InTheMoneyStocks Market Analysis

[InTheMoneyStocks]

Dollar Down, Gold Up. What Does It All Mean?

This morning December spot gold is trading at the new all time high of $1300.00 an ounce. Ever since Federal Reserve Bank Chairman Ben Bernanke gave a speech in Jackson Hole, Wyoming on August 27th indicating that the central bank could and will do more to flood the market with liquidity should the economy start to slow down. Since that time the stock market has gone into rally mode. However, gold began taking off to the upside around July 28th. This tells us that quantitative easing was already taking place and money was being printed and pumped into the very fragile system. How much higher can gold go from here? Well, how much more money can the Federal Reserve Bank print without the stock market reacting negative?

The U.S. Dollar Index has continued to tumble sharply lower since June 7th, 2010 when it reached a yearly high at $88.70. At one point in May and June of 2010 gold and the U.S. Dollar Index actually traded higher together as gold was part of the fear trade. Now gold is obviously part of the inflation trade. Therefore, when the U.S. Dollar Index declines the stock markets will inflate and trade higher. As we all know by now the opposite is true when the U.S. Dollar Index rallies or trades higher the major stock market indexes will decline and deflate lower. This morning the U.S. Dollar Index is trading at $79.38.

At this time the Federal Reserve Bank has successfully printed the stock market out of trouble whenever it looks close to a major breakdown as it did in late June. The Federal Reserve Bank and the global central banks are try desperately to inflate this economy back to health. So far it has worked, however, an individual or a family could not borrow or print there way out of a problem. Therefore, should the printing presses ever stop or should the money dilute to a worthless status it will not be a pretty situation for the new global economy. That is even true for the highly praised savior of the world, the Chinese economy. Who will the Chinese have to export their goods to? In any case, today the stock markets are back in jubilee mode and the inflation rally is still alive. Stay tuned as this could get very interesting soon.

Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com

 

[MarketMoverTrader]

Re: Can The Small Investor Survive In This Market?

Interesting - I hope not. I love beng a small investor. My method is riding market movements created by the big players and taking profits along with them.

 

[InTheMoneyStocks]

Gold Tells You Everything You Need To Know

Traders have to chuckle at the intra-day action. Whenever the stock market is close to a major sell off the U.S. Dollar Index declines sharply. When the U.S. Dollar Index declined sharply around 10:00 am EST this morning you can see the reversal higher in gold. The SPDR Gold Shares (NYSE:GLD) made a new all time high as it spiked over $1.50 in less than thirty minutes. We must tip our caps to the people in charge, however, it is a bit blatant and could signal trouble for the major stock market indexes down the road. Many traders and investors are asking if the Plunge Protection Team (PPT) exists? Well, it sure does looks like it.

Today spot gold is now trading around the $1307.00 level intra-day which is a new all time high. This is telling us the quantitative easing is not going to take place down the road because it is already is happening. Gold is now the new way to read the money supply in the economy. Remember that M3 money supply has not been viewed by the public since 2006. This is when the Federal Reserve Bank said that this economic reading does not fit into the budget any longer. Again, I have to chuckle as this is coming from people that print money for a living.

 

[InTheMoneyStocks]

Markets Collapse On Apple, Confidence And Richmond Manufacturing, Then Rally

The markets opened flat today, only to collapse lower quickly. Within the first few minutes of trading, Apple Inc. (NASDAQ:AAPL) dropped from its opening price of $291.77 to $275.00. This massive drop seems to have been perpetuated by a rumor that the COO of Apple was leaving to join Hewlett-Packard Company (NYSE:HPQ). The stock has since bounced back, only lower by $2.05 at $289.11. This started a little panic in the tech sector that sent many stocks lower. These same stocks are all now positive.

In addition, 10:00am ET saw some key economic data that was much weaker than Wall Street expected. Consumer Confidence was released, coming in at 48.5 after the market expected 51.5. The Richmond Fed Manufacturing Index was also released, coming in poorly. The seasonally adjusted composite index of manufacturing activity dropped to -2 in September from +13 in August. Shipments collapsed fifteen points to -4, new orders lost 10 points to 0, and the jobs index fell fifteen points to -3. Overall, this was a very poor number.

