Wednesday, October 18, 2017
'Cutting debt does not mean cutting growth'Tuo Zhen, spokesman for the 19th National Congress of the Communist Party of China, said on Tuesday that reducing debt and stabilizing economic growth are not contradictory policies. "In the long run, deleveraging will help remove hidden risks that will affect steady and healthy economic development and strengthen medium- and long-term economic resilience," Tuo said.
Baidu to hit the road with self-driving busBaidu chief executive Robin Li on Tuesday said the Chinese internet giant will have a self-driving bus on the road soon as it races for a lead in autonomous vehicles. Baidu is collaborating with an array of companies on autonomous cars, and is working with a large bus maker in China to have a self-driving bus running a route by next year, Li said in an on-stage interview late Tuesday at The Wall Street Journal D.Live conference in Laguna Beach, California.
Doubts Growing US Will Always Defend Asian AlliesIn South Korea and Japan there is increasing support for the deployment of nuclear weapons to defend against the growing North Korean threat, and due to public concern that the U.S. may no longer be counted on to aid allies with extended nuclear deterrence.
Tesla modifies models for ChinaUS carmaker will retrofit charging network, adapting to local standards BEIJING－Tesla Inc is modifying new cars delivered to China and retrofitting the charging network in the country to comply with domestic norms, a move that could boost its sales in the world's largest electric...
Tuesday, October 17, 2017
Gold Market Update
By: Clive Maund
The last update called for the dollar to drop down to mark out the Right Shoulder of a Head-and-Shoulders bottom pattern, and for gold to break out of its rather steep intermediate downtrend and rally, and that is exactly what has since happened. On its latest 8-month chart, we can see how the dollar has backed off to the vicinity of its flattened out 50-day moving average and the vicinity of the Left Shoulder low of the base pattern, in order to mark out the Right Shoulder low. Three bullish developments to be noted that result from the dollar rising out of the Head of the pattern are the breakout from the downtrend, the break clear above the 50-day moving average, and the big improvement in momentum (MACD), which is swinging positive. If our interpretation that this is a genuine Head-and-Shoulders bottom is proven valid, the pattern targets the 97 area in coming weeks, probably by early November. Needless to say, this will not be good news for gold and silver prices.
Our prediction made many weeks ago that the dollar would rally off the lower boundary of its big bullhorn pattern shown on the 4-year chart below to break out above its restraining Dome has proven to be correct, and a projection has been drawn on this chart showing roughly what is expected to happen. As we saw above on the 8-month chart, the base pattern now approaching completion targets the 97 area approx. This is the “swansong rally” – the dollar’s last rally before it “hands in its dinner pail”, and should present a wonderful last opportunity to accumulate the better gold and silver stocks, before the dollar does an about face, and breaks down from the large Broadening Top pattern into a severe decline.
The Hedgers chart has been warning for weeks that the dollar will reverse and rally, as has been pointed out repeatedly. The latest chart shows the rally is still ahead of us – which is congruent with the dollar being at the Right Shoulder low of its Head-and-Shoulders bottom.
Click on chart to popup a larger clearer version.
Chart courtesy of www.sentimentrader.com
In light of the above it is logical to expect gold’s plucky little breakout from the steep downtrend channel shown on its 6-month chart below to abort, and if the dollar advances towards the 97 area on the index, we would expect gold to react back, probably to the $1200 - $1215 area.
Such a reaction back by gold accords with its latest COT chart, which still looks more bearish than bullish, since gold’s COT structure improved but little on its recent downtrend. There is still a lot of room for improvement on this chart – and that probably means lower gold prices dead ahead…
Click on chart to popup a larger clearer version.
On gold’s 8-year chart it continues to look like it is in the late stages of a giant Head-and-Shoulders bottom pattern. The buildup in volume over the past 20 months certainly looks positive, especially over the past several months, all the more so because it has driven volume indicators higher, notably the Accum-Distrib line, which is not far off making new highs – exceeding its level at the 2011 peak. Once gold breaks above the resistance level approaching $1400 it will be on its way, although it will then have to contend with another important band of resistance in the $1510 - $1560 range. A near-term retreat by gold to the $1200 - $1215 area in the face of a dollar rally will not damage this long-term technical picture.
