The Dog Days Of Summer Are Here!

Chuck Butler’s: A Pfennig For Your Thoughts 

August 8, 2017

* S. African President in trouble…

* Petrol Currencies leave rubles behind…

* U.S. Credit Card Debt is off the charts!

 

Good day… And a Tom Terrific Tuesday to you! I’m still in Key West, heading back to my home away from home, tomorrow, and then back to St. Louis on Wednesday, just in time for my next infusion on Thursday. I’m loaded up with doctor visits the next couple of weeks, so no sitting around doing nothing for me! HA! We did touristy things yesterday, and I had fun, but too much walking had me in pain by mid-afternoon. We also went on a sunset cruise last night, but… clouds and rain for most of the day, gave way to a beautiful evening and sunset on the ocean!  As soon as I get this out the door, and the kids wake up, we’ll be packing the car and heading north, for our 5 hour car trip. Hey! At least I had something to report that I did yesterday, the currencies and metals sure didn’t! I was greeted this morning by Steely Dan and their song: Black Cow…

It was another of those “dog days of summer” yesterday, as traders sat on their collective hands and did nothing. The story going ‘round is that traders want to see signs of inflation before taking on any more dollar long positions… The IMM futures positions from last week showed that long euros, Aussie dollars, and Canadian dollars, positions were increased, and yen short positions were decreased… That ‘s a good indication that the sentiment toward the dollar has gone to the dogs of summer…

But as I always remind people, a trend is not a ONE-WAY Street, and that there can be volatility within the trend, but once that volatility plays out the asset returns to the underlying trend. And that’s what we’re seeing now, as the dollar had its day on Friday, but has drifted since, and soon, will be on the slippery slope once again… At least that’s my opinion, and I could be wrong! 

Yesterday I told you that the euro was creeping toward 1.18 again, and sure as the sun rises each day, the single unit did climb above 1.18 again by the end of the day, which is where it sits this morning. The best mover overnight though was the Norwegian krone, which, as I’ve told you previously, is getting love from the rise in the price of Oil, and from the rise in the euro. Overnight, the price of Oil moved higher, so the krone had two things going for it once again… 

The other mover yesterday was the S. African rand, which on Friday was getting sold like funnel cakes at a State Fair, because of the news of the Gold mine shutdowns that I told you about yesterday. But then along came a “confidence vote” for President Zuma, of whom the markets do not like, and the first round of the vote was for “no confidence” and the put the rand on the rally tracks. The second round of the vote is today, and if Zuma is ousted, then the rand will continue to rally, but if survives, all this rally will be wiped out… 

China reported yesterday that their reserves grew for a 6th consecutive month, as it appears that the flight of capital has backed off, and China doesn’t need to defend their currency with reserves. The other thing that’s helping their reserves value is the fact that the currencies they do own have increased in value VS the dollar in the past 6 months… 

But any way you slice it, China’s reserves have increased, and that’s a good thing, considering China’s debt position. I just wrote about this in my weekly letter for the Dow Theory Letters (www.dowtheoryletters.com) and while I’m not going to spoil anyone’s appetite that subscribes to the DTL, I will tell you that China’s reserves position goes a long way toward the comfort level that investors have with China.  

I don’t know if you’ve noticed or not, but after a couple of years of daily markdowns of the renminbi, the currency seems to have turned the corner on those daily markdowns. And with the renminbi appreciating, the Singapore dollar follows suit… Yes, I’ve talked about this before, but for any new readers, it’s important that they are aware of the trading pattern of these two..  Singapore has to keep their currency in line with the renminbi, to compete with the Chinese for exports. So, when the renminbi moves in either direction, the Sing dollar follows… And right now that’s a rally mode for the Sing dollar. 

Well, Russia was in the news again last night, and not for all the junk that’s going on in the press, but for an announcement of how they will retaliate for the extension and increase of the sanctions from the U.S. It appears that Russia is prepared to increase their efforts to end their dependence on the dollar.  I’ve talked about this before, so this isn’t new to you, dear reader, but Russia has been accumulating Gold faster than China, and has a goal of ending the dollar standard. 

So, Deputy Foreign Minister Sergey Ryabkov  was quoted yesterday saying, “The Russian government will intensify efforts to cut the country’s dependence on US payment systems and the dollar as a settling currency.”  

I told you above that the price of Oil rose overnight, and that has helped the Petrol Currencies immensely in recent days… One laggard of the group though is the Russian ruble, which is dealing with a rise in inflation in the country, along with the increased sanctions, and a question of whether or not the Central Bank of Russia (CBR) is going to continue to cut rates as the year moves along. 

Speaking of the sanctions that the U.S. placed on Russia…  James Rickards at www.agorafinancial.com sent me this yesterday and I just had to share it with you. You can find the whole article at the link, but here’s a snippet: “The law says that U.S. companies are not allowed to help Russian companies with Arctic oil and gas exploration. But the law also applies to non-U.S. companies that help Russia. That’s a big deal in Europe, where national energy champions like BP, Royal Dutch Shell, Total and Eni had plans to do joint ventures in the Arctic with the Russian energy giants Gazprom and Rosneft. Now the EU is considering sanctions on the U.S. in retaliation for U.S. sanctions on their energy companies. Congress meant to hurt Russia. Instead, they hurt Europe, and now Europe is ready to hurt the U.S.” 

That’s what you call a classic example of “unintended consequences” and reminds me of something my mom used to say… “you made the bed, now go lay in it”… 

And Gold… the dog days of summer have really set in with the Gold trading as only 119,000 contracts were traded yesterday in Gold, and the price only changed a $1 and some change…  The shiny metal is up a few bucks in the early morning trading today, but that hasn’t been a good indicator of what “the boys in the band” will do each day, so we’ll just leave it at that, Gold is up in the early morning trading. 

The U.S. Data Cupboard had the June Consumer Credit (read debt) and it wasn’t as high as expected, as it printed at $12 Billion instead of the $18 Billion that was forecast. I’ve got something in the FWIW section on Consumer debt for you today, so keep reading!  

It also had the LMCI, or did it?  Actually, the Fed has discontinued the LMCI… Here’s the skinny.. As of August, the Federal Reserve’s Labor Market Conditions Index has been discontinued. The report released in July for June is the last of the series. The Fed’s explanation is posted below….

“We decided to stop updating the LMCI because we believe it no longer provides a good summary of changes in U.S. labor market conditions. Specifically, model estimates turned out to be more sensitive to the detrending procedure than we had expected, the measurement of some indicators in recent years has changed in ways that significantly degraded their signal content, and including average hourly earnings as an indicator did not provide a meaningful link between labor market conditions and wage growth.”