While the market dropped sharply on all this negative data, it has since recovered to go positive. The SPDR S&P 500 ETF (NYSE:SPY) hit a low at $113.18 only to recover and go positive slightly at $114.59 now. This recovery is on the shady side as rumors are flooding the market of Federal Reserve intervention or Plunge Protection Team manipulation. The key leading stocks have taken off, the very stocks manipulators would have to buy up aggressively to prop a market up.

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com

 

[InTheMoneyStocks]

Markets Reverse As Volume Surges

The markets reversed substantially today after a massive gap higher. This is a key reversal because volume is extremely strong. The SPDR S&P 500 ETF (NYSE:SPY) ran higher to $115.79 after economic news came out better than expected at 8:30am ET. Jobless Claims cam in at 453,00, slightly better than expected. In addition, the third estimate of GDP came in at 1.7% which was also better than the 1.6% analysts had expected. This caused a solid gap higher above the master level on the SPY of $114.85 - $115.04. The markets rallied higher and at 9:45am ET, Chicago PMI was released. This economic breaking news also was much better better than expected, coming in at 60.4. Last month, it was 56. On this news, the market ripped even higher, hitting the highs of the day at $115.79. No sooner did the pop occur, the market began to reverse.

Always remember, the market reverses and tops out on the best news and bottoms on the worst. The Dollar has also surged higher, the PowerShares DB US Dollar Index Bullish (NYSE:UUP) was lower early keeping the markets up. The UUP is now higher by $0.03 to $22.87. The markets are at the lows of the day now, with the SPY hitting $113.81. Major calls were made in the Research Center for a major day, key move day.

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com

 

[InTheMoneyStocks]

Federal Reserve To The Rescue Again

The markets had their ugliest day in a month yesterday, dropping just under one percent. By no means was this a big fall of course, just large in comparison to what has been seen recently. The SPDR S&P 500 ETF (NYSE:SPY) fell from a high of $114.85 to close the day at $113.75. The U.S Dollar was higher yesterday as well, one of the key reasons the markets were lower. Today, that is ancient history. The Federal Reserve and Plunge Protection Team saw the markets near a panic break down level and came in to save the day once more. This morning, the U.S. Dollar was pounded, markets jumping higher. The Dollar has continued to fall, negating all of yesterdays market drop and then some. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is down sharply, trading at $22.55, -0.20 (-0.88%). The SPY is dramatically higher, trading at $115.82, +2.07 (+1.82%).

Every time the markets appear to sell off and near a major break down level, the markets are saved. This is starting to become a joke in the pro trader community. While it is nice to know the markets cannot fall too much before they are saved and pushed higher, it is scary to realize that the Federal Reserve and the 'powers' that be can only control the Dollar for so long. Eventually they will lose control. In the short run it is a nice thing, to pump the markets up with liquidity and continue the rally. However, in the long run, it is going to cause far more problems. The Federal Reserve believes they will be on the cutting edge of tightening when needed to keep hyperinflation at bay. When have they ever been on the cutting edge of anything? They are playing with fire and unfortunately, in the next 5 years, the U.S. average citizen will be the one that gets severely burned. Be wary of those that would flood the markets with money in the short term to relieve pain, not looking at the long term long term consequences. Essentially, this is just another bubble in the mix that will be even bigger than the housing collapse and financial crisis.

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com

 

[InTheMoneyStocks]

Is Bernanke Loaded With Bullets Or Just Playing With A Cap Gun?

Ever since the Federal Reserve Bank Chairman Ben Bernanke talked about quantitative easing part two the markets have been in full rally mode. Now, while this rally has occurred on some of the worst volume I have ever seen the point move higher cannot be denied. Since the August 25th low the S&P 500 is higher by nearly 12.00 percent. Ironically, this is almost the same amount of downside that the U.S. Dollar Index has declined since it topped out on June 7th, 2010. Today the U.S. Dollar has made a fresh new multi-month low at $76.90. The plan is to simply drop the U.S. Dollar against most other currencies and inflate the stock markets around the world. Can this type of action actually work?