The Market Vectors Gold Miners, GDX, which functions as a gold stocks index, is marking out a giant Head-and-Shoulders bottom that roughly parallels the one completing in gold itself. A near-term decline to $20 - $21 in GDX will be viewed as presenting another important buying opportunity for the sector. The volume pattern during the build out of this base pattern is very bullish, with big volume on the rise out of the low (Head) of the pattern, tailing off steadily as the Right Shoulder has formed.
A mistake commonly made by gold and silver bugs, especially those close to or involved in the mining industry is to become “wed” to the sector to the exclusion of most everything else. This habit has ruined a good many investors in the Precious Metals sector in recent years. Investing should be regarded as an “opportunity cost game”, where you seek always to maximize your returns within a given timeframe consistent with an acceptable level of risk. This is the philosophy on clivemaund.com which is why we made a detour into the marijuana sector last year ahead of the legalization votes, when it boomed, and why we have invested in a variety of different sectors and stocks this year, notably the Biotech and Medical sector. There is no need to wait around on the Precious Metals sector to start a major uptrend, when, apart from individual outstanding opportunities in the sector than can occur at any time, it is possible to go with whatever is performing in the here and now.
We have had a number of outstanding successes in recent months and weeks where we traded on the basis of some very clear and useful chart patterns and signals, and a number of our stocks have produced some classic examples of chart patterns involving different types of candlesticks and price and volume patterns, often in combination, in the recent past. There is one in particular that I would like to draw your attention to in CHART SCHOOL – Gravestone Doji and Parabolic Blowoff calls a top, where just on the one chart going back 4-months we see a dramatic confluence of different factors – candlesticks, parabolic slingshot, various oscillators and the volume pattern all calling a top RIGHT NOW for a particular stock, and this also provides examples of breakaway gaps and a Flag. We sold this stock on Friday. To take a look at its chart, all you have to do is click on the link above, and for a good measure a couple of other interesting chart examples that we traded are included in this article, which is intended to be educational.
Hope you like what you see…
Monday, October 16, 2017
Kobe Steel, Nissan scandals tarnish image of Japan IncEmbarrassing scandals at Kobe Steel and Nissan have tarnished the reputation of Japan Inc for quality, as once-mighty industrial world-beaters battle fierce global competition and shrinking profit margins.
US-world divide spills out at IMF-World Bank meetingsThe growing split between the United States and the rest of the world spilled into the annual meetings of the International Monetary Fund and World Bank in Washington this week. The US administration showed a diminished view of the Bretton Woods institutions that shaped a US-led order after World War II, rejecting efforts to expand their activities, and defending its attack on free trade pacts as part of President Donald Trump's "America First" agenda.
Sunday Stroll Through The Index Park
Based on what I saw during my visit last night, Disneyland’s newest ride is the Leap Over an Opioid Addict attraction just outside the park. They were all white males around thirty years old or so, sprawled out on the ground. At least it was more engaging than the boring Monsters Inc. ride inside the park itself.
But that’s not why we’re here. It’s a Sunday morning, and I’m out of posts (except for one waiting in the wings for the appropriate afternoon), so I’ll cobble one together. It isn’t easy, though. See, here’s what a normal market looks like:
Volatile. Opportunity-rich. A roller coaster of price discovery. The above chart is the ETF for the small caps, symbol IWM. Here’s the exact same market recently:
Ummm. I don’t think “boring” is strong enough a word.
Of course, about a month ago, it seemed things wouldn’t be boring anymore, what with the excitement around yet another war and possibly nuclear missiles flying around. And where was Ground Zero for all this potential glassing of the earth? South Korea! And how terrified is South Korea about such a catastrophe? See for yourself!