Chuck again… Well isn’t that special, in my best Church Lady voice..  I guess the report wasn’t giving the Fed the inflation numbers they wanted to see, so they scraped it…  Sort of like a Mob boss in the movies, they don’t like the performance of a guy so they “rub him out”… 

The Data Cupboard only has a third tier data print today, the Small Business Index, which I would expect to show weakness.

To recap, these are the dog days of summer, and well, the currencies and metals are sure showing us that, as they barely moved yesterday. Dollar traders are waiting for signs of more inflation, and they aren’t going to get it, but that’s just me talking… S. Africa might have a new president by the end of the day, and that would make rand traders happy. The euro has climbed back to 1.18, and Gold is up in the early morning trading today… 

For What It’s Worth… This comes to us by way of MarketWatch and is about how the U.S. Consumer is credit card debt up to their collective eyeballs… It can be found here: http://www.marketwatch.com/story/us-households-will-soon-have-as-much-debt-as-they-had-in-2008-2017-04-03?link=MW_popular

Or, here’s your snippet: “American consumers just hit a scary milestone.
They now collectively have the most outstanding revolving debt — often summarized as credit card debt — in U.S. history, according to a report Monday released by the Federal Reserve. Americans had $1.021 trillion in outstanding revolving credit in June 2017. This beats the previous record in April 2008, when consumers had a collective $1.02 trillion in outstanding credit revolving credit.

“This record should serve as a wake-up call to Americans to focus on their credit card debt,” said Matt Schulz, a senior industry analyst at CreditCards.com, a credit card website. “Even if you feel your debt is manageable right now, know that you could be one unexpected emergency away from real trouble.”

Chuck again…  Yes, this is real problem folks, and it shows how easy it has been for consumers to get credit cards… I just shake my head at this kind of stuff, for it all will end up in tears.. mark my words… 

Currencies today 8/8/17… American Style: A$ .7927. kiwi .7362, C$ .7896, euro 1.1808, sterling 1.3032, Swiss $.9732, … European Style: rand 13.1483, krone 7.8953, SEK 8.1382, HUF 257.70, zloty 3.6026, koruna 22.1413, RUB 59.99, yen 110.55, sing 1.3608, HKD 7.8222, INR 63.75, China 6.7199, peso 17.91, BRL 3.1266, Dollar Index 93.31, Oil $49.72, 10yr 2.29%, Silver $16.25, Platinum $970.09, Palladium $890.58, and Gold…. $1,266.50

That’s it for today.. A Big Happy Birthday to my long time friend, and buddy that I call brother, Mike Karvas… Mike used to read the Pfennig, but he’s busier than a one armed paper hanger these days, so I’ll call him later today to wish him happy birthday… Mike and I became friends in 2nd grade… that’s a long time ago, folks.. Hey! my beloved Cardinals finally climbed to .500 with a win last night in K.C.!  It seemed like they were destined to be a losing club this year, and still might end up that way, but for now they are even Steven on the year…   The Beatles takes us to the finish line today with their song: Can’t Buy Me Love.. And with that, it’s time to go, I hope you have a Tom Terrific Tuesday, and Be Good To Yourself! 

Chuck Butler

 

Heeeee’s Baaaaacccckkkk!

Chuck Butler’s: A Pfennig For Your Thoughts

August 7, 2017

Good Day… And a Marvelous Monday to you! Well, I’m back writing this morning… I tried like the Dickens to keep my head away from the markets while I was gone… But then I was reading James Rickards’ new book: The Road To Ruin… which by the way, I strongly suggest you put away the sharp objects before reading! I had a marvelously relaxing vacation, first with son Andrew, and his family, wife Rachel and son Braden, and then with youngest son Alex and his girlfriend of 3 years now, Molly… A lot of beach time, just relaxing, and a lot of going out to eat at night, which wasn’t good for my waistline!

The currency market saw ups and downs while I was gone… The first week, it was all about the euro, and its trek to 1.19, and I began to think about how on the trade desk they used to say, “When Chuck’s away, the currencies rally”… But then last week, we saw profit taking and then on Friday the stupid BLS report that got the dollar bugs all riled up and thinking that they will soon see a dollar comeback… I beg to differ… And former colleague and friend, Aaron Stevenson, reminded me on Friday that the markets can remain irrational longer than you can remain solvent…

He was referring to Gold, but it could also be attributed to the dollar hanging on right now… Speaking of Gold… It got whacked on Friday after the Jobs report, so let’s talk about that jobs report before we go on today…

Well, the markets went ga-ga again on Friday, because the Bureau of Labor Statistics (BLS) said that 209,000 jobs were “created” in July… The Unemployment Rate fell to 4.3%, and you should have seen the news stories of the bulls out there on Friday, claiming that the Fed was right to hike rates, and that this report suggests that they will be back on the rate hike tracks soon… That sent the dollar soaring, especially VS the euro, and Gold. OK… here’s where I pop the bull’s balloon each month, when I point out a couple of things that the markets tend to overlook… that is until it’s too late! The BLS added 108,000 jobs with their Birth/ Death hedonic adjustment, that they take a good guess at, after they receive all the data from the surveys… I know I sound like a broken record every month, but until the markets realize that 1/2 of the jobs the BLS reports are a guess, I’ll keep reporting it!

I also wanted to mention that the Avg. Hourly Earnings didn’t grow from the prvevious month, and stand at 2.5% growth on an annual basis… OK, so you’ve worked diligently all year, and your supervisor calls you in for your review, and you get glowing remarks, and you’re sitting there thinking, “I’m in the money, I’m in the money” but before you can finish the song in your head, your supervisor tells you that you will receive a 2.5% raise, and you slump in the chair, and the song in your head quickly changes to: poor, poor pitiful me…

Oh, and the Labor Participation rate tick up to 62.9%… That my friends is a rate that SHOULD be looked at with more interest by the markets, but it isn’t, and so… Well, one day, all this is going to smack them in the face and they’ll be wondering why no one told them ahead of time that it was important!

 

The note I had sent to Aaron on Friday was something that I saw from the GATA folks, who esent me a note letting me know that S. African Gold mines were shutting down for lack of production, and that up to 16,000 S. African workers in those mines could be out of a job… The key here is that the supply of Gold will be greatly reduced, and my note said, “and Gold still can’t buy a bid”… ?????