Ben Bernanke has said that he will do whatever is necessary to get the market up and the economy going. As far as quantitative easing goes it looks as if it has been going on already. Just look at a chart of gold and you will see that gold began taking off on July 28th, 2010. Since that time gold has risen higher by 17.00 percent. Gold is the new way of reading the M3 money supply that the Federal Reserve no longer makes known to the public because it does not fit into their budget, if you can believe that. In fact, all commodities have soared higher. You can't tell me that high oil is good for the economy. High oil is an automatic tax on the public.

The Federal Reserve is now the largest owner of U.S. Treasuries with the exception of China. Now it is well known that the U.S. has some serious debt service to pay. However, is this the way it is going to play out? The Fed will just continue to drive the interest rates lower so the U.S. will just have to pay less interest. Something will eventually have to give. The Chinese and other countries that hold U.S. debt will eventually get tired of this action and not want to purchase any new bonds. That means that the Fed will eventually own all the debt of the United States. Is this possible?

This really looks like a last ditch effort to inflate this economy back to health. The last time former Federal Reserve bank Chairman Alan Greenspan did this in 2002 it created the largest credit bubble that the world has ever seen. At that time the market and the economy was suffering from the tech bubble and a new housing bubble was formed to take its place. People from all walks of life rushed in to buy homes with little or no money down and a construction boom was formed. This time around, bank lending rates are at historic lows and people don't want to buy anything. Banks are selling more houses than home-builders. Foreclosed properties are growing by the minute. However, the central bank for the United States is looking to flood the system with more money.

This story cannot have a pretty ending. If a drug addict is just given more drugs he will eventually overdose or take a heart attack. Unfortunately, the stock market does not see it like that at the moment, however, it may be left no choice. Inflate, inflate, inflate, until it is too late. Deflation is much like a black hole. It will suck everything right in. Unless capitalism is allowed to resume and work the way it was designed to work by letting things fail this economy is doomed.

Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com

 

[Depth Trade]

Re: Is Bernanke Loaded With Bullets Or Just Playing With A Cap Gun?

Hopefully he is loaded with bullets and playing Russian Roulette.

 

[InTheMoneyStocks]

Markets Float Higher As Jobs Report A Non Event

The markets are floating to the positive side today after the Non Farm Payrolls and Unemployment Report turned out to be a non event. The Non Farm Payrolls number came in at -95,000. The market had expected a flat number. While at first glance, this number seems very negative, the key number inside the Non Farm Payrolls was the Private Sector Employment which gained 64,000. Initially the markets flushed lower, then recovered quickly to move back to the flat line. This number had an initial negative reaction, but was pacified by the Private Sector Employment gain.

The SPDR S&P 500 ETF (NYSE:SPY) are trading at the highs of the day at $116.22, +0.33 (+0.28%). This move higher over the mid morning session is mainly due to the weakness in the U.S. Dollar. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $22.42, -0.06 (-0.27%).

The currency wars continue. Each major power trying to weaken their respective currency. While it has not reached a boiling point yet, the rhetoric between China and the rest of the world is increasing. Japan has already stepped in to weaken their currency in a major way. As an individual investor, one must be concerned about this weakening of currencies getting out of control and an ultimate collapse occurring. If each country is trying to drop their currency more than the next. It is a vicious circle and long term very concerning.

The leading stocks today are clear and bell weathers. Exxon Mobil Corporation (NYSE:XOM) is strong on the back of the Dollars weakness and the rise in oil. Apple Inc. (NASDAQ:AAPL) is leading the tech sector as it is trading higher at $293.12, +3.90 (1.35%) while Goldman Sachs Group, Inc. (NYSE:GS) was the weakest market leader weeks ago but has now turned into the strongest, leading the financial companies once again. Goldman Sachs is trading higher at $152.76, +1.65 (1.09%).