Looks awfully bullish to me, wouldn’t you say? The above is the Kospi 200 Index, and as it leaps from lifetime high to lifetime high, it sounds like the equity markets (around the world, actually) are declaring Kim Jung Un to be full of pudding and rib eye, but little else of note.
Sticking around that Asian neighborhood, however, it seems to me that Jakarta’s own equity market is looking awfully terminal vis a vis its triangle.
And, looking northward to Hong Kong, its broad equity market has already broken its long-term trendline. The importance of this trendline is affirmed by the creepily obedient price behavior beneath the now-broken trendline, as its role has switched from support to resistance.
OK, let’s fly thousands of miles westward to Europe. Check out the Amsterdam Index (thank you, SlopeCharts!) As with Jakarta, the pattern is well-formed and extremely high in the context of its long-term behavior.
OK, enough of these zany markets none of us trade. I’m far more interested in the MidCap 400, against which I have March 2018 puts. I would submit to you that the resisting trendline is red, having held for so long, is a formidable foe to further upside.
Looking closer, you can see there’s easily 100 points of downside even without breaking medium-range support, let alone actually getting hit with a true trend change.
It would seem poetic to me if, in the broadest of views, the markets adhered to the Fibonacci retracements that I’ve been watching. Admittedly, the S&P 500 has exceeded my 161.8% target, but not by much………three-tenths of a single percent right now. The Dow, on the other hand, hasn’t crossed its line yet, and observing the prior two bull market peaks, it would seem fitting, as I just suggested, so this third bubble (which is the “everything” bubble) to terminate at this newest and highest of horizontals.
China retains No 1 spot in renewable energyChina continues to be the world's most favorable market for renewable energy development and investment, according to a new study. The Renewable Energy Country Attractiveness Index, which is compiled twice a year by London-based financial services firm EY - formerly known as Ernst and Young - highlighted the large quantities of public and private funds pouring into renewable power projects in China, as well as several energy-efficiency policies.
US rejects French proposal on taxing tech companiesThe United States does not support a French proposal to tax the gross revenues of international tech corporations like Google and Amazon, Treasury Secretary Steven Mnuchin said Saturday. The remarks come as European officials say Washington has softened in recent days on a point that has caused sharp transatlantic tensions in recent years.
Sunday, October 15, 2017
Trade gains in double digits seen for this yearGrowth of China's imports and exports is expected to see double-digit gains this year, thanks to rising demand as a result of improvement in the domestic and global economies, the General Administration of Customs said on Friday.
Futuristic solar-powered Dutch family car hailed 'the future'A futuristic Dutch family car that not only uses the sun as power but supplies energy back to the grid was hailed as "the future" Sunday as the World Solar Challenge wrapped up. The innovative bi-annual contest, first run in 1987, began in Darwin a week ago with 41 vehicles setting off on a 3,000-kilometre (1,860-mile) trip through the heart of Australia to Adelaide.
More legal talent needed to navigate Belt, Road challengesChina must boost its cultivation of legal talent as the country forges ahead with the Belt and Road Initiative, according to experts at a seminar in Beijing. "Professionals with good legal and economic knowledge and language skills are in huge demand," said Zhang Yuejiao, a former judge with the World Trade Organization's Appellate Body.
Friday, October 13, 2017
Trump Will Speak At a Hate Group EventPresident Donald Trump will be the first sitting president to address the Family Research Council’s Values Voter Summit, which the Southern Poverty Law Center (SPLC) described as a “rogues' gallery of the radical right.”
It's difficult to describe a stock as "sexy" but miner Gran Colombia Gold (GCM.TO) is putting in a very attractive looking bullish declining wedge which is a pattern I've always had a strong affinity for. Given the uncertainty and previous comments of the U.S. dollar recently, a bounce in gold and gold related services is to be expected. My momentum indicators are all very positive and the traces are all above the EMA(34). I'm anticipating a bounce off of the EMA(34) which I think will be good for at least a near-term trade. Please be careful though as this and many other equities are quite deviated from their mean making this quite risky.