The Alternative Investor
  • Home
  • TRADING BLOG
  • Current Positions
  • Alternative Investor Strategy
  • ETFs
  • About Alternative Investor
  • Contact

Trading Blog         Wednesday,  November 20,  2013

11/20/2013

 
MARKETS UPDATE and GOLD AND SILVER ALERT  (10:45 pm EST)

My last blog (on Sunday night) in which I bemoaned the difficulty of trading financial markets that are being manipulated has turned out to be prophetic as today's precious metal prices dropped dramatically in part due to 1,500 gold future contracts being traded on Comex in one second early this morning (Wednesday) at 6:26 am EST.  This triggered an immediate $10 drop in price and halted trading for 20 seconds.  Mark O'Bryne, executive director at GoldCore stated today (as reported on MarketWatch.com) that, "Some entity appeared determined to get the gold prices lower and they succeeded - for now."   He further stated, "Such trading action makes traders on the Comex very nervous to go long and prevents gold getting some momentum and animal spirits."  After the $10 drop, gold prices were stable until later in the afternoon when the minutes of the Federal Reserve's recent October meeting were released to the press.  These minutes reveal that even though the Fed voted 9 to1 on October 30 to continue its 85 billion-per-month asset purchase program (QE), there were much less market friendly ideas being proposed behind the scenes.  At the meeting Fed officials were considering plans to reduce QE even before any further signs of improvement in the labor market, and some were suggesting that the decision to start tapering could come at "one of its next few meetings".  These austere proposals are in direct contrast to the dovish fiscal tone Janet Yellen expressed just last week during her confirmation hearings, and this rattled both the broad stock market and the precious metals market today.  Many investors correctly see the start of tapering as the government being fiscally responsible, and this can act as a depressing factor on gold prices as it makes gold less appealing as a hedge against inflation. 

This one-two punch to the precious metals today (early morning trade manipulation and the afternoon revealing of austere chatter at the Fed meeting) sent prices tumbling and triggered more bearish technical signals.  Directional momentum is now heavily bearish.  Unfortunately this means we need to bail out of long positions with the idea of reentering when the cycle bottoms.  Short-term signals indicate we may get a small bounce here into Thursday and Friday which would give a better exit point.  Unless gold can work its way back up towards $1300 by Friday (possible if today's reaction to the Fed is temporary), we have to consider the precious metals as short-term bearish and will be bailing out of long positions tomorrow or Friday.

The broad stock market
was also alarmed by the Fed's hawkish tone today, especially after the suggestion of more QE from Ms. Yellen just last week.  The DOW dropped more than 100 points in the afternoon but then recovered a bit and closed with a loss of 66 points.  It is too early to tell if this reaction to the Fed is going to be severe.  If there is more news about the Fed seriously considering the tapering of QE soon, then we could get a substancial correction here.  Otherwise, i think this correction will be shallow and brief.  Still on the sidelines of this market.

Comments are closed.

    RSS Feed

    Archives

    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012

The Alternative Investor takes no advertising or incentives from any company, institution or investment that is discussed on the website.  Any trading and investing information presented is based on Alternative Investor's independent and unbiased research and analysis of current financial markets.

                                                                                                                                                            LEGAL and DISCLAIMER

All statements and trading/investment information on this website represent solely the personal opinion of The Alternative Investor based on information available at the time of writing and are intended for educational purposes only and are not a recommendation to buy or sell securities, commodities or currencies.  The Alternative Investor is not a licensed broker or financial advisor.  The Alternative Investor presents the trading and investing information on this site in good faith based on his own research into current financial markets but cannot and does not guarantee profit and does not guarantee against any financial losses that result from using this information.  All users of this website and the information presented within it assume full responsibility for their own personal trading/investing decisions and any losses that may result from them.

Trading and investing in any financial market may involve serious risk of loss.  For this reason all traders and investors should never place more money than they can afford to lose in any individual market.  The Alternative Investor monitors several markets and encourages a balanced distribution of funds among them (and others).  The Alternative Investor recommends consulting with a professional financial advisor before making any transactions with financial ramifications.  All trading, investing and financial transactions should always be made in accordance with the appropriate laws and legal regulations in your area of jurisdiction.

The Alternative Investor is an independent researcher and analyst and receives no compensation of any kind from any individuals, groups, companies or institutions discussed on this website.