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com

 

[viktor_k67]

Re: Markets Float Higher As Jobs Report A Non Event

The S&P 500 and DJI are trending to their April's highs. The Nasdaq 100 is already there, that is why it is behind

 

[chump]

Re: Is Bernanke Loaded With Bullets Or Just Playing With A Cap Gun?

Ever since the Federal Reserve Bank Chairman Ben Bernanke talked about quantitative easing part two the markets have been in full rally mode. Now, while this rally has occurred on some of the worst volume I have ever seen the point move higher cannot be denied. Since the August 25th low the S&P 500 is higher by nearly 12.00 percent. Ironically, this is almost the same amount of downside that the U.S. Dollar Index has declined since it topped out on June 7th, 2010. Today the U.S. Dollar has made a fresh new multi-month low at $76.90. The plan is to simply drop the U.S. Dollar against most other currencies and inflate the stock markets around the world. Can this type of action actually work?

Ben Bernanke has said that he will do whatever is necessary to get the market up and the economy going. As far as quantitative easing goes it looks as if it has been going on already. Just look at a chart of gold and you will see that gold began taking off on July 28th, 2010. Since that time gold has risen higher by 17.00 percent. Gold is the new way of reading the M3 money supply that the Federal Reserve no longer makes known to the public because it does not fit into their budget, if you can believe that. In fact, all commodities have soared higher. You can't tell me that high oil is good for the economy. High oil is an automatic tax on the public.

The Federal Reserve is now the largest owner of U.S. Treasuries with the exception of China. Now it is well known that the U.S. has some serious debt service to pay. However, is this the way it is going to play out? The Fed will just continue to drive the interest rates lower so the U.S. will just have to pay less interest. Something will eventually have to give. The Chinese and other countries that hold U.S. debt will eventually get tired of this action and not want to purchase any new bonds. That means that the Fed will eventually own all the debt of the United States. Is this possible?

This really looks like a last ditch effort to inflate this economy back to health. The last time former Federal Reserve bank Chairman Alan Greenspan did this in 2002 it created the largest credit bubble that the world has ever seen. At that time the market and the economy was suffering from the tech bubble and a new housing bubble was formed to take its place. People from all walks of life rushed in to buy homes with little or no money down and a construction boom was formed. This time around, bank lending rates are at historic lows and people don't want to buy anything. Banks are selling more houses than home-builders. Foreclosed properties are growing by the minute. However, the central bank for the United States is looking to flood the system with more money.

This story cannot have a pretty ending. If a drug addict is just given more drugs he will eventually overdose or take a heart attack. Unfortunately, the stock market does not see it like that at the moment, however, it may be left no choice. Inflate, inflate, inflate, until it is too late. Deflation is much like a black hole. It will suck everything right in. Unless capitalism is allowed to resume and work the way it was designed to work by letting things fail this economy is doomed.

Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com

My god I am shocked ,The Moneystocks posts are usuually garbage ,but this one is on the money(stock) !
"Doooooomed" ,you'd normally be right ,but not this time. Why ? you didn'nt ask 😉 because more or less ALL of his trading bedfellows are f...ked as well ..so when you lump them together instead of "dooooomed" and into the abyss with you all you end up with is a round robin cycle of pass the garbage until no one is "doooomed" at all.
The moral of the story is don't fight the central banks ,but remember they're only standing behind you until they're not so you don't want to be the patsy left without a chair in this game.

 

[InTheMoneyStocks]

The Fed Gone WildSince June 7th, 2010 the U.S. Dollar Index has declined by more than

Since June 7th, 2010 the U.S. Dollar Index has declined by more than 12.0 percent. This means that everyone that uses this currency has seen their purchasing power diminish substantially. Please realize when the U.S. Dollar index declines the stock markets around the world will inflate and trade higher. The declining U.S. Dollar Index has been the catalyst for the stock markets trading higher since the 2008 financial collapse. The plan by most central banks and governments has been to simply inflate the stock markets back to health. The question now that many people must ask is if this is the right medicine for the sickness? After all it is this same remedy of induced inflation that has caused this problem in the first place.

