fb
X
X
Tired?
Unfocused?
Off your game?
Read our free, updated as of Mar 3, 2022, Dr K report on how to optimize your mind and body so you can boost your focus when trading the markets.
YES, SEND ME THE REPORT !
Meet Dr K !
Chris Kacher
  • Nuclear physicist
  • Stock & crypto market wizard
  • Blockchain builder
  • Bestselling author
  • Top 40 charted musician
  • Biohacker
  • Former computer hacker
YES, SEND ME THE FILE !
YES, SEND ME BOTH !
Your email will always remain private.

MLR - Premarket Pulse April 16, 2013

All of the major market indexes took a tumble on huge volume, logging their largest one-day drop since November of last year. Meanwhile gold and silver continued to crash, streaking to the downside as investors crowded the exits in panic selling. After gapping down 6% at the open, gold finished the day down 9% and silver down over 12%. This morning the metals are bouncing in a reaction move, but it is too early to tell whether a bottom is in, despite yesterday's selling having something of a climactic tone. Spurring the sell off, China's gross domestic product came in lower than expected. The idea that gold is falling due to a recovering U.S. economy seems far fetched as U.S. economic news continued to show weakness with the Empire State factory index and NAHB housing market index both missing expectations. As a result housing-related stocks were roundly clocked in yesterday's trade.

Getting back to the precious metals, it is more likely that gold's plunge is due to a combination of factors including short sellers piling on as gold breaks down below the lows of a basing pattern for the first time since it began its uptrend in 2001, fears that central banks will have to sell more gold to raise capital, deflationary fears from a PPI that came in at -0.6% last Friday, money moving into U.S. Treasuries due to Japan's aggressive quantitative easing program, the U.S. being slow to give back gold to Germany as a reflection of the U.S. attempting to hoard physical gold while fostering a fear of holding paper gold, and manipulation of the dollar by the Fed to push it higher and push gold lower.

On the bullish side of gold, QE is firing on all cylinders and central banks bought $3 billion worth of gold in the first two months of 2013. But price/volume rules all and currently it is telling us that something is not right. It could be simply a combination of the bearish arguments above, but it may be something worse. It is therefore prudent as always to keep a close eye on any positions you own, keeping stops tight, as the free fall in precious metals could be the harbinger of an ill omen whose reasons remain to be seen.

Stocks across the board were hit hard, and recent breakout attempts were soundly quashed. Futures are up this morning, but some serious damage has been done. While the NASDAQ, S&P 500, and Dow all held above their 50-day moving averages the broader small-cap Russell 2000, which is now lagging severely, and the New York Composite Index, both broke down through their 50-day moving averages in a sign that the broader market is much weaker than the action of the "big three" major market indexes might imply, and therefore long side risk has been heightened.

This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
FOR OUR FREE MARKET LAB REPORT :
Copyright ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing.
All Rights Reserved.
privacy policy