business that it would be a powerful way to boost revenue.Read the original article on Business Insider Continue reading →

This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:Gold might be hitting record highs, but silver is starting to turn investors’ heads once again.The metal — at once precious and industrial — has surged for four straight days, poking above $31 per ounce for the first time since July.While the 10% gain this week is already the best since the early pandemic days of August 2020 — and is enough to secure a two-month high — investors likely have their sights set much higher.There are a few reasons why the second-place metal has potential. First, silver has slightly outperformed gold this year, but gold prices are still elevated with respect to silver on a historical basis when looking at the so-called gold-silver ratio.When the multiple of gold to silver reaches 80, many investors will look for buying opportunities in silver, betting that the ratio will mean revert. Currently, it stands at 84 but was above 90 only weeks ago as gold was surging. According to DataTrek’s Nicholas Colas, the historical average of the ratio since 1990 is 70, which means silver has room to run long-term versus gold.Technical analysis of silver prices also reveals long-term pent-up bullish potential, and the two looming peaks in silver’s history at about $50 per ounce could act as magnets for a breakout.Silver prices surged and shook the investing world in 1980 when Nelson Bunker Hunt, William Herbert Hunt, and Lamar Hunt attempted to corner the market on silver. The Hunt Brothers’ market manipulation scheme succeeded in inflating prices by 700% after they acquired about one-third of the world’s silver supply.The trade ended in tears for the brothers, but the price target had been set.After plummeting to $3 in the 1990s, silver mounted another rally as the global financial crisis kicked into high gear in the late oughts.Amid the QE 1 and 2 boom years, silver futures hit another peak just shy of $50 per ounce in April 2011 — an appreciation of nearly 170% over the prior year.Since that second trip to $50, the price again fell and has rallied in fits and starts. The pandemic sparked a rally in 2020 that took silver to $30, and this year, it’s managed to cross the $32 mark.According to Goldman Sachs, $32 is the big level to watch for silver, which the bank said is “on the verge of a multi-month breakout.” The bank also noted that options on the iShares Silver Trust (SLV) had one of the biggest volume days in years last Friday.The bank cited Federal Reserve monetary policy on the verge of its first rate cut in years. But the real appeal may lie with the evolving demand for artificial intelligence, as silver is critical for chip fabrication. Silver investors will be closely monitoring how chip demand evolves this earnings season.Yet another market narrative about Fed rates and AI.morning brief imageClick here for the latest stock market news and in-depth analysis, including events that move stocksRead the latest financial and business news from Yahoo Finance Continue reading →

