Gold cycle turn low point favored between July 24th

INTRA-DAY NEWSLETTER ~ July 25 2014

Initial Jobless Claims Plunge to Jan 2006 Lows, Government Warns Of "Seasonal Volatility"
Submitted by Tyler Durden on 07/24/2014 - 08:37

So much for the idea of 'slack' in the economy, initial jobless claims just plunged 19k week-over-week to 284k (vs 307k expected) - the lowest since Jan 2006 (which was the lowest print since May 2000). This is the biggest beat of expectations in over 2 years. Continuing claims fell modestly. Let's not go popping the champagne corks of full recovery quite yet as non-seaonally-adjusted claims collapsed by their most in 6 months as the government saw fit to warn data-consumers that "claims are often very volatile this time of year," as auto shutdowns can cause claims to fluctuate. In other words, ignore this noise.

Japanese Exports Tumble For 2nd Month In A Row, Worst Since Abenomics Began
Submitted by Tyler Durden on 07/23/2014 - 20:39

Japanese exports have disappointed expectations for 6 of the last 7 months. June saw exports drop 2.0% (versus an expectation of a rise of 1.0%). This is the first consecutive month drop in exports since Dec 2012 (before Abenomics was unleashed). Despite eysterday's incessant bullshit from various BoJ member about the economy being on track for receovery etc. the adjusted trade balane has now been in deficit for 39 months in a row with June's unadjusted trade-deficit dramatically worse than expected at JPY822billion. For a sense of how much this disaster means to markets that have become so numbed thanks to central bank intervention, USDJPY fell 2 pips on the news... it's not the economy, stupid; it's the BoJ.

China Manufacturing PMI Explodes To 18-Month High, Employment Drops 9th Straight Month
Submitted by Tyler Durden on 07/23/2014 - 21:55

Having shown 11 awkward-to-explain charts of the Chinese economy, exposed the liquidity crisis that still lingers just under the surface, and exposed the "discrepancies that abound" in China's data, it was only right and proper in this new topsy-turvy normal that HSBC China Manufacturing PMI - after 8 months of missed expectations (but a very recent surge to the highest levels in 2014) - should smash expectations and surge to 52.0, its highest sicne Jan 2012 (and 2nd highest since the recovery began). Despite this exuberant data, employment fell for the 9th straight month.

Overnight Manufacturing PMI Euphoria Boosts Futures To Fresh Record Highs
Submitted by Tyler Durden on 07/24/2014 - 07:08

Ever since going public, it appears that Markit's giddyness about life has spilled over into its manufacturing surveys: after a surge in recent Markit mfg exuberance in recent months in the US, it was first China's turn overnight to hit an 18 month high, slamming expectations and fixing the bitter taste in the mouth left by another month of atrocious Japan trade data (where even Goldman has thrown in the towel on Abenomics now) following which the euphoria spilled over to Europe just as the triple-dip recession warnings had started to grow ever louder and most economists have been making a strong case for ECB QE. Instead, German July mfg PMI printed at 52.9, above the 52.0 in June and above the 51.9 expected while the Composite blasted higher to 55.9, from 54.0, and above the 53.8 expected thanks to the strongest Service PMI in 37 months! End result: a blended Eurozone manufacturing PMI rising from 51.8 to 51.9, despite expectations of a modest decline while the Composite rose from 52.8 to 54.0, on expectations of an unchanged print. Curiously the soft survey data took place as Retail Sales declined both in Italy (-0.7%, Exp. +0.2%), and the UK (-0.1%, Exp. 0.3%), which incidentally was blamed on "hot weather." Perhaps Markit, now that it has IPOed successfully, can step off the gas or at least lobby to have surveys become part of GDP.

Gold Chart
We discussed on the website last night that gold looked on the verge of tanking lower. If we can’t hold this 1287-1290 area then 1272-1282 (with 1277 as an ideal target) should come into play next. The other area we are watching is 1255-1265. That would be the 2nd if we don’t hold the first. Resistance is now 1305-1312. With options expiration on the 28th and with AUGUST futures rolling over next week (to December), the pressure on gold is being felt.

Cycles
The window for a cycle low opens today and runs to next week. The ideal day is the 27th but there plus or minus 72 hours for standard deviation. As long as price is not in the up channel, we can move lower. In summary -- we are in the window for a low to be established between now and the 30th of the month.

Silver
We’ve listed 20.68 – 20.80 on the website as support for quite a while and today we hit 20.68. If they break support then the 20.20-20.50 area is the next level we expect to be tested.

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Gold cycle turn low point favored between July 24th - July 30th