Sibanyne Gold Corp, Ltd. Made an announcement on Friday… “Sibanye may cut 7,400 jobs as it prepares to close its Cooke and Beatrix West operations, which account for about 16 percent of its planned gold production, the Westonaria, South Africa-based company said today. “ Add those cuts to AngloGold’s planned 8,500 job cuts, that means about 14 percent of the country’s gold-mine workers are at risk, as well…

And the other note I sent to Aaron on Friday was how Ted Butler (no relation that I know of) the silver guru, wrote a report on Friday about how the London Bullion Market Association’s report this week on gold and silver bullion held in London-area vaults indicates that silver supplies are substantially lower than had been assumed… And yet Silver can’t shake off the paper short sales… In Ed Steer’s letter every Saturday, he prints a graph that illustrates the number of days of production it would take to cover the short positions that exist… In Silver it’s 155 days and in Gold it’s 70 days… Those numbers are down from the highs they were a few months ago (180, and 90) but, they are still too, darn many to ever ignore them, like the CFTC has done for years now… You can find Ed’s letter here: www.edsteergoldandsilver.com.

As I look at the currencies this morning, not much is going on as the “dog days of summer” have come upon us and the currency markets. Two weeks ago, it was all about the euro, and the Petrol Currencies, as the dollar kept sinking lower and lower, but then came the profit taking and the euphoria over the trumped up jobs report, and a lot of those gains from two weeks ago, have been watered down.  But, when I was looking at the currencies I did notice that the euro was creeping up on 1.18 again, and the Petrol Currencies, which had been led by the Russian ruble for the last couple of years, but now is being led by the Norwegian krone, are still holding Steady Eddie as I write.

I want to take a minute of your time here with a comment on something that I find to be very important to point out… And that is…  That all this dollar bug euphoria that came out of the wall boards on Friday, is simply wrong… The dollar bugs think that because of this Labor report that the Fed will be back to hiking rates next month when they meet. I have to keep my mouth shut when I sit in a restaurant and hear people talking about how the Labor picture is so strong and that will be the key to higher rates…  I would simply point out to them that the Annual Growth Rate for the U.S. has shrunk from 3.91% in 1972, to 1.01% in 2017..  I got that info from the Fed St. Louis, so don’t be thinking that I just made it up! HA!

But my wife won’t let me talk to people in restaurants, so the only opportunity I have to point this out, is here in the Pfennig! HA! Oooops, I’m not supposed to talk about my wife in the Pfennig any more, so please don’t tell her I made an exception this morning! please!  

Well, as I said above, Gold got whacked on Friday, and apparently $1,300 is the limit the “boys in the band” will allow Gold to move to right now, but with all the shenanigans in Washington going on, the problems in the Middle East, Debt up to our eyeballs, along with debt up to the eyeballs of China, the Eurozone, and the U.K. , and supply problems for Gold & Silver that are going to really become a problem, I just don’t see how the “boys in the band” can keep this lid on the price of Gold much longer… 

The U.S. Data Cupboard got a workout on Friday, with the Jobs Jamboree, but also the monthly Trade Deficit which was larger than expected at $44 Billion… Today’s Data Cupboard has a couple of data prints for us today.  One print  is not a market moving print, but one that’s very important in my mind, and that is Consumer Credit (read debt) for the month of June and it is expected to be around $18 Billion… There’s been a recent trend in this data that is troubling to me, and that is an uptick in the revolving credit total, which tells me that consumers are using the last trick in their book… Uh-Oh!

The other print is market moving, and is the Fed’s preferred data for consumer inflation, and it is is the LMCI (Labor Market Conditions Index). This is the Fed’s own report, one they created, and I believe it will show that the June drop to 1.5% was short-lived, and a bounce back to just below 2% is probably in the cards… 

As I was writing this morning, I thought, Chuck, you didn’t really talk about what’s going on overseas today, and concentrated on the U.S…. Hmmm, I guess that’s right, and I apologize for that, and will attempt to do better tomorrow! 

To recap, the currencies and metals lost their mojo on Friday, when the BLS report on jobs brought the dollar bugs out of the wall boards, and the dollar rallied. I doubt this is something that will continue much longer, and the currencies and metals should be able to rebound this week as U.S. data prints pick up, and we’ve seen how badly the dollar performs on those weak data prints! 

For What It’s Worth…  When I saw this in Ed Steer’s Saturday letter this weekend, I knew I had to highlight it, because it points out all the things in the jobs report that the markets forget to look at when they go all bat-crazy because the BLS “created jobs”…  This is from zerohedge.com and can be found here: http://www.zerohedge.com/news/2017-08-04/where-jobs-were-waiters-and-bartenders-topped-list 

Or, here’s your snippet:We already showed that contrary to the strong headline payrolls print, the sole source of job gains in July was part-time jobs, which rose by 393K in the month, the biggest monthly increase since September 2016, as full-time jobs sunk by 54K. Which is why it should not surprise that of the 209K jobs added according to the Establishment survey, the sector that added the most jobs was the “food services and drinking places”, i.e. “waiters and barenders” category, which added 53,000 jobs, the highest monthly increase since March 2014. There have now been 89 consecutive months without a decline for waiter and bartender jobs, the strongest sector for US employment. Needless to say, these jobs fall within leisure and hospitality, that sector pays the worst wages, an average of $13.35 an hour, and $331.08 a week.”

Chuck again… And they go through more job types and their pay, so check it out if you have time, it’s very “telling”, if you ask me!

Currencies today 8/7/17… American Style: A$ .7912. kiwi .7438. C$ .7885, euro 1.1794, sterling 1.3050, Swiss $ .9734, … European Style: rand 13.4374, krone 7.9495, SEK 8.1445, HUF 257.90, zloty 3.6017, koruna 22.1755, RUB 59.93, yen 110.82, sing 1.3628, HKD 7.8222, INR 63.75, China 6.7239, peso 17.87, BRL 3.1394, Dollar Index 93.45, Oil $48.92. 10yr 2,28%, Silver $16.15, Platinum $961.51, Palladium $873.91, and Gold… $1,262.90 

That’s it for today, a little light today, but not bad for the first time in 2 weeks without following the markets!  I’m writing to you today from another new location… Key West! Yes, we decided on Saturday, that we needed to go on a new adventure, and so we packed and headed to Key West. I’ve never been here before, and I like what I’ve seen so far! Last Friday was Little d’s birthday… Delaney Grace turned 10! I remember going to shows and having Pfennig Readers ask me if I had any updated pictures of Delaney Grace! I trust she had a grand time for her birthday! I hear that once I left St. Louis at its 108 degree temperatures, that it cooled off and has stayed that way… Well, that’s not a usual August! The dog days of summer are here folks…  It’s time to go now, so, I hope you have a Marvelous Monday, and Be Good To Yourself! 

