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INTRA-DAY NEWSLETTER ~ April 16 2015
Charts and analysis follows commentary
We have discussed many avenues on our website as to the coming liquidity squeeze. The first clue to this is the soaring US dollar vs other currencies. But as we have advocated, the real bubble and the burst coming is the global bond market as rates have reached by most measures, 300 year lows.
Cyprus was a trial balloon for a sovereign debt default of the banking system, and now the question of who will reign in Euro land --- the ECB or Greece is arriving at full circle as time is quickly running out and both sides are holding firm to most demands from the other.
So naturally, what would one expect from the Greek bond market?
Greek Bonds Tumble On News IMF Rejected "Unofficial" Greek Request To Delay Payment
Submitted by Tyler Durden on 04/16/2015
"Greek officials have made an informal approach to the International Monetary Fund to delay repayments of loans to the international lender," FT reports. Knowing it faces the rather untenable choice between paying the IMF or paying public sector wages and pensions, Athens attempted to "shuffle" its payment schedule around to no avail. Yields on GGBs spiked as the now openly insolvent Greece stares into the drachma abyss.
And what does Europe think ?
Contagion Arrives: European Peripheral Bond Risk Soars
Submitted by Tyler Durden on 04/16/2015
Just yesterday, German FinMin Schaeuble bent the truth, proclaiming that there was no sign of contagion from Grexit concerns. Today, it appears, he will be eating his words, as Italian, Spanish, and Portuguese bond spreads have exploded higher (up 15-30bps this week) amid the collapse of Greek sovereign and bank bonds. All we need now is for some EU leader to claim "Grexit risk is contained," and we know trouble is ahead.
Meanwhile back in USA, we our outlook for a higher US Dollar since May of 2014 has certainly come to pass. But the side of that forecast we surmised was if the US dollar was given enough room to the upside, it would eventually bring down the US economy as well.
But as for the US economy………………
Philly Fed Limps Higher After "Weather" Crash, New Orders Tumble To 2 Year Lows
Submitted by Tyler Durden on 04/16/2015
After crashing from November to January (oh that's just weather), the Philly Fed factory index has failed to do anything but limp higher in the last 3 months. Printing at 7.5 in April (slightly better than the expected 6.0, Philly Fed continues to hover around 1 year lows. The post-weather rebound is entirely missing as New Orders plunged to 2 year lows (though employment surged) with more firms reporting price decreases than reporting price increases.
The Changing World Of Work 4: The "Signal" Value Of Credentials Is Eroding
Submitted by Tyler Durden on 04/16/2015
Conformity and being able to navigate stifling bureaucracies no longer creates value or helps employers solve real-world problems. This is why college graduates can send out hundreds of resumes and not even receive a single reply, much less an interview or job offer. An entire new feedback loop of accreditation is needed...
Housing Starts and Permits Miss Badly As "Warm Weather" Rebound Fails To Materialize
Submitted by Tyler Durden on 04/16/2015
The Department of Commerce reported March starts and permits data, which after the February collapse was expected by everyone to rebound strongly because, well, it didn't snow as much in March as it did in February. Apparently it did, because not only did Housing Starts miss massively, and just as bad as in February, printing at 926K, on expectations of a 1.040MM rebound from last month's revised 908K.
Initial Jobless Claims Miss By Most In 2 Months, Continuing Claims Collapse To Lowest Since Dec 2000
Submitted by Tyler Durden on 04/16/2015
After last week's plunge to cycle lows, initial jobless claims jumped 12k from a revised 282k to 294k, back above the average for the year. The trend of falling claims has now ended as it appears the end of government fiscal year and QE3 signaled the end of the claims collapse.
Of course not everyone is hurting………………….
Goldman Reports Best Quarter In Four Years, "Average" Employee Paid $381,948
Submitted by Tyler Durden on 04/16/2015
The one TBTF "bank" which unabashedly admits it is just a taxpayer backstopped hedge fund printing money for its owners (while supervising the NY Fed and all other central banks with various former employees in charge) with no actual lending or depository operations, Goldman Sachs, just hit it out of the park, when moments ago it reported Q1 earnings that smashed both top and bottom-line expectations, with revenues of $10.62 billion, up 13.8% from last year, and EPS of $6.00 printing far above the expected $9.31bn and $4.26. This was the best revenue generating quarter for Goldman since Q1 2011, or in four years.
The plan has been to raise rates now for over ½ year, but they can’t in fear of a higher US dollar….
Fed's Fischer Says Fed Can't Be "On Hold For Ever", Spooks Bonds & Bullion
Submitted by Tyler Durden on 04/16/2015
Fed vice-chair Fischer speaks and markets must show that what he says is important. Shortly after uttering the following:
*FISCHER: MARKETS CAN'T DEPEND ON FED STAYING ON HOLD FOR EVER
Bond yields spiked and gold and silver prices tumbled (because it's all about the signal). Stocks initially ignored his comments, but are starting to lose ground now.
And following those statements later in the day………………………….
Dollar Dump Sends Oil, Bonds & Stocks Surging
Submitted by Tyler Durden on 04/16/2015
The sudden decision to buy EUR and dump USDs (after a slew of Fed speakers spewed their usual spew) has sparked a buy everything trade across markets as bonds, stocks, and crude are surging.
(Thanks to www.zerohedge.com for the news headlines)
Gold Chart
Gold reached resistance as listed last night 1209-1215 with a 1209 high and support 1192-1201 with an 1195 low today. Resistance remains 1209-1215 and support now is 1188-1195. The market remains very choppy between 1180 and 1220 as we enter into the final wait period for the next medium term move. A close above 1215 will favor 1224-1234 for a price level and a close below 1192 will favor a test of 1172-1182. Until then we’re in a trade range.
Cycles
The window for the next short term cycle is open and will remain open until Tuesday of next week. Odds favor prices should begin a two week move higher into the 1st week of May. However we do want to warn about one thing.
Apparently there is a big meeting with the central bankers on Friday and supposedly the subject is gold. The meeting was big enough for the ECB to hold their Thursday meeting yesterday in order to attend this meeting. Its exactly 2 years to the WEEK that Obama met with bankers and then all of a sudden gold crashed and dropped some 200 dollars an ounce in the course of two days in what came to be known as the crash of 2013. With that in mind we want to be on the lookout for a possible dump early next week and a potential cycle inversion that would add another two weeks to the downside.
While the cycle turn is April 18th (plus or minus 72 hours), we also need to pay attention Monday as that is the 1st day of trade after the cycle. We know a big move is brewing and while we feel it will be to the downside, its best to allow the market to guide us. IF we close above that dual resistance line near 1210 then look for a rally to the gold trend line and near 1234 (the 200 day average) and then we’ll see. Any close below 1163-1172 favors the downtrend is in force again.
Silver
Silver has support at 1598-1608 and then 1575-1585. Resistance is the 1650-1666 area and then 1687-1705. The short term trend remains down and needs a close above 1666 to neutralize it. Until we close above 1666 favor the bears at the moment.
 
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