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The Gold Update by Mark Mead Baillie --- 623rd Edition --- Monte-Carlo --- 23 October 2021 (published each Saturday) --- www.deMeadville.com
"Finally Gold Goes... uhh wait... No It Doesn't"
Yesterday (Friday) it looked for all the world that Gold finally was getting some material upside grip, that finally the weekly parabolic Short trend was about to flip Long, that finally the M word crowd were "takin' it in the Shorts" (a somewhat vulgar StateSide expression, yet contextually most satisfying) ... but no. 'Twas yet again (again) another faux Gold rally which morphed into a fold folly.
Can we saying "annoying?" Yes we can. And now for the third straight week, let's post a chart of Gold's rallies time and again (again) being repelled. Yes, 'tis becoming ever so monotonous, but 'tis what 'tis. So here we go with Gold for this month of October-to-date:
"Gruesome, isn't it?" --[Bugs Bunny, '38]
Indeed in settling out the week at 1793, Gold "fell" (but was it pushed?) -22 points in less than one hour following Friday's high of 1815. The good news is (and this really is a stretch): the above chart displays Gold as having a bit of an upside October tilt. However, in turning below to Gold's weekly bars since a year ago, the seemingly inextinguishable parabolic Short trend remains in place, now 17 weeks in duration and sixth lengthiest this century; (the century's median length for Short trends is 11 weeks).
Still, even with Friday's failed rally, Gold's net gain of 25 points for this past week was its best since that ending 27 August. Further, given Gold's expected weekly trading range is 50 points, the distance from here (1793) to the parabolic flip price (1822) is within range at just 29 points. But what of the M word crowd? And what is it of late about their "presence" these past three Fridays? Regardless, if only we could force a margin call there, eh? Could so do if we all buy like there's no tomorrow:
Yet from the "Misery Loves Company Dept." and the standpoint of "safe havens", 'twasn't just Gold that was sucker-punched: Friday found rallies in Sister Silver and the ever-essential Swiss Franc fizzle as well. Odd in a sense that the Bond stayed firm, its yield just barely above 2%. All that said, one "ought think" the safe havens to be flyin' given the Economic Barometer's week was floundering. Year-over-year, 'twas was the fourth time the Econ Baro has descended by at least this much in just five days. Likely matters not as everybody's smilin':
"Yeah, but that Industrial Production number was pretty bad mmb..."
Squire, its September reading was negative for the second consecutive month, something that hasn't occurred since the initial COVID shutdowns. 'Tis what happens when you can't get the requisite stuff to build your stuff. In tandem across the same time frame, 'twas the second-largest drop in Capacity Utilization. Also, the month's Housing Starts and Permits both slowed, as did Leading Indicators. Too, October's Philly Fed Index pulled back, thank you, Pat (PhillyFedPrez).
The result? Indubitably, all-time highs for the S&P 500. Bad is better. But have you noticed that the "great earnings" for Q3 haven't put a dent in the Index's price/earnings ratio? With 100 S&P constituents having thus far reported, our "live" P/E right now nonetheless is 53.0x. Which for you WestPalmBeachers down there means even though the "E" is rising, so is the "P". Indeed this year's "Crash Season" (albeit with a week to go for such traditional Sep/Oct period) has recorded at worst a correction of just -5.4% per 04 October's S&P low. 'Tis entirely analogous to 1914's "Hurricane Season": there were no hurricanes.
As for inflation, 'twas nice to see the FinMedia dutifully report that at least a dozen sovereign banks already have nudged up their interest rates, (excluding the European Central Bank). And obviously the private Federal Reserve hasn't budged. But the latter's Governors Christopher "Go Beavers!" Waller and Randal "Have No" Quarles both just suggested rate rises may come sooner than later. We say: just do it, but first recommend that the public sell their stock holdings so they don't get caught in the stock market's crash. Pure logic. After all, Kaplan and Rosengren so did. (Oops, sorry...) Either way, at least the U.S. Government itself has enough money to operate through 03 December. Life is good.
Next here's a reasonably good look at Gold: "reasonably" as below left across Gold's daily bars from three months ago-to-date, again the trend of late is up, but the M word Fridays (three rightmost red bars) are fraught with frustration. Then below right we've Gold's 10-day Market Profile, which is at best a congestive mess:
Similar is the like drill for Silver, her "Baby Blues" at left about to bridge their +80% level in confirming uptrend consistency, whilst at right in her Profile she again sits a bit higher up in the stack than does Gold:
We'll close it out for this week on a high note: the M word notwithstanding, recall from the above chart of Gold's weekly bars that the parabolic flip price from Short to Long is now 1822. Since the year 2001, such "flip-to-Long" median follow-though percentage increase by price is +4.4%. Therefore from 1822, an increase per that median would bring Gold to 1902, just about in time for Santa. Alternatively, a mere $61,000 today buys one bits**t, always a great stocking stuffer. Except: where is it? GOT GOLD?