Chuck Butler

 

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Special Bonus Edition

Aug 4, 2017

Dear Daily Pfennig Readers…

It’s our pleasure to be here, filling in for our dear friend Chuck Butler while he’s on vacation.

To introduce ourselves, we’re Mary Anne and Pamela Aden. We write The Aden Forecast letter, and we’ve been happily doing this for 36 years. We cover the major markets, and we’ll be posting some of our articles here.

We also publish Dow Theory Letters. It was founded by the late great Richard Russell and, along with a team of top notch writers, we’ve carried on with his work. Some of these articles will also be posted during Chuck’s R&R.

And finally, you’ll also be receiving articles from GoldChartsRUs, our weekly trading service. Here our top trader covers what to buy, what to avoid, what to do about it and much more.

We hope you enjoy our articles while Chuck’s away.

Chuck’s transition is complete and we’re proud to have him as part of our Aden Group.

Best regards and here’s to good markets,

Mary Anne & Pamela Aden

Today we’re posting an article from Gold Charts R Us.

GOING OUR WAY

Gold rose further this week, reaching an eight-week high yesterday on doubts whether the Fed will raise rates this year as inflation remains subdued per the Fed’s gauges.

Also adding to gold’s luster is intensifying geopolitical turmoil as tensions with North Korea and Russia continue to escalate. In the meantime, the U.S. dollar continues to decline sharply easing the grip on deflationary forces and pushing resources, stocks and precious metals upward.

Most noticeable was crude oil as it reached our first profit target allowing you to secure a 15% gain on half of your position this week.

Copper also edged higher reaching new highs for the move yet again.

The stock market, especially the Industrials, also jumped up to more record highs on good earnings and after the Fed left interest rates alone last week. Yet the Transports declined from the highs likely on higher oil prices as profit margins were seen to fall. Moreover, Transports remain above key support levels and the bullish Dow Theory confirmation remains in play.

The Fed is dominating the markets, and one unknown is how the markets will react when the Fed starts reducing its massive debt on its balance sheet which is scheduled to start, as they said, “relatively soon.”

Meanwhile, gold looks poised for more upside. Gold’s ‘C’ rise hit a higher gear after breaking above $1260. And its next key “make or break” resistance level is near $1300, the previous ‘A’ double peak.

Our Chart of the Week shows gold, the euro and the U.S. dollar index and their relationship.

Note gold and the euro moving together and opposite to the dollar over the past year.  Gold and the euro have been rising together since the Dec 2016 lows while the dollar started its descent.

But something odd happened in June.  Gold abruptly fell while the euro jumped up to a new high, and the dollar fell to a new low.

We don’t think it’s a coincidence that two unusual slip-ups occurred in Jun-early July.  The first was an alleged ‘fat finger’ mistake that pushed gold down, and then silver’s “flash crash”.  In fact, the “flash crash” pushed both gold and silver down to their lows on Jul 7.  This was the low for the move; see second yellow vertical line on chart.

Aside from that month long set back, they’re all back to moving in sync.  That is, gold and the euro rose together while the dollar fell to a 15 month low on Monday.  You could say if it wasn’t for the “mistakes”, gold could’ve been much higher today.  Of course we’ll never know.

You’re probably thinking, yeah, but what about the euro and the dollar, aren’t they about ready to have a breather?  They are, and they’re very overextended.  But gold isn’t.

To read more about Gold Charts R Us, click here.

Special Bonus Edition

Aug 3, 2017

Dear Daily Pfennig Readers…

It’s our pleasure to be here, filling in for our dear friend Chuck Butler while he’s on vacation.

To introduce ourselves, we’re Mary Anne and Pamela Aden. We write The Aden Forecast letter, and we’ve been happily doing this for 36 years. We cover the major markets, and we’ll be posting some of our articles here.

We also publish Dow Theory Letters. It was founded by the late great Richard Russell and, along with a team of top notch writers, we’ve carried on with his work. Some of these articles will also be posted during Chuck’s R&R.

And finally, you’ll also be receiving articles from GoldChartsRUs, our weekly trading service. Here our top trader covers what to buy, what to avoid, what to do about it and much more.

We hope you enjoy our articles while Chuck’s away.

Chuck’s transition is complete and we’re proud to have him as part of our Aden Group.

Best regards and here’s to good markets,

Mary Anne & Pamela Aden

Today we’re posting an article from Dow Theory Letters.

Rich Man, Poor Man

By Richard Russell

MAKING MONEY: The most popular piece I’ve published in 40 years of writing these Letters was entitled, “Rich Man, Poor Man.” I have had dozens of requests to run this piece again or for permission to reprint it for various business organizations.

Making money entails a lot more than predicting which way the stock or bond markets are heading or trying to figure which stock or fund will double over the next few years. For the great majority of investors, making money requires a plan, self-discipline and desire. I say, “for the great majority of people” because if you’re a Steven Spielberg or a Bill Gates you don’t have to know about the Dow or the markets or about yields or price/earnings ratios. You’re a phenomenon in your own field, and you’re going to make big money as a by-product of your talent and ability. But this kind of genius is rare.

For the average investor, you and me, we’re not geniuses so we have to have a financial plan. In view of this, I offer below a few items that we must be aware of if we are serious about making money.

Rule 1COMPOUNDING: One of the most important lessons for living in the modern world is that to survive you’ve got to have money. But to live (survive) happily, you must have love, health (mental and physical), freedom, intellectual stimulation — and money. When I taught my kids about money, the first thing I taught them was the use of the “money bible.” What’s the money bible? Simple, it’s a volume of the compounding interest tables.

Compounding is the royal road to riches. Compounding is the safe road, the sure road, and fortunately, anybody can do it. To compound successfully you need the following: perseverance in order to keep you firmly on the savings path. You need intelligence in order to understand what you are doing and why. And you need a knowledge of the mathematics tables in order to comprehend the amazing rewards that will come to you if you faithfully follow the compounding road. And, of course, you need time, time to allow the power of compounding to work for you. Remember, compounding only works through time.

But there are two catches in the compounding process. The first is obvious — compounding may involve sacrifice (you can’t spend it and still save it). Second, compounding is boring — b-o-r-i-n-g. Or I should say it’s boring until (after seven or eight years) the money starts to pour in. Then, believe me, compounding becomes very interesting. In fact, it becomes downright fascinating!

