SD Outlook: The Fed and the cartel may be busy in the kitchen doing their prep work all week long. Here’s why…
Now that everybody is back for a full week of market action, the Fed will attempt to make it crystal clear just who is in charge.
As such, we’ve got Fed Heads galore coming in strides all week long, starting with a buy one get one free today:
Rounding out the latter half of the week we have afternoon speeches:
This makes sense from the Fed’s point-of-view, because the most significant data releases are scheduled for Thursday and Friday mornings, so the Fed will be able to clarify or massage an explanation of one of the data releases, such as the Producer Price Index (the cost that producers pay for raw materials), the Consumer Price Index (the price us consumers pay for finished goods and services) and Retail Sales (how awesome all the retailers are doing selling us all stuff we don’t need with credit we can’t afford) of for some reason the “markets” don’t like what they see in the numbers.
The thing about the events calendar this week is that it is commonplace to have this amount of Fed activity because it is simply part of their “jawboning” of the markets.
On the other hand, when the Fed has their FOMC meetings, or when the Fed Chair is giving (soon to be his) Humphrey Hawkins congressional Q&A show session, they don’t send out a barrage of central bankers to talk the markets because the data releases do it for them. A full slot of Fed speeches, like this week, fills the gaps between major market moving data releases.
The markets are so delicate that not one hour can go by without ESF and Fed direct intervention.
Last Friday the charts were setting up to show that a pullback could be imminent, and it appears this is still the case, though putting things into perspective, it is looking less like we will be getting a natural pull-back and more like we’ll be getting some good old-fashioned strong arming.
If the Yuan based crude oil futures contracts is indeed going to launch next week, the cartel is going to need to stay on top of their game this week in case there are swift and notable moves in gold & silver.
So with silver, we can see that whole number support is nearly where the 200-day moving average can be found:
While I took a lot of heat on Friday for saying we could see a pullback here, it is still looking that way on the charts. Let’s hope silver can stay above the 200-day. Regardless, if silver does nothing this week but consolidate, that could suffice for our pullback because it would be consolidation over time. Said differently, price is not the only thing that can re-balance the market by shaking out long traders and bring new ones in, but time can do it as well.
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