ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
First, Bernanke made it clear he thinks gold is not a good indicator of inflation expectations. Now, the Federal Reserve Bank of San Francisco has produced research that could convince the Fed to insulate itself from the inflation expectations of average Americans in “Household Inflation Expectations and the Price of Oil: It’s Déjà Vu All … Read more
The Reserve Bank of Australia (RBA) released its minutes from its last board meeting, May 3. I reviewed these minutes curious to understand the bank’s expectations for commodity prices given the on-going sell-off in commodities. The meeting occurred just as commodities started their current sell-off, so these pressures were not salient at the time. However, … Read more
Originally posted on “Inflation Watch“… Nightly Business Report produced a short video segment describing China’s inflation woes (transcript included) called “China’s Inflation Battle.” The commentator identifies China’s RMB¥ 4 trillion stimulus program (around $585B USD at the time) as the original source of the inflation and takes us to Pengshui, 1000 miles from Beijing, to … Read more
What has changed in the two months it took for silver to stampede its way up $15 (a 43% gain) and back? Did the Federal Reserve raise rates? Did the Federal Reserve threaten the market with rate hikes? Did the housing market rebound sharply, generating an expectation for higher rates? Did inflation expectations adjust sharply? … Read more
Gold Luring Central-Bank Buyers May Extend Record Rally – Bloomberg Central banks that were net sellers of gold a decade ago are buying the precious metal to reduce their reliance on the dollar as a reserve currency, signaling demand that may extend a record rally in prices. (tags: gold monetary_policy central_banks) Adjusted For Inflation, Dollar … Read more
Dangerous Views of Volatility: Pay attention to the VIX, but don't just follow the crowd – Barrons.com The market remains schizophrenic. One day, stock prices tumble because Standard & Poor's questions the credit rating of the United States, and investors panic and sell and fret, and the front pages of many newspapers are apocalyptic. The … Read more
(The following news release is satire and reflects my own cynical interpretation of recent news events. But as they say, there is always some truth in humor.) On Thursday, Attorney General Eric Holder introduced the country to the Oil and Gas Price Fraud Working Group to “…focus specifically on fraud in the energy markets” by … Read more
In late February, I lamented that TBT, the Pro Shares UltraShort 20+ Year Treasury ETF, was careening toward a retest of the 200-day moving average (DMA) that it would lose. After three more weeks, the anticipated retest finally occurred, and TBT survived. *Chart created using TeleChart: The retest of the 200DMA was a great reminder … Read more
Buyers are again lifting the stock market from its intra-day lows and providing some potential clues on where to draw the bull/bear lines from a technical perspective. The case for a bullish setup is relatively strong: Three days of high volume selling is washing out sellers. 50-day moving average (DMA) essentially successfully retested, leaving primary … Read more
Coffee prices have soared along with most other commodities over the past year and more. For example, the iPath Dow Jones-UBS Coffee Total Return Sub-Index ETN (aka JO) is up 70% since the end of 2009. The last earnings results from Starbucks (SBUX) demonstrated the stress from these higher coffee prices. The company slightly lowered … Read more