US stocks were little changed on Wednesday as investors braced for the Federal Reserve’s long-awaited policy decision, with the market still divided on the size of the expected rate cut.The tech-heavy Nasdaq Composite (^IXIC) rose about 0.1%. The S&P 500 (^GSPC) was just above the flat line, while the Dow Jones Industrial Average (^DJI) slipped 0.1%.Stocks are ticking over as the market waits to find out how aggressive the Fed will be when it makes its first US interest rate cut since 2020 at the end of its meeting later Wednesday.The significant policy shift is widely expected, given growing signs that the central bank has managed to cool inflation without severe harm to the economy. But investors are still guessing at whether hopes for a 0.5% cut will be fulfilled or the historic pattern of 0.25% moves will repeat itself.Read more: Fed predictions for 2024: What experts say about the possibility of a rate cutIn recent days, traders have stepped up bets on a bigger cut even after Fed officials earlier in September flagged they were more likely to trim the benchmark rate by 25 basis points. As of Wednesday morning, fed funds futures were pricing in a better than 60% chance the Fed goes large, up from just 15% odds a week ago.Wall Street sees stock, bond, and currency markets as vulnerable to swings in the immediate aftermath of the Fed’s decision, seen as the least predictable in years.Intense focus is also on the Fed’s new interest rate projections, an indication of how many rate cuts officials expect to see in the rest of 2024 and in 2025. The so-called dot plot will come when the Fed releases its policy decision at 2 p.m. ET.Meanwhile, investors absorbed developments in the tech sector. Microsoft (MSFT) and BlackRock (BLK) are teaming up on an effort to raise $30 billion to build out AI infrastructure, while Google parent Alphabet (GOOG, GOOGL) won its bid to overturn a $1.7 billion EU antitrust fine related to digital ads.Live4 updatesWed, September 18, 2024 at 9:32 AM EDTStocks waver at the openStocks were little changed at the open on Wednesday as investors patiently await the Federal Reserve’s next monetary policy decision at 2 p.m. ET.As debate swirls whether the Fed will cut interest rates by 25 or 50 basis points, the three major indexes appeared to be in wait-and-see mode.Wed, September 18, 2024 at 8:57 AM EDTHousing starts jumped in August amid declining mortgage ratesNew residential construction increased in August as mortgage rates continued their decline.Housing starts rose 9.6% from the previous month to a seasonally adjusted annual pace of 1.356 million units, according to data from the Census Bureau released Wednesday. Single-family housing starts soared 15.8% to a seasonally adjusted annual pace of 992,000.The data comes as homebuilders feel more confident about the housing market. Mortgage rates are at their lowest level in over a year. Rates have been on a downward trend recently, with investors expecting the Fed to announce an interest-rate cut at the conclusion of its policy meeting later Wednesday.The data showed that building permits for single family homes rose to a pace of 967,000, a 2.8% increase from July’s revised figure of 941,000. Meanwhile, permits for multifamily came in at a rate of 451,000 in August.Wed, September 18, 2024 at 8:52 AM EDTDimon says the rate cut debate is overrated JPMorgan Chase (JPM) CEO Jamie Dimon told a conference on Tuesday that any interest rate move by the Fed would “not going to be earth-shattering,” arguing that “it’s a minor thing when the Fed’s raising rates and lowering rates because underneath that there’s a real economy.”The comments follow Dimon telling CNBC last month that when it comes to the debate about how much the Fed cuts interest rates, “I don’t think it matters as much as other people think. You know, the rate effect itself isn’t that critical.”Wed, September 18, 2024 at 8:45 AM EDT’The Fed cutting by 50 basis points is a real possibility’From Yahoo Finance’s Jennifer Schonberger:”The Federal Reserve is widely expected to cut interest rates for the first time in four years Wednesday and outline the path for future rate cuts.Investors have been hoping for a larger half-percentage-point cut versus a quarter-point cut. Traders, in recent days, have increased their wager that the central bank will cut by a deeper 50 basis points. Wednesday morning, fed funds futures were pricing in a better than 60% chance the Fed cuts by 50 basis points, up from just 15% odds a week ago.’The Fed cutting by 50 basis points is a real possibility,’ said Wilmer Stith, a bond trader for Wilmington Trust, who just last week thought it was more likely the central bank could cut by 25 basis points. He’s on the fence, though, as to whether it actually happens.”Read the full story > Continue reading →

I want to start this article with a little background about Elliott Wave analysis, and begin with a quote from Paul Tudor Jones, one of the most successful money managers of all time:

“I attribute a lot of my success to Elliot Wave Theory. It allows one to create incredibly favorable risk reward opportunities”

Back in the 1930’s, an accountant named Ralph Nelson Elliott identified that markets represent unconscious, non-rational reactions which follow a repeating fractal pattern, which means they move in variably self-similar patterns at all degree of trends.  This repeating fractal pattern represents overall societal sentiment which is governed by the natural law of the universe as represented through Fibonacci Mathematics.  

Now, to be clear, people often mistake what I am saying as meaning that the patterns are what drive society.  But, the truth is that the patterns represent the social mood of society en masse, and it is the societal sentiment that causes these fractal patterns we see in the market.

Most specifically, Elliott theorized that public sentiment and mass psychology move in 5 waves within a primary trend, and 3 waves within a counter-trend.  

Once a 5 wave move in public sentiment has completed, then it is time for the subconscious sentiment of the public to shift in the opposite direction, which is simply the natural cycle within the human psyche, and not the operative effect of some form of “news.”

Also, take note that waves 1, 3 and 5 move in the direction of the general trend, and waves 2 and 4 are counter-trend moves.  Moreover, take note that waves 1, 3 and 5 further break down into 5-wave structures – which I show as an example within the 3rd wave –  whereas the corrective, counter-trend moves of waves 2 and 4 break down into 3-wave structures.

Now, I want you to take note that the segment one would want to trade is the heart of a 3rd wave, as they are the strongest segments of a rally in equities.  And, while 3rd waves are still very strong in metals, their 5th waves are even stronger.

So, as an investor, you want to be layering into a market as a 3rd wave is about to begin.  If you look at the chart above, the set up you are seeking is a i-ii, 1-2 structure, wherein you can move into the market during the wave 2 pullback, so you are prepared for the wave 3 of iii.