When the U.S. Dollar declines the users of the dollar will have to pay more for gasoline, heating oil, food, and most commodities. This is a direct tax on the U.S. consumer when most of the necessities of life go higher in price. Can the already strapped U.S. consumer withstand these price hikes at this time? Remember this is a time when many people are unemployed and smothered in debt. The foreclosure problem does not seem to have any end in sight and may linger on even longer after the recent robot signing scam that was done by the major banks. Please remember that one out of every seven Americans are now receiving assistance from the government which is not a sign of recovery. Who is really benefiting from this weaker dollar?

Gold has been surging since March 2009 when the stock market made a low. Gold is telling us that money is being created and thrown at the stock market in order to inflate it right back. Gold is now the worlds reserve currency. When gold goes up with the stock market it is telling us that investors around the world have lost faith in the fiat currencies around the world. The only way that gold will really decline is if the stock market goes into a deflationary tailspin much like it did in 2008 when the stock market crashed. Even at that time gold still held up better than the stock market did. Do the people at the Federal Reserve see this? Are they not mathematicians, statisticians, Ph D's, MB A's, and any other title that you can think of. Yet, they cannot see any of these problems emerging and just play stupid when everything hits the fan. 'Joe the plummer' could have see most of these problems coming. Now the Fed is starting to create new bigger problem.

In life people are supposed to learn from their mistakes and not try to make those mistakes over. However, the same tricks have worked for so long that these methods have now become engraved in the brains of the Fed. Get with the times Chairman Bernanke before the Federal Reserve Bank loses all credibility. Just look at the damage that former Federal Reserve Bank Chairman Alan Greenspan did in his career running the central bank. You are simply following in his footsteps.

Nicholas Santiago
Chief Market Strategist

 

[Liquid validity]

Re: The Fed Gone WildSince June 7th, 2010 the U.S. Dollar Index has declined by more

I personally hope its a strategy of just holding station with stocks in a decade long view.
Its a fine line to tread, but what are the options, pull the plug and potentially allow a 1929 like scenario.

I can see where the concerns come from though, is it just a short term political boost to markets as opposed to genuine safety measures?

I really do hope its just a case of maintaining a sideways pattern for a number of years, because if its not, it will backfire eventually in a spectacular way.

As we approach 2010 highs it will be interesting to see what happens next, the DOW could be forming a top already, and volume is certainly low.

 

[InTheMoneyStocks]

The Truth Revealed: The Biggest Ponzi Scheme Ever

The markets jumped higher again today as the U.S. Dollar continued its rapid decent. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $118.13, +1.12 (+0.96%). Like a plane in a nose dive, the Dollar is showing no signs of stabilizing. In all fairness, the Federal Reserve has the Dollar doing exactly what it wants. A weaker Dollar creates a fake wealth effect as equities and commodities move higher to compensate. In theory, if the Dollar drops 10%, stocks should go up 10% to maintain their balance and real value. The general trusting public will see this as an increase in wealth, spending more, buying more, but in real terms they have gained nothing. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $22.36, -0.06 (-0.27%). The Dollar is not far off the 2009 November lows and may have its sights set on that double bottom. Long term, expect it to be far lower.

As any educated investor must realize, the U.S. Dollars drop is not going unnoticed by other countries. Many leading powers are racing to devalue their currency faster than the U.S. The idea behind this is the cheaper the currency of any country, relative to its neighbors, the cheaper that countries goods will be for export. If exports rise, jobs increase. This is known as a currency war. We have seen Japan intervene and rhetoric with China explode. This path of racing to devalue one's currency is treacherous. One wrong move and currencies all over the world could collapse, much like Lehman did and other financial companies almost did in the snow ball effect. The major difference would be, the government was able to intervene with the financial firms. In a currency collapse, no government will be able to stop it. In the short term the U.S is playing a game of chicken as it relies on China and other countries to buy its debt thus infusing money into the system. However, as the Federal Reserve drops the Dollar day after day, countries like China are threatening to cease their hungry nature for U.S debt. This is exactly why the Federal Reserve is now forced to buy treasuries. They must make up for the lost demand from other countries as they **** them off by killing the Dollar. Bottom line is this, should other countries stop buying the U.S debt totally, the Federal Reserve would never be able to handle the impact. This is a game of chicken. Who will swerve first?