In order to emphasize the power of compounding, I am including this extraordinary study, courtesy of Market Logic, of Ft. Lauderdale, FL 33306. In this study we assume that investor (B) opens an IRA at age 19. For seven consecutive periods he puts $2,000 in his IRA at an average growth rate of 10% (7% interest plus growth). After seven years this fellow makes NO MORE contributions — he’s finished.

A second investor (A) makes no contributions until age 26 (this is the age when investor B was finished with his contributions). Then A continues faithfully to contribute $2,000 every year until he’s 65 (at the same theoretical 10% rate).

Now study the incredible results. B, who made his contributions earlier and who made only seven contributions, ends up with MORE money than A, who made 40 contributions but at a LATER TIME. The difference in the two is that B had seven more early years of compounding than A. Those seven early years were worth more than all of A’s 33 additional contributions.

This is a study that I suggest you show to your kids. It’s a study I’ve lived by, and I can tell you, “It works.” You can work your compounding with Muni-bonds, with a good money market fund, with T-bills or say with five-year T-notes.

Rule 2: DON’T LOSE MONEY: This may sound naïve, but believe me it isn’t. If you want to be wealthy, you must not lose money, or I should say must not lose BIG money. Absurd rule, silly rule? Maybe, but MOST PEOPLE LOSE MONEY in disastrous investments, gambling, rotten business deals, greed, poor timing. Yes, after almost five decades of investing and talking to investors, I can tell you that most people definitely DO lose money, lose big time — in the stock market, in options and futures, in real estate, in bad loans, in mindless gambling, and in their own business.

RULE 3RICH MAN, POOR MAN: In the investment world the wealthy investor has one major advantage over the little guy, the stock market amateur and the neophyte trader. The advantage that the wealthy investor enjoys is that HE DOESN’T NEED THE MARKETS. I can’t begin to tell you what a difference that makes, both in one’s mental attitude and in the way one actually handles one’s money.

The wealthy investor doesn’t need the markets, because he already has all the income he needs. He has money coming in via bonds, T-bills, money market funds, stocks and real estate. In other words, the wealthy investor never feels pressured to “make money” in the market.

The wealthy investor tends to be an expert on values. When bonds are cheap and bond yields are irresistibly high, he buys bonds. When stocks are on the bargain table and stock yields are attractive, he buys stocks. When real estate is a great value, he buys real estate. When great art or fine jewelry or gold is on the “give away” table, he buys art or diamonds or gold. In other words, the wealthy investor puts his money where the great values are.

And if no outstanding values are available, the wealthy investors waits. He can afford to wait. He has money coming in daily, weekly, monthly. The wealthy investor knows what he is looking for, and he doesn’t mind waiting months or even years for his next investment (they call that patience).

But what about the little guy? This fellow always feels pressured to “make money.” And in return he’s always pressuring the market to “do something” for him. But sadly, the market isn’t interested. When the little guy isn’t buying stocks offering 1% or 2% yields, he’s off to Las Vegas or Atlantic City trying to beat the house at roulette. Or he’s spending 20 bucks a week on lottery tickets, or he’s “investing” in some crackpot scheme that his neighbor told him about (in strictest confidence, of course).

And because the little guy is trying to force the market to do something for him, he’s a guaranteed loser. The little guy doesn’t understand values so he constantly overpays. He doesn’t comprehend the power of compounding, and he doesn’t understand money. He’s never heard the adage, “He who understands interest — earns it. He who doesn’t understand interest — pays it.” The little guy is the typical American, and he’s deeply in debt.

The little guy is in hock up to his ears. As a result, he’s always sweating — sweating to make payments on his house, his refrigerator, his car or his lawn mower. He’s impatient, and he feels perpetually put upon. He tells himself that he has to make money — fast. And he dreams of those “big, juicy mega-bucks.” In the end, the little guy wastes his money in the market, or he loses his money gambling, or he dribbles it away on senseless schemes. In short, this “money-nerd” spends his life dashing up the financial down-escalator.

But here’s the ironic part of it. If, from the beginning, the little guy had adopted a strict policy of never spending more than he made, if he had taken his extra savings and compounded it in intelligent, income-producing securities, then in due time he’d have money coming in daily, weekly, monthly, just like the rich man. The little guy would have become a financial winner, instead of a pathetic loser.

RULE 4: VALUES: The only time the average investor should stray outside the basic compounding system is when a given market offers outstanding value. I judge an investment to be a great value when it offers (a) safety; (b) an attractive return; and (c) a good chance of appreciating in price. At all other times, the compounding route is safer and probably a lot more profitable, at least in the long run.

RICHARD RUSSELL

1924-2015

Special Bonus Edition

Aug 2, 2017

Dear Daily Pfennig Readers…

It’s our pleasure to be here, filling in for our dear friend Chuck Butler while he’s on vacation.

To introduce ourselves, we’re Mary Anne and Pamela Aden. We write The Aden Forecast letter, and we’ve been happily doing this for 36 years. We cover the major markets, and we’ll be posting some of our articles here.

We also publish Dow Theory Letters. It was founded by the late great Richard Russell and, along with a team of top notch writers, we’ve carried on with his work. Some of these articles will also be posted during Chuck’s R&R.

And finally, you’ll also be receiving articles from GoldChartsRUs, our weekly trading service. Here our top trader covers what to buy, what to avoid, what to do about it and much more.

We hope you enjoy our articles while Chuck’s away.

Chuck’s transition is complete and we’re proud to have him as part of our Aden Group.

Best regards and here’s to good markets,

Mary Anne & Pamela Aden

Today we’re posting an article from The Aden Forecast.

U.S. dollar: A bad year, so far

The U.S. dollar fell further this month, posting its biggest quarterly drop in nearly seven years… The dollar is clearly bearish and it’s headed lower in the months ahead.

How can we be so sure?  Well, as you know, markets are always about probabilities. Nothing is set in stone and it’s, therefore, important to be flexible. But if we stand back and look at what’s happening, the big picture is telling us the tide has turned…

Here are a few of the reasons why…

SENTIMENT HAS SHIFTED

Mainly, sentiment has shifted and it’s driving the currency markets, away from the U.S. dollar and into other currencies. Investors are concerned about the U.S. and there’s been a loss of confidence. Investors are feeling somewhat uncertain, especially foreign investors, so they’ve been lightening up on their dollars.

The U.S. economy has pros and cons going for it. But in this uncertain climate, currency investors have generally ignored the good news and reacted to the bad news.