Silver is now developing a structure within its wave 2. The only question I have is if silver has begun its 3rd wave, or if there is one more drop to complete its wave 2 before the heart of the 3rd wave begins in earnest.

I will not bore you with the mathematical details as to how I calculated the resistance, but 31.73 is coming up as a very strong point for me over the coming week. Unless silver is able to blow through that resistance, we have a set up in place that can take silver down quite strongly over the coming weeks towards the 23.75-26.72 region to complete its 2nd wave. 

Of course, if silver can blow through the 31.73 region and continue through 33.35, then we are on our way to our next target in the 37.25-40 region, and also on our way to much higher targets after another smaller pullback from that higher target region.

Taking a step back, I want this to be a lesson to anyone utilizing Elliott Wave analysis to its most powerful end.  You must be as objective as possible when analyzing the charts you are trading.  While it is so easy to simply just view the path you would most prefer due to a bias you have derived, whether that be due to having money invested in that particular direction or from some fundamental perspective, it is absolutely imperative to always be analyzing the other side of the market to understand where and how you can be wrong in your assessment.  And, when there are levels that line up in an almost perfectly overlapping manner, you must take notice and recognize it as more than just a small probability that the market is presenting.

So, I would be watching your positions in silver over the coming week or two, as one more decline can still take shape before we are ready for the major break out. Continue reading →

(Bloomberg) — Stocks struggled near their all-time highs ahead of the Federal Reserve rate decision, with traders split on the size of a central bank cut.Most Read from BloombergThe S&P 500 was little changed after briefly crossing the threshold of its record amid a surprise increase in US retail sales. Treasury yields edged up, with shorter maturities leading the move. The market-implied odds that policymakers announce a 50-basis-point rate reduction on Wednesday were around 55%. Traders have fully priced in a full quarter-point worth of easing.A survey conducted by 22V Research showed that expectations for the market reaction to the Fed decision are dependent on expectations for the size of the cut. Investors who expect a 25 basis-point cut are split on whether that cut will deliver a “risk-on” or “risk-off” reaction. Investors who expect a 50 basis-point reduction cut think a smaller cut will have a “risk-off” market reaction.The Fed will either cut 50 basis points or opt for a 25 basis-point reduction, but signal that they will be more aggressive going forward, according to Matt Maley at Miller Tabak.Still, he says, that does not guarantee that the stock market and/or bond market will rally in a meaningful way. Maley says the Fed will likely try to convey that a more dovish stance is not seen as something that means they’re suddenly worried about an imminent recession.“Therefore, given that the stock market is approaching overbought territory, we could still get a ‘sell the news’ reaction to the Fed this week,” he added.The S&P 500 hovered near 5,630. The Nasdaq 100 was little changed. The Dow Jones Industrial Average fluctuated. The Russell 2000 of smaller firms gained 0.8%. Treasury 10-year yields advanced three basis points to 3.65%. The dollar rose.Right or wrong, market expectations were already shifting toward a 50 basis point Fed cut this week, according to Chris Larkin at E*Trade from Morgan Stanley.“The stronger-than-anticipated headline retail sales number seemed to support that outlook, but the report’s fine print presented a more mixed picture,” Larkin said. “This data isn’t going to decide the issue for the Fed, one way or the other.”That said, we’re not out of the woods quite yet, according to Bret Kenwell at eToro.“There are reasons to be concerned about the labor market, and while the consumer is holding on enough to beat economists’ expectations, the results are not necessarily pointing to a consumer that is thriving,” he said.The US economy remains on track for a soft landing, and the recent economic data are consistent with our view that the recession fears that triggered the early August selloff were overdone, according to Solita Marcelli at UBS Global Wealth Management.“While we believe equity gains will broaden out, we also think there is room for growth stocks, in particular technology stocks, to rise further,” she said.Marcelli also noted that while Fed rate cuts in non-recessionary periods have historically been favorable for equities overall, they also make growth stocks more attractive as lower rates increase the present value of these companies’ future cash flows.Corporate Highlights:Microsoft Corp. raised its quarterly dividend 10% and unveiled a new $60 billion stock-buyback program, matching the size of a repurchase plan three years ago.Intel Corp. made a raft of announcements, spurring optimism that the chipmaker’s turnaround plan is starting to bear fruit.Newmont Corp., the world’s biggest gold miner, said it’s on track to raise $2 billion — if not more — from selling smaller mines and development projects.Reckitt Benckiser Group Plc has started early discussions with some of the potential suitors for its homecare assets, which could fetch more than £6 billion ($7.9 billion) in a deal, according to people familiar with the matter.Continental AG is pushing ahead with preparations for a separation of its struggling car parts business, even as it grapples with recalls related to faulty braking systems it supplied, according to people familiar with the matter.Key events this week:Eurozone CPI, WednesdayFed rate decision, WednesdayUK rate decision, ThursdayUS US Conf. Board leading index, initial jobless claims, US existing home sales, ThursdayFedEx earnings, ThursdayJapan rate decision, FridayEurozone consumer confidence, FridaySome of the main moves in markets:StocksThe S&P 500 was little changed as of 1:28 p.m. New York timeThe Nasdaq 100 was little changedThe Dow Jones Industrial Average was little changedThe MSCI World Index was little changedThe Russell 2000 Index rose 0.8%CurrenciesThe Bloomberg Dollar Spot Index rose 0.2%The euro fell 0.1% to $1.1117The British pound fell 0.5% to $1.3156The Japanese yen fell 0.9% to 141.89 per dollarCryptocurrenciesBitcoin rose 5.7% to $60,948.16Ether rose 4.4% to $2,374.08BondsThe yield on 10-year Treasuries advanced three basis points to 3.64%Germany’s 10-year yield advanced two basis points to 2.14%Britain’s 10-year yield advanced one basis point to 3.77%CommoditiesWest Texas Intermediate crude rose 2.2% to $71.60 a barrelSpot gold fell 0.6% to $2,565.93 an ounceThis story was produced with the assistance of Bloomberg Automation.Most Read from Bloomberg Businessweek©2024 Bloomberg L.P. 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“The Fed should act in the way that the data indicates that they should act. Period,” said Rep. Patrick McHenry, R-N.C., chair of the House Financial Services Committee.
Democratic Sens. Elizabeth Warren of Massachusetts, John Hickenlooper of Colorado and Sheldon Whitehouse of Rhode Island have called for the Fed to cut its benchmark rate by three-quarters of a percentage point, which is higher than the most aggressive market expectations.
Former President Donald Trump said in an August press conference that he believes he should get a say on monetary policy if he wins in November.

