Precious metals are suddenly strong & Greenback can’t seem to right the ship

The biggest news of last week wasn’t even the stock market. Remember I told you precious metals hit a series of time windows? So far, so good, even as silver got a steep retest of the low but turned back up on Thursday. That is a big shot in the arm for the bulls. Even the XAU is higher. The precious metals have a track record of breaking your heart even more than the Mets, but this one looks good.

But why might it be even better? That depends on whose perspective you are looking at. A couple of days ago I stumbled into this headline from Zero Hedge: “Thank God This is Happening”: Russia Says Time Has Come To Ditch The Dollar. Deputy Foreign Minister Sergei Ryabkov said one of Moscow’s alternatives to dealing with Washington sanctions is to abandon American currency in trade transactions. 

Previously, their Foreign Minister Novak said a growing number of countries are interested in replacing the dollar as a medium in global oil trades and other transactions. Turkey is considering using the ruble and lira in transactions with Russia and now India is considering paying for Iranian oil in rupees. Also, according to this Zero Hedge article the Chinese taking steps to launch a petrol-yuan.

I usually wouldn’t pay attention to stuff like this. I take it as negotiating bluster. But the world is changing and suddenly we have a time window change of direction where precious metals are suddenly strong and the Greenback can’t seem to right the ship. Sometimes big things develop out of little beginnings. 

We don’t yet have a confirmed intermediate or long-term change in the precious metals or the dollar. Seasoned traders know that by the time these conditions become headline news, it's usually late in the trend. In other words, by the time this really becomes a problem we will be at the crisis point in the pattern. Case in point is the stock market topped as early as July 2007 (Russell 2000) but the crisis didn’t hit until September 2008. By then it was a disaster and in the late innings of the move.

Next week marks the 12th year I’ve been doing this update. For the most part, I’ve been bullish. In fact, I was one of the first of my peers to get long-term bullish when I hit on the long-term calculations for the bottom of the stock market somewhere in 2009. Back in the days before I stumbled into Kairos vibrations, it took me about 6 months to realize the bottom of SPX was perfectly tied to the 1987 top and when I saw that I knew how significant the bottom was going to be. But lately you’ve seen me indulge the darker side of the market even as it stays up.

Last week the media told you this was the longest running bull market on record. I beg to differ. On this one, I’m in the camp with the Elliotticians who know the period from 1949-66 which they call grand supercycle wave 3 is the longest running bull. They’ve told you the longest running bull is from 1990-2000. Why isn’t this one the longest running bull? There’s only one quick pullback of any substance in 16 years! If you check, you’ll also find this is the greatest era of US prosperity per capita of any era in American history. Why not? We were the only developed nation on the planet that didn’t have their infrastructure destroyed by the way and our military industrial complex got rich rebuilding Europe. That’s never going to happen again. Could it be the business media is finally getting to the point they think the market will never turn?

It does irritate me that President Donald Trump calls the current period the greatest economy in American history. It’s not even close. But I also agree that if they impeach him the market would crash. Last week, we heard the mainstream media mention the “I” word hundreds of times. What is the exact crime he committed?

Remember last week, right there on day 144 off the Dow top the futures got smashed on news former Trump attorney Cohen reached a plea deal concerning violations of election campaign law? The next day his attorney Davis alleged Trump had advanced knowledge of Russian hacking efforts. As it turns out, the best legal mind in the country Alan Dershowitz said Trump broke no campaign laws and now Davis is backtracking from his stunning claims of just a few days ago. Then former CIA chief Brennan goes on Bill Maher the other night and signals to the Trump cabinet they should work to remove him via the 25th Amendment. I have news for you, on the same network HBO, right before Maher was that Churchill movie called the Darkest Hour. There was a cabal who thought Churchill was crazy as well and tried to remove him. What we found in that movie is Churchill was completely dialed into the sentiment of the British people. The rest was history.

In other words, don’t blame me for preparing for the dark side of this market. This impeachment talk on a regular basis is very dangerous not only to the market but the country as well. The economy is doing well and people are tired of it.

It’s out there and I think we are getting to the point where some people are getting concerned about their long-term investment decisions because of the uncertainty surrounding the election in just under three months. I also told you this was the Eyes Wide Shut market. Life goes on until it doesn’t. Well, they survived that 144-day window with today’s break to the upside. This could be the slowest trading week of the year.

Finally, just the pictures of Jackson Hole was very relaxing. Powell said inflation was under control and took full credit for keeping the economy from overheating with his rate increases. The market didn’t seem to mind. Right now, we await the next mini black swan event. The week before Labor Day usually has bullish action.

 

About the Author

Jeff Greenblatt is the author of Breakthrough Strategies For Predicting Any Market, editor of the Fibonacci Forecaster, director of Lucas Wave International, LLC. and a private trader for the past eight years.