For example, higher U.S. interest rates would normally be good for the U.S. dollar. But since rates are rising into a lackluster economy, it makes investors nervous. Also, with interest rates now poised to rise in other countries, it’s reducing the edge the dollar previously had.

Plus, it didn’t help that the IMF downgraded their forecast for U.S. growth, stating Trump’s target of 3% growth will be difficult to reach for several reasons, like an aging population and so on.

Then there’s the trade deficit (see chart). It’s still huge and this too is putting downward pressure on the U.S. dollar.

It’s also no secret that Trump wants a weaker dollar because it will make U.S. exports more attractive and help boost the economy. So he’s now getting what he wanted…

DOLLAR: LOOK AT DOWNSIDE

Looking at the U.S. dollar index, you’ll see what we mean…

Note the dollar index has stayed below its 65-week moving average, signaling the major trend remains down.

And as we pointed out last month, the dollar index could  likely decline to about the 93 level. This is the next support near the 2015-16 lows.

Going a step further, if the dollar index breaks below 93, it could then continue down to 86.50. In other words, if the dollar index eventually drops below 86.50, it would be super bearish, signaling a big bear market is unfolding.

EURO: Best

The euro has benefitted the most. That’s mainly because the euro is the offset currency for the dollar. So when the dollar declines, the euro rises the most.

The euro is also being boosted by more positive sentiment and better economic signs. The euro has remained bullish by staying above its moving average at 1.0980.

If it now stays above 1.15, it could then continue up to near 1.30. If so, that would be about another 10% gain from its current level.

For more information about The Aden Foreacast, click here.

Special Bonus Edition

Aug 1, 2017

Dear Daily Pfennig Readers…

It’s our pleasure to be here, filling in for our dear friend Chuck Butler while he’s on vacation.

To introduce ourselves, we’re Mary Anne and Pamela Aden. We write The Aden Forecast letter, and we’ve been happily doing this for 36 years. We cover the major markets, and we’ll be posting some of our articles here.

We also publish Dow Theory Letters. It was founded by the late great Richard Russell and, along with a team of top notch writers, we’ve carried on with his work. Some of these articles will also be posted during Chuck’s R&R.

And finally, you’ll also be receiving articles from GoldChartsRUs, our weekly trading service. Here our top trader covers what to buy, what to avoid, what to do about it and much more.

We hope you enjoy our articles while Chuck’s away.

Chuck’s transition is complete and we’re proud to have him as part of our Aden Group.

Best regards and here’s to good markets,

Mary Anne & Pamela Aden

Today we’re posting an article from Dow Theory Letters.

RICHARD’S THOUGHTS ON DOW THEORY

Richard’s Comments

Since I call my site and reports Dow Theory letters, I want to spout a bit of Dow Theory now.

The power and usefulness of Dow Theory has been doubted and sneered at since the early 1900s, but the effectiveness of Dow Theory has been proven over and over again.

Over the years, I’ve examined and followed countless new, improved market techniques and theories, and I’ve yet to see one that outdoes the Dow Theory over any extended period of time.

In the end, what I trust most is the price action of the market.

For those who follow the Dow Theory, I want to delve into one critical thesis. When a primary bull signal is given under Dow Theory, it means that the great primary trend of the market has turned up.

The Dow Theory does not tell us how far up the market will go. It does not tell us how long the bull market will last. The Dow Theory does not tell us the path the market will take as the bull market develops. It simply tells us – The major trend is now up.

I guess I’ve written this a few hundred times, but I’m going to say it again. The primary trend always runs to conclusion. The primary trend can be temporarily manipulated, it can be held back, it can be talked back, but ultimately, as night follows day, the primary trend will fully express itself. It will express itself whether it takes a year, or five years, a decade or more.

Yesterday I read a piece by an analyst in which this analyst claimed that there is no such thing as a primary trend. I read the piece carefully, and my conclusion was that this analyst didn’t know what he was talking about.

Let’s take a bull primary trend. A bull primary trend is seen when an item spends an extended period of time rising. Of course, in the course of the rise there will be many secondary corrections, but each correction will be followed by new highs. All true primary trends end in exhaustion. A primary bull trend ends when the last of the participants have “had enough” and take their profits.

As a rule, bull primary movements end amid great excitement and intense speculation. This occurs as a greedy public rushes in to buy the market while at the same time the “smart money” moves out. This creates the state of exhaustion, since the buyers cannot absorb all the supply that is put up for sale. A bull primary trend ends when the best that can be seen ahead is fully discounted in the price structure.

I should add that during a primary bull market the bull will attempt to rise while taking the fewest number of people with him. He does this with the help of multiple downside corrections.

THE PTI: Bullish too

I developed my Primary Trend Index (PTI) in the late 1960’s and early ’70’s for the purpose of aiding me in identifying the major or primary trend of the market.

My PTI is an amalgam of eight critical averages and indicators. Each indicator is based on the ACTION of the stock market (as opposed to sentiment indicators, monetary issues, etc.).

Thus, the PTI provides a special and unique technical picture which has been of great value to me and my subscribers over the years.

During a strong bull movement the PTI will tend to push up day after day and week after week. Let me put it more simply. When the PTI is rising on a major trendline basis, the inference is that the market forces are bullishly advancing in harmony.

For more information about Dow Theory Letters, click here.

Special Bonus Edition

July 31, 2017

Dear Daily Pfennig Readers…

It’s our pleasure to be here, filling in for our dear friend Chuck Butler while he’s on vacation.

To introduce ourselves, we’re Mary Anne and Pamela Aden. We write The Aden Forecast letter, and we’ve been happily doing this for 36 years. We cover the major markets, and we’ll be posting some of our articles here.

We also publish Dow Theory Letters. It was founded by the late great Richard Russell and, along with a team of top notch writers, we’ve carried on with his work. Some of these articles will also be posted during Chuck’s R&R.

And finally, you’ll also be receiving articles from GoldChartsRUs, our weekly trading service. Here our top trader covers what to buy, what to avoid, what to do about it and much more.

We hope you enjoy our articles while Chuck’s away.

Chuck’s transition is complete and we’re proud to have him as part of our Aden Group.

Best regards and here’s to good markets,

Mary Anne & Pamela Aden

Today we’re posting an article from The Aden Forecast.

A 1990s REPEAT?

The stock market keeps on rolling. Once again, it’s been hitting new record highs, in the U.S. and in many other countries. And despite these impressive rises, stocks are still set to rise further.