Also, this QE2 (quantitative easing two) is a total joke. This is the ponzi scheme of all ponzi schemes. The Federal Reserve is buying their own debt. Granted, technically they are not part of the government but let's be realistic here, they work together and it all comes out of the same pot in the end. The Federal Reserve is giving the American public fake statements much like Bernie Madoff did to his poor investors. They are paying one credit card off with another and paying that one off with an other as well. In addition, in their basement they are running printing presses 24 hours a day, diluting each hard working Americans savings and earnings. Mark this article folks, history will show this to be the biggest ponzi scheme ever. It will cause a melt down in the global system that makes the financial collapse look like a rain drop in the lake.

Even if the printing of trillions of Dollars by the Federal Reserve does somehow restart the jobs market which is unlikely, the greater fear must be the next bubble forming. Treasuries and currencies. If the economy does recover, inflation will spike massively, commodities will soar and the buying power of the U.S. consumer will shrink in a huge way. The Federal Reserve is hoping the public is trusting enough to believe they will then handle the inflation correctly. However, not once in history has the Federal Reserve been ahead of the curve in handling any major issue. Just think of all those baby boomers on fixed incomes when the Dollar is worth half of what it was. The Federal Reserve is playing a game here that is probably the most dangerous ever played. Unfortunately, we, the people will pay the price.

Gareth Soloway
Chief Market Strategist

 

[Depth Trade]

Re: The Truth Revealed: The Biggest Ponzi Scheme Ever

People are clueless about what's going to happen, we are going to get slammed hard.

 

[oildaytrader]

Re: The Truth Revealed: The Biggest Ponzi Scheme Ever

Federal reserve was mainly responsible for the depression, it increased money supply which lead to the speculative gambling of 1928 wall street crash.

If Gold standard had not been abolished, S and P would be at 400 today.S and P has not gone up ,it is the fictitious wealth creation by printing money which has has depreciated the buying power of money.The long term outlook is negative , and investors are paying 5 year average p/e ratios for a negative outlook , they should be paying p/e ratios half of current p/e ratios for S and P .

 

[wackypete2]

Re: The Truth Revealed: The Biggest Ponzi Scheme Ever

"In FED we Trust"

Isn't that printed on the money nowadays?

Peter

 

[Martinghoul]

Re: The Truth Revealed: The Biggest Ponzi Scheme Ever

Good lord, this is beyond ignorant...

 

[FX Bandit]

Re: The Truth Revealed: The Biggest Ponzi Scheme Ever

The biggest ponzi scheme ever? My choice would be unfunded state and public sector pensions.

 

[Liquid validity]

Re: The Truth Revealed: The Biggest Ponzi Scheme Ever

For the time being at least, China does need America as a consumer of its exported goods.
Bit like a shopkeeper getting p!ssed off at one of its biggest customers asking for a credit extension.

China is the shopkeeper, America is the big customer with its hand out looking for more credit. China doesn't like it, but still believes America is good for it.
After all, who else could or would fill the hole left in Chinese exports...

Massively over simplified analogy it has to be said. A long term continuation could or maybe would lead to the scenario the OP pointed at. Not a possibility to be ignored, I still think a 1930's style bear market is far from ruled out:
http://www.sharelynx.com/chartsfixed/USDJIND1930.gif

What I'm hoping the alternative will be is the 1970's flatline instead:
http://stockcharts.com/charts/historical/djia1900.html

Ultimately its a wait and see and be prepared just in case :|