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INTRA-DAY NEWSLETTER ~ Sept 17 2014
Futures Unchanged Hours Ahead Of Janet Yellen, As Chinese Liquidity Lifts All Global Boats
Submitted by Tyler Durden on 09/17/2014
It has been a story of central banks, as overnight Asian stocks reversed nearly two weeks of consecutive declines - the longest stretch since 2001 - and closed higher as the same catalysts that drove US equities higher buoyed the global tide: a combination of Chinese liquidity injection (for the paltry amount of just under $90 billion; "paltry" considering Chinese banks create over $1 trillion in inside money/loans every quarter) and Hilsenrath leaking that despite all the "recovery" rhetoric, the Fed will not be turning hawkish and there will be no change in the Fed language today (perhaps not on the redline but Yellen's news conference at 2:30pm will certainly be interesting), pushed risk higher, if not benefiting US equities much which remains largely unchanged.
Not All That It Seems
Submitted by Tyler Durden on 09/17/2014 -
“It’s a questionably unquestionable situation... Are the markets prepared for a shocking answer... Will Janet Yellen announce the final end to QE? Or electrify the bulls with more accommodation? Can Yellen’s eloquent elocution energize the markets…or will she magnetize the bears? Tune in next time Fed fans... Same Fed time... Same Fed channel”
The financial media has no concern of negative outcomes, Wall Street has growth priced in that has never occurred in history, and there is NO expectation of a recession built into any forward assumptions. We have indeed discovered financial “Utopia,” or at least that is what is currently believed.
Ukraine Currency Crashes To Record Low As IMF Blasts "Gross Abuses"
Submitted by Tyler Durden on 09/16/2014 -
Despite celebrations of de-escalations and truce in US equity markets (by asset-gathering commission-takers), the situation continues to go from bad to worse in the nation almost forgotten now that ISIS is stealing American headlines. The Hryvnia plunged 7.5% this morning - its biggest single-day drop on record - following the release of a scathing IMF letter and devaluation warnings from BofA. The IMF blasted Ukraine's "premature emission of extra money," and demanded it "immediately halt these gross abuses," as BofA warns of risk of "10-20% devaluation" in the next year is high given reserves are at a "critical level."
Citi Warns Moody's May Put France On Downgrade Review This Friday
Submitted by Tyler Durden on 09/16/2014 -
"Downgrade risks have increased: France has been rated Aa1 with a negative outlook by Moody’s since November 2012. Given recent economic performance and various revisions to deficit projections, we believe it is now less likely that Moody’s revises its outlook to stable on Friday. Instead, we believe it is more likely that Moody’s puts France formally on a “review for possible downgrade” with a conclusion probably coming after the budget (due on 1st October)."
Note: All above articles are from www.zerohedge.com and goldtrends is in agreement with the commentary.
Technical Commentary
Gold strengthened further on Tuesday, closing at 1235.75. The past two candles’ sizeable upper shadows hint to steady resistance, and we remain focused on 1232 as the near term level to watch. Bearish momentum indicators continue to moderate, and short-term bearish trend indicators appear to be fading. Silver has also risen modestly, closing at 18.73 while forming a bearish shooting star doji. The silver technical studies are quite similar to those for gold, including moderating short-term trend and momentum indicators. However, for silver, the death cross has already been triggered, and thus suggests a bearish medium-term trend.
On the shorter term, odds are pretty high that gold and silver are near bottoms and a relief rally is about to begin. With the FOMC announcement this afternoon, it’s probably just a question of whether we clear the stops on the downside first and rally, or move up right away? I suspect that they will do both---spike up and down---and then over the next 24 hours, gold should establish a trend going into and around Sept 23rd. In summary, the trend remains down, but cycles and momentum suggest a relief rally for the metals is at hand.
GOLD CHART
Gold is finally making the blue mini moving average (89 hour) its pivot point and giving the first hint that momentum on the downside has slowed and a recovery attempt is developing. But gold must get above that dotted trend line just above price and first resistance will be the green moving average (200 hour) at 1246-1248 spot gold. Higher resistance is the 1255-1260 area when the relief rally begins. Support is the 1218-1225 area (ideal 1222). In summary, odds favor a touch of 1218-1222 and then finally relief. With the big downtrend in gold, it is not out of the question however to get a plunge to 1195-1205 as we’ll see on the next chart.
 
Cycles
The complexity of this bear wave and the fact that we have arrived at the medium term cycle turn (ideal week – Sept 16th – Sept 23rd – plus or minus 2.5 weeks) leaves three potential points for a price low as depicted on the chart. We have 1218-1225 (ideal 1222), then 1195-1208 (ideal 1202) and 1155-1180 (ideal 1172). We feel the 1st two points are the most likely and from there odds favor a relief rally into the next week (and potentially October 8th) will come in play.
Silver
It’s the same story with silver. Support is 1810-1830 area and then 1775. Resistance is 1885-1907 and then 1936. In summary, odds favor the metals might make one more spike plunge on the FOMC and then attempt a higher price into next week.
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