We know this may seem unrealistic, but that’s what our indicators are telling us. In other words, even though stocks are overvalued, they could keep going up and become even more overvalued.

In fact, we’re beginning to feel this bull market in stocks could end up being a late 1990s repeat…

This is illustrated on the chart, which is one of our favorites… It compares this bull

market (in red) to the big bull markets in 1974-1987 and in 1987-2000. Note that in those two previous cases, the stock market literally soared.

This time around, the bull market rise looks tame in comparison… and that’s saying a lot…

The bottom line is, despite the rise the market’s already had since 2009, if it continues to follow in the footsteps of these two previous bulls, then stocks could keep rising for a few

more years, reaching levels that’re much higher than most people are expecting.

In other words, more investors will start jumping in, not wanting to miss the boat. And this frenzy could end up being similar to the frenzies we saw during the dot.com bubble in the late 1990s.

You may remember, at that time stocks simply soared, reaching valuation levels that were totally unprecedented.

In true bull market fashion, the stock market was in a feeding frenzy for several years in the second half of the 1990s. Everyone was buying stocks like mad and that’s all anyone talked about. This is typical when bull markets reach maturity.

Currently, however, this hasn’t happened yet. Yes, stocks are hitting record highs but there’s no frenzy in sight.

This will probably come later.

A GLOBAL BULL MARKET

In the meantime, the world stock markets are mostly all rising and that’s another huge plus, see chart. We’ve often noted this is a global bull market but it’s a super impressive one.

Out of the 30 biggest stock markets, for example, 26 posted gains in the first half of this year. Plus, it was the best first half performance since the 2008 financial crisis. Also, half of those 30 markets are near record highs.

This is powerful, further fueling the bullish outlook. That’s even more so because all types of markets are rising… that is, markets in developed countries, emerging markets and frontier markets; these are countries that are moving up the ladder but aren’t yet emerging. So it’s all good.

For now, we continue to recommend riding this bull for as long as it lasts. Keep the stocks you have and if we see a downward correction in the weeks ahead, we’ll probably buy more stocks in some of the stronger sectors.

For more information about The Aden Forecast, click here.

Special Bonus Edition

July 28, 2017

Dear Daily Pfennig Readers…

It’s our pleasure to be here, filling in for our dear friend Chuck Butler while he’s on vacation.

To introduce ourselves, we’re Mary Anne and Pamela Aden. We write The Aden Forecast letter, and we’ve been happily doing this for 36 years. We cover the major markets, and we’ll be posting some of our articles here.

We also publish Dow Theory Letters. It was founded by the late great Richard Russell and, along with a team of top notch writers, we’ve carried on with his work. Some of these articles will also be posted during Chuck’s R&R.

And finally, you’ll also be receiving articles from GoldChartsRUs, our weekly trading service. Here our top trader covers what to buy, what to avoid, what to do about it and much more.

We hope you enjoy our articles while Chuck’s away.

Chuck’s transition is complete and we’re proud to have him as part of our Aden Group.

Best regards and here’s to good markets,

Mary Anne & Pamela Aden

Today we’re posting an article from Dow Theory Letters.

RICHARD’S THOUGHTS ON TAKING ACTION

Richard’s Comments

In all my years of studying people and how they function, I believe one of the least understood areas is that of thinking vs. action.

Sigmund Freud knew a great deal about this area, and he proved it when he wrote, “Thinking is rehearsing.”

In therapy, as investing, people do a lot of thinking. A man goes to a psychoanalyst three times a week for five years. In those five years he talks and talks and dreams about his problems. At the end of the five years he may be surprised to note that not much has changed.

Why has so little changed? Simple, thinking doesn’t change anything (with the possible exception of the way you think). No, change is brought about not by thinking (rehearsing) but by ACTION.

For instance, I thought about quitting smoking for 18 years. I thought about my being hooked, I thought about how bad it was for me, I thought about getting lung cancer, I thought about burning holes in my shirts. It was unbelievably depressing.

Finally I stopped rehearsing. I threw away my last pack of cigarettes, and I have never had a cigarette in my mouth since. My smoking dependency ceased when I stopped thinking and rehearsing, and when I finally took action.

Let me put it another way. NOTHING CHANGES BY ITSELF; you change your life by acting. But why are people so resistant to acting rather than thinking about acting?

The reason is that the status quo feels SAFE, while acting feels DANGEROUS. Nine out of ten people opt for the status quo in their lives.

People in the slums are afraid to leave the slums, people who are workaholics are afraid to relax, people who over-eat are afraid to diet. A neurotic will give up anything as long as he can hang on to the one thing he treasures most — his neurosis!

But the fact is that the status quo is usually a bore and is often unsafe. Think about it: the classic bore is usually the person who is totally comfortable where he is, and he will not even relate to anything different.

All right, what has all this got to do with investing and the market? The answer is, everything.  How many times have you wished that instead of thinking about buying stock X (or selling it), you had actually acted, bought it or sold it? How many times have you cursed yourself because you saw some opportunity but instead of acting, you gave yourself ten reasons why it was better to sit tight and watch?

Successful people ALL have one thing in common–they are willing to act. Failures all have one thing in common, they think instead of acting.

So if you’ve learned anything from this section, you can start by thinking about it. But if you are to actually benefit from this section, you’ll have to comprehend the vast difference between thinking and rehearsing — and ACTING.

Now, on another subject, here are Richard Russell’s Comments on the News

Maybe it’s mean to say this, but I think it’s rather pathetic the way investment advisors, newspaper reporters, TV commentators and the so-called Wall Street gurus all try to explain away the day to day moves in the market.

Good or bad business news is announced and the market rises, stalls or sells off.

In fact, a common complaint is that “good news is bad news.” Strangely, nobody seems to grasp the concept that stocks do not sell on yesterday’s or today’s news — they sell on expectations for the future.

Based on Dow Theory, Wall Street is in a bull market, so the market’s expectations for the future are positive.

Actually, the current business news is mixed, with some areas doing well while other areas are not. This is characteristic of an economy that is tired.

Going back over past years it is instructive to note just how the market and the economy related, once the major stock averages had topped out. Here’s the record:

  •  The S&P topped in December ’72 and the economy turned down 11 months later.
  •  The S&P topped in November ’76 and the economy turned down 13 months later.
  •  The S&P topped in November ’80 and the economy turned down nine months later.
  •  The S&P topped in August ’87 and the economy turned down 17 months later.
  •  The S&P topped in April 2000 and the economy turned down at about the same time.
  •  The latest peak was in July ’07 and the economy turned down two months later.

