View profile

GoldFix: The Fed Controls The Gray. It's All Noise

Welcome. GoldFix is original content. The goal is to give you, the reader, some basis for looking at markets as you prepare your own trading day. Second, it aims to give you more tools, or at least the basis for developing your own tools to navigate markets. To that end we expect there will be changes based on feedback. Gold is the jumping off point for analysis.

GoldFix Daily Brief
Good Morning. The DX is down up 16. Bonds are very soft especially at the long end. Stocks are sleepily unchanged. Gold is $10 lower and reacting likely to bonds more than the DX. Silver is down 26c but Copper is up 1%. Base metals are bid. Crude oil is up almost a dollar. Crypto is softer with Ethereum the weakest post its ramp up on successful implementation of the EIP hard fork.
Yesterday and Today: Stocks were up again yesterday.  A reduction in bond purchases could be announced by September but “that depends on what the next two jobs reports do,” Fed Governor Christopher Waller said.
The spreading of the delta variant is sparking new corporate policies on masks and vaccination requirements, and upending Wall Street’s return-to-office drive.
The U.S. Senate is heading toward a weekend vote on its $550 billion infrastructure legislation, in part thanks to the unresolved issue on how to modify a provision of the bill on reporting requirements for cryptocurrency transactions for tax collections.
What’s It Mean: Waller’s comments yesterday are typical of jawboning by Fed salesmen. Marc Chandler says:
The newest Fed Governor Waller may have spoken for others when he said that another couple of strong employment reports would allow the Fed to announce tapering before the end of the year. Unfortunately, it probably overstates the linkage. First, Chair Powell has gone to lengths to explain that, unlike the price stability target, the Fed targets the PCE headline deflator, but there is no one indicator of maximum employment. Second, average monthly private sector nonfarm payroll growth slowed slightly in Q2 from Q1 (468k vs. 489k). Still, most Fed officials recognize that there has been progress toward meeting the conditions to allow a discussion about the pace and composition of the bond purchases. Note that the four-week moving average of weekly initial jobless claims was unchanged in July from June (394k). Yes, a million jobs a month would be great, but wouldn’t an average of 500k a month allow the Fed to taper? To say the same thing, it seems that the consensus may have the burden of proof wrongly placed on needing strong jobs growth for the Fed to taper, rather than the barring falling off the current trajectory, the Fed will taper later this year or early next year. It is that “or” that seems to be what is dividing the hawks and doves. -Source
The event that triggers the tapering event is gray. The Fed controls the Gray. It’s that simple. Everything else is noise. We’d all be better off if their microphones were turned off. Read the 2 screen caps in the tweet below if you have doubts.
Real title: How Good are Fed speakers at manipulating sentiment
On Deck: In a very light day for releases aside from the jobs report for July, we get Canada unemployment at 8:30 a.m., before U.S. wholesale inventories data at 10 a.m. The Baker Hughes rig count comes at 1 p.m. Norwegian Cruise Line Holdings Ltd., Dominion Energy Inc., Ventas Inc. and Draftkings Inc. report earnings. The G-20 research ministers meet in Trieste, Italy.
What big data signals say about tomorrow's jobs report
Gold Technicals
The following are excerpts from Moor Analytics Technical Reports posted here with permission and not actionable out of full report context.
Upside: Get long on a decent penetration and/or pullback above $1,814.9 (+1 tic per/hour starting at 8:20am) and look for the move upward mentioned above.
$1800 strike do your thing!
$1800 strike do your thing!
Downside: Get short below $1,790.7-89.1. If we break below here, or even just below $1,790.7 and back above, look for short covering.
Bitcoin Technicals
On a lower timeframe basis: We held exhaustion below at $29,075-6,905 with a $28,800 low and bounced $13,150. I warned that holding the exhaustion area and settling back above the $30,205 low was an early warning the macro move down from the high was likely over.
Daily Chart
Daily Chart
Special Lecture: Pay For Orderflow Explained
Given the recent attention to RobinHood’s IPO and their questionable business model, we gave a full on explanation of how Pay for Orderflow works. The 2 hour lecture is a deep dive into the definition, practices, and real life experience in this practice from a 30 year veteran who lived it. The University quality lecture covers the evolution from the late 1990’s to today’s use. GoldFix subscribers can access it for a limited time using Access. Video Link HERE Passcode: 3Dyb$+=+
That’s it, Good Luck
Don’t miss out on the other issues by VBL
Did you enjoy this issue? Yes No

Capital markets recap, commentary, and analysis for evolving traders

You can manage your subscription here.
In order to unsubscribe, click here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Created with Revue by Twitter.