Before the Bell
Trump's immigration ban awaits San Francisco ruling. Crude drops as U.S. production is predicted to reach 48-year high, and metals are rallying, with Copper leading this morning up 4 cents at $2.6730 last..
China Pattern in Metals
De-dollarize via buying non perishable commodities, weaken the yuan, then when retail panics and causes a spike, raise margins to punish the public. The US doesn't play that game ( as obviously).
Meanwhile Gold is up again despite a strong USD. For perspective, the USD was very strong yesterday morning, and dumped near EOD, but retained some gains. We are seeing a revaluation of Gold vs the Dollar again. Perhaps on its own merits, perhaps on EU uncertainty. If the former, then it will hold. If the latter, then once EU perception changes, get ready for a Gold correction. Gold is NOT overbought by any means on the weekly chart. And the USD is near a double (h/t TDOK's Bondskew for analysis) top. Watch and trade accordingly. It may be time to drag out the Broccoli man video teaching Gold players to BTD as he educated the intelligent yet idiotic over the last 8 years in stocks. Daily drivers for Gold HERE
Interactive Chart HERE
The crude oil build is ridiculous considering the OPEC agreement. It is almost as if the number is off by a decimal point. And to our experienced eye it says
the OPEC countries like Iran were pumping and filling barges pre-deal in hopes they could dock after the deal and sell at higher prices.
That and cartels don't work when half the production is not bound by the deal, like Russia.
Stocks. - Don't Be Stupid
Who cares? BTD. Seriously: ignore the vix, the market's easiest path is higher especially given that the likelihood of a Fed hike soon has diminished. The Vix is not a directional indicator never has been. So CNBC, FOB, stocktwits are idiots on this matter. Ask if you want to learn why, but it will cost you. Or Google skewness and leptokurtosis. If stocks rally and Job reports come in crappy, then the Fed does nothing. If stocks dive, then the Fed unleashes the QE4 Kracken. Just buy the dip. And don't forget to sell the rally and reallocate money into physical assets like China is.-Soren K.