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The 200 Week Moving Average War Goes Nuclear!

IMG Auteur
Published : March 26th, 2017
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Category : Market Analysis

Yes, I know I’m on vacation.  Not to mention, it’s still Saturday morning.  However, with Diana having taken Sylvie to see Beauty and the Beast, I want to take a few moments to give you my take on yesterday’s events – and “trading.”  Particularly, the Trump Administration’s epic political setback, in failing to convince “Freedom Caucus” Republicans to vote for the hideous Trump-Care bill.  Who in essence, called the “art of the deal” architect on his “ultimatum” to either pass the bill, or stick with Obama-care until it inevitably explodes – just as I predicted from day one.  Frankly, there is no way to sugar coat such an epic political failure – which for once, even the Wall Street Journal perfectly described.

In other words, on a day that started with as many PiMBEEB headlines as any I can remember – including miserable durable goods, PMI manufacturing, and PMI service readings; exploding U.S. rig counts and oil production – and further evidence that history’s largest crude glut is about to get a lot worse; and emergency closed-door meetings at the White House, regarding the likely-to-be-shortly-revealed Obama Administration wire-tapping of the Trump election campaign; Trump’s “political capital” was dramatically depleted, leaving America with the rapidly expanding Obamacare nightmare indefinitely, and dramatically reducing Trump’s bargaining leverage in the upcoming, sure-to-die-on-the-vine tax reform and fiscal stimulus package proposals.  This, as the government is mere weeks from running out of cash; at which point, it may well shut down indefinitely – as the nation’s ugliest, most destructive “debt ceiling” crisis unfolds.

As anyone with half a brain knows, market participants have feared the outcome of yesterday’s vote all week, for exactly the aforementioned reasons.  Heck, even the PPT couldn’t prevent the “Dow Jones Propaganda Average” from having its first 1% down day in six months Wednesday, even if it held the decline to its “ultimate daily limit down” level of exactly 1.0% – and going into yesterday morning, with 50% “odds” of the vote passing, Zero Hedge led with “stock futures up on hope of the healthcare bill passing.”  Thus, when the odds of a “yea” vote plunged late in the afternoon, it’s not surprising that the Dow fell 150 points; whilst gold – albeit, in prototypically capped fashion – rose roughly $7/oz, to $1,252/oz.

 

To that end, consider the Audioblog I published two weeks ago, titled “the inevitable, decisive, 200 week moving average war victory”; in which, I discussed how a perfect storm of political, economic, and monetary events were approaching, to enable gold and silver to finally re-take these VERY key technical resistance levels; in gold’s case, at the aforementioned $1,252/oz; and in silver’s, $18.30/oz.  Not to mention, what I wrote in this week’s “March 23rd – the end of Trump-flation?”; which was penned, I might add, before the House Trump-care vote was delayed from March 23rd to March 24th

Per today’s title, tomorrow has the potential to mark the permanent end of the ‘glorious’ Trump-flation Era, just two months after it started.  Or more accurately, five months; given that the powers that be, upon being surprised that their historic election rigging efforts failed to usher Crooked Hillary into the White House, doubled down on their equally historic market rigging efforts – under the comically obvious propaganda meme that a Trump Presidency; which until that very evening was portrayed to be the worst imaginable outcome for America; would suddenly be the best.  In other words, they quickly transferred the PPT/Fed/ESF/gold Cartel meme that Hillary is ‘good for stocks, and bad for gold’ to Donald is ‘good for stocks, and bad for gold.’  Not un-coincidentally, just as gold and silver, on election night, had re-captured their 200 week moving averages, after having been held below them since the Cartel’s April 2013 ‘alternative currencies destruction’ – executed the day after Obama’s infamous

‘closed door meeting’ with the top ‘too big to fail’ bank CEOs.”

In other words, as was the case Election Night, the market started discounting the bill’s failure early in the afternoon – by selling stocks and the dollar, and buying Precious Metals and Treasury bonds; in the process, taking interest rates to a new four-week low, and the dollar to its lowest level since directly after the election.

And then, just as the bill was “pulled” from the House floor because it didn’t have enough support to pass, the Cartel and PPT “pulled” an Election Night II market rigging operation – by suddenly goosing stocks and slamming gold – in the latter’s case, just as it reached, for the third time in the past month; and second time in three days; its 200 week moving average of $1,252/oz.

In other words, taking the 200 week moving average war nuclear – as what the Cartel/PPT took hours to accomplish on Election Night, was achieved in mere minutes yesterday – as they were again forced into action by a “surprise” political defeat.  Not to mention, late on a Friday afternoon; as God forbid, investors might read over the weekend of how stocks plunged, and gold surged, following such a massive political setback; which in turn, makes it nearly impossible for the main tenets of the fraudulent “Trump-flation” propaganda meme to be maintained.

Instead, Wall Street, in true “market action makes commentary” form, claimed the subsequent stock surge and gold decline was due to LOL, “relief” that the bill failed, so the narrative can now switch to tax reform.  The problem with that line of thinking, of course, is that without healthcare reform, there are no meaningful tax cuts, if at all; or likely, a material fiscal stimulus.  Which is probably why, just as in the pre-election environment, stocks fell and gold rose whenever the bill looked likely to fail.

Anyhow, I just wanted to get this out into the open, so you can best do your personal due diligence, and realize just how close we are to the end game – of said “powers that be” inevitably being overwhelmed by “Economic Mother Nature” and the “unstoppable tsunami of reality.”  At which point, no amount of money printing, market manipulation, and propaganda will be able to prevent markets from accurately “pricing in” reality.

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Andrew Hoffman was a buy-side and sell-side analyst in the United States (including six years as an II-ranked oilfield service analyst at Salomon Smith Barney), but since 2002 his focus has been entirely in the metals markets, principally gold and silver. He recently worked as a consultant to junior mining companies, head of Corporate Development, and VP of Investor Relations for different mining ventures, and is now the Director of Marketing for Miles Franklin, a U.S.-based bullion dealer.
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