U.S. Rep. Patrick McHenry, R-N.C., speaks to members of the media outside the office of U.S. House Speaker Kevin McCarthy, R-Calif., at the U.S. Capitol in Washington on Oct. 3, 2023.
Mandel Ngan | AFP | Getty Images

Rep. Patrick McHenry, R-N.C., sharply criticized other politicians on Tuesday for making public comments about what the Federal Reserve should do with its interest rate policy.
McHenry, the outgoing chair of the House Financial Services Committee, said it was an ‘”outrage” that some politicians are publicly lobbying the central bank about rate cuts.

“The outrage to me is … for instance, if you’re on the right, you say the Fed should be independent, except I think right now they should do this. And on the left, the same,” said McHenry, who is retiring from Congress at the end of this term.
“Senators that are trying to direct the Fed on rate policy are really demeaning their role. … They’re demeaning their role as a United States Senator,” he added.
McHenry’s comments came one day before the U.S. central bank is widely expected to start cutting interest rates for the first time since 2020. Coming in the middle of a presidential election cycle, the change in Fed policy has stirred speculation as to whether the central bank would be influenced by political considerations. Chair Jerome Powell, first appointed by Trump and reappointed by President Joe Biden, has repeatedly denied that is a factor.
On Monday, Democratic Sens. Elizabeth Warren of Massachusetts, John Hickenlooper of Colorado and Sheldon Whitehouse of Rhode Island called for the Fed to cut its benchmark lending rate by 0.75 percentage points, which is higher than the most aggressive market expectations. Warren and Whitehouse are both running for reelection in November, while Hickenlooper’s term ends in 2026.
Republicans who have weighed in include former President Trump, who said in an August press conference that he believes he should get a say on monetary policy if he wins in November. Sen. Mike Lee, R-Utah, also introduced a bill earlier this year that would abolish the Fed.

When asked about Trump’s remarks, McHenry said “all presidents think they should give an input” but that the central bankers should ignore statements from politicians.
“The Fed should act in the way that the data indicates that they should act. Period,” McHenry said.
The remarks came at a conference hosted by Georgetown University’s Psaros Center for Financial Markets and Policy.

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