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NEWSLETTER ~ May 6 2015
Charts with support and resistance follows headlines;
Lockhart "September Rate Hike" Comments Send Stocks To 5-Week Lows
Submitted by Tyler Durden on 05/06/2015
While many hoped that Lockhart would play good cop to Yellen's bad cop, he didn't:
*LOCKHART SAYS MARKET'S VIEW FOR SEPTEMBER HIKE 'REASONABLE'
Which has sent stocks reeling back to the levels pre-payrolls in April.
Capital Controls Hit Greek Banks: FX Trading Curbed As Credit Lines Cut
Submitted by Tyler Durden on 05/06/2015
While officials have begun their own versions of capital controls by raiding pension funds, confiscating local government cash, and surcharges on withdrawals (and transfer ceilings); it appears the market participants themselves have now imposed their own share of capital controls. As Bloomberg reports, international securities firms are curtailing trading with major Greek banks - pulling credit lines and restricting FX trading limits - as fear of Grexit looms.
Fed Agrees To Name The FOMC Leaker (As Long As Congress Keeps It Secret)
Submitted by Tyler Durden on 05/06/2015
Having initially missed its deadline to provide a response to Congress with regard the 2012 leak of FOMC minutes to an external newsletter writer, The Fed reluctantly admitted that none other than Janet Yellen had met with them. Today, however, as The Wall Street Journal reports, The (unaudited) Fed has agreed to furnish a congressional panel with the names of its staffers who had contact with Medley Global Advisors in the months before the leak, “with the understanding that the names will be kept confidential." So we'll happily tell you who leaked it... as long as you don't tell the public. Audit The Fed!!!
Greek Deal On Monday "Not Possible" MNI Reports Despite Troika Attempt To Reconcile Differences
Submitted by Tyler Durden on 05/06/2015
With the crucial May 12th €774mm Greek IMF payment looming (and thus even more critical May 11th deadline for the Eurogroup's decision to release around €7bn in additional funds to Greece), the much-discussed 'splintering' of the Troika (The Institutions as the Greeks would prefer we describe them) appears to be gradually un-splintering. Today's statement from the EU talks that the members of the Troika "share the same objective" may reassure some after the 'limbo' of serious disagreements between the European Commission and The IMF. However, with various 'red lines' remaining unaddressed, EU sources say a deal on Monday is not possible.
Yellen Kills The Music, Says "Equity Valuations Are Quite High", Sends Dow Red For 2015
Submitted by Tyler Durden on 05/06/2015
Back in July 2007 Citi's then CEO Chuck Prince, a little over a year before his bank received a gargantuan government bailout said "as long as the music is playing, you've got to get up and dance."
Moments ago Janet Yellen just killed the music: YELLEN SAYS EQUITY MARKET VALUATIONS QUITE HIGH
Or, paraphrased, the $4.5 trillion balance sheet the US created, and the $22 trillion in assets purchased by global central banks to keep the dream alive, has lead to "quite high" stock prices.
Greece Floats Surcharge on Withdrawals As ECB Considers Cuts To Liquidity Lifeline
Submitted by Tyler Durden on 05/06/2015
Greece is set to introduce a surcharge on withdrawals and financial transactions in an effort to raise cash amid fractious negotiations with creditors. Meanwhile, the ECB is considering measures that will tighten the screws on the country's cash-strapped banking sector.
US Productivity Suffers First Consecutive Quarterly Plunge Since 1993
Submitted by Tyler Durden on 05/06/2015
Well this cannot be good. US output per hour (for the non-farm businesses) - or non-Farm productivity - plunged 1.9% in Q1. This follows a 2.1% slump in Q4 2014 and is the first consecutive quarterly plunge since 1993. This was driven by a 0.2% decline in output as hours worked increased 1.7% with manufacturing productivity suffering a 1.1% drop in Q1 (driven by a 1.2% decline in output).
ADP Employment Tumbles To 15 Month Lows As Manufacturing Jobs Plunge
Submitted by Tyler Durden on 05/06/2015
Following March's dismal drop in the ADP Employment report (the biggest miss in 4 years) and missing for 3 straight months, April printed a very weak 169k (against notably lowere expectations of a 200k rise). Even worse, February and March was revised even lower. This is lower than the lowest economist estimate. Large companies were particularly weak with smaller businesses adding the bulk of the meager jobs print. The esteemed Mark Zandi blames this on "the fallout from the collapse of oil prices and the surging value of the dollar."
Gold Chart
Gold remains trapped in a trading range of 1175-1225 and there is still no change to the choppy and overlapping sideways action we’ve seen. Resistance is the 1196-1198 area and 1202-1212. The 1202-1205 area and 1209-1212 is strongest resistance. Support is the 1178-1185 area and then 1163-1172. Until we get out of this chop area, its best to remain flexible to short term trend and not be committed. The NFP report on Friday should be the time the control boyz gang up and move gold for this week. There is no way to gauge which side they will move it when we are in such a chop condition.
Gold Cycles
When price is this choppy the cycles are much less reliable. Still the best fit is a blue cycle low based on the Friday price low at 1168. The window closes today and thus the next short term cycle is underway in full galla on Thursday. Right now it seems we have a low in place but as we said, the cycles have are also skewed due to this choppy April trade range. This would suggest higher to mid May but ANY CLOSE BELOW 1163 and we should favor lower prices in this new short term cycle. Key resistance remains 1220-1225 and event the 200 day average resides there now.
Silver
Silver has strongest resistance at 1675-1705 and then 1735-1750. Support is the 1580-1609 area and 1550-1580. The channel up and downtrend lines are getting closer and closer with price in the middle. As long as we are inside those lines, the trend remains neutral. Odds favor the sideways action nears its end.
 
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