The Exchange may institute “circuit breakers,” the President may tell us that everything is hunky dory, the Fed may hold back on raising interest rates, unemployment figures may drop to record lows — but the market couldn’t care less.

The market is looking ahead — six months out and beyond. And one way or another, the market is going to fully express itself, sooner or later.

For more information about Dow Theory Letters, click here.

Special Bonus Edition

July 27, 2017

Dear Daily Pfennig Readers…

It’s our pleasure to be here, filling in for our dear friend Chuck Butler while he’s on vacation.

To introduce ourselves, we’re Mary Anne and Pamela Aden. We write The Aden Forecast letter, and we’ve been happily doing this for 36 years. We cover the major markets, and we’ll be posting some of our articles here.

We also publish Dow Theory Letters. It was founded by the late great Richard Russell and, along with a team of top notch writers, we’ve carried on with his work. Some of these articles will also be posted during Chuck’s R&R.

And finally, you’ll also be receiving articles from GoldChartsRUs, our weekly trading service. Here our top trader covers what to buy, what to avoid, what to do about it and much more.

We hope you enjoy our articles while Chuck’s away.

Chuck’s transition is complete and we’re proud to have him as part of our Aden Group.

Best regards and here’s to good markets,

Mary Anne & Pamela Aden

Today we’re posting from The Aden Forecast Weekly Update.

EXCITING MARKETS

Gold, silver and gold shares jumped up to a several week high today.  And gold has had its longest winning streak in two months.  It now looks like the six week decline we call ‘B’ is over (see chart).  This will be reinforced if the dollar remains weak and if they now stay above $1225 for gold, $16 for silver and 80 for the XAU gold share index.

Once the C rise heats up, it’ll be very telling about the overall strength of the market.  A very bullish C rise would be clearly underway once it surpasses last year’s peak near $1375.  This would be a milestone.

Silver’s flash sale was short lived.  Platinum is also bouncing up from a key support level, and it’s adding to the stable of firmness.

The commodities are looking better.  Copper and crude are on the rise, and they have room to rise further. Keep your positions, and buy if you want to add to your positions.

The falling U.S. dollar index has helped  boost commodities. And with sluggish long interest rates while Yellen suggests that rates could stay unchanged this year, it all helped to put pressure on the dollar. The dollar index is at an 11 month low while the currencies soar.

The euro, Swiss franc, Australian and Canadian dollars have all surged this week.  And today’s surprise move was due to ECB president Draghi who pledged to continue the ECB’s asset-purchasing plan through December or beyond.  So the euro jumped to a two year high (see chart).  Keep your positions.

Nasdaq and the S&P500 shot-up,  reaching another record high, along with some of the other indexes earlier this week (see chart).  The stock market remains strong and robust, and earnings season is looking positive.

The S&P500 is very bullish by staying above 2410 and the global stock markets are strong and bullish too. Our recommended stocks are doing well. Keep your positions.

T-Bills  (90-day) rose clearly above 1% this week for the first time in years, while long-term yields are sluggish. But increasingly,  long-term interest rates will likely soon be following short-term rates up. That is, bond prices are headed lower and it’s best to avoid bonds and stay on the sidelines.

For more information about The Aden Forecast, click here.

Special Bonus Edition

July 26, 2017

Dear Daily Pfennig Readers…

It’s our pleasure to be here, filling in for our dear friend Chuck Butler while he’s on vacation.

To introduce ourselves, we’re Mary Anne and Pamela Aden. We write The Aden Forecast letter, and we’ve been happily doing this for 36 years. We cover the major markets, and we’ll be posting some of our articles here.

We also publish Dow Theory Letters. It was founded by the late great Richard Russell and, along with a team of top notch writers, we’ve carried on with his work. Some of these articles will also be posted during Chuck’s R&R.

And finally, you’ll also be receiving articles from GoldChartsRUs, our weekly trading service. Here our top trader covers what to buy, what to avoid, what to do about it and much more.

We hope you enjoy our articles while Chuck’s away.

Chuck’s transition is complete and we’re proud to have him as part of our Aden Group.

Best regards and here’s to good markets,

Mary Anne & Pamela Aden

INTERESTING MARKETS

Today we’re posting an article from GoldChartsRUs.

Gold, silver and gold shares jumped up to a two week high while crude hit a 6 week high. The ongoing U.S. dollar dive has finally given them a boost.  And it now looks like the dreary days of June are behind us.

Our Chart of the Week shows this clearly.  Note how the dollar index and the gold price normally move in opposite directions. But there are times when one leads the other or they even move together for awhile, but they always eventually go back to their normal state that is to move in opposite directions.

Most interesting is their relationship this year.  Note how gold resisted twice near the $1300 area (see green asterisks) while the dollar continued its tumble.  Gold fell back in June in a decline we call ‘B’.

Gold has now regained its posture, bouncing up from its July 7 low, and it happened during the last fall in the dollar. It now looks like gold weakness is over, or just about over.  It’s time to keep an eye on $1300.

The only time it surpassed $1300 for a while was during the Brexit jump to last year’s August highs. You could say, if it wasn’t for this jump, gold would’ve probably resisted near this level.

The dollar indeed bottomed before Brexit and it too jumped up when the British Pound collapsed.

This means once gold breaks clearly above $1300 it’ll be breaking out of the stalemate situation this year.  It’ll become a ‘C’ rise in the bull market, and it would be very bullish above last August’s high.

In other words, it’s time for gold to ‘catch up’ to the weakness in the dollar.

Gold shares just don’t want to fall further. It’s also very interesting to note that this turn of events is coinciding with a four-year head and shoulders bottom in the HUI Gold Bugs index.

As you can see this bottom has been evolving since 2013 and it’s still forming.  And based on this technical pattern, if the index eventually breaks above the neckline (NL), the bottom will be complete and confirmed and gold shares could soar.  So this is something we’re watching.

The stock market rise just doesn’t quit.

The markets seem oblivious to politics.  From Donald Trump Jr.’s emails to Russian involvement in the U.S to an ever growing subprime auto loan problem, the markets don’t care.  Perhaps it’s the calm before the storm considering a number of hot spots around the globe.

Short-term interest rates have been on the climb while long rates are sluggish.  Yet Janet Yellen says the Fed may not have to raise rates more.  This gave gold and the stock market a boost upward while keeping pressure on the dollar.

The question here is, can the Fed’s Yellen and central bank policy markers really drain trillions of dollars in liquidity without harming the economy?  We’ll see.

For more information about GoldChartsRUs, click here.

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