On the heels of another solid day in the metals, will this send gold and silver surging even higher tomorrow?
Countdown to FOMC Roulette
By Bill Fleckenstein President Of Fleckenstein Capital
January 29 (King World News) –The indices were mixed early on, with the Dow higher, the Nasdaq lower, and the S&P about flat. Thus far, earnings season has had its share of winners and losers, but I don’t know how much we can read into that until we get past tomorrow’s FOMC meeting…
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Forethought Is Forearmed
On that subject, we can all speculate about what the Fed is going to do, but there is not much point, as I don’t see that anyone has an edge in trying to ferret out how they may tweak QT. I think the best strategy is just to have a plan for what you will do, depending on what the FOMC does and how markets respond.
In my opinion, halting QT can’t do much more than produce a bounce in the stock market, but the metals could respond positively, as so much hatred has been built up during a time when everyone thought the Fed was on its way to exiting its easy money programs. Again, there is not much point in speculating about this, so it’s better to think through different scenarios and actions you may want to take.
Yesterday, I didn’t do justice to the significance of Nvidia’s warning, as I didn’t quite put it in context. It had only been a couple of months earlier when the guidance had been more than $1 billion higher than this quarter will turn out to be. That means business had to drop drastically, and it is quite likely that, prospectively, the outlook is rather poor as well.
I bring this up because there are a lot of semiconductor companies trying to pretend that they aren’t cyclical and aren’t facing issues. Thus, I think that will be a well-stocked pond to fish in from the short side and owning puts.
Turning back to the action, around midday the market weakened, led by the Nasdaq, which fell about 0.75%. Ex that, as you can see from the box scores, the day was sort of a nonevent, but I doubt tomorrow will be.
Away from stocks, there wasn’t too much action. Green paper was flattish, fixed income was higher, oil gained 2%, and the metals were 0.5% higher, with the miners pretty firm, for the most part.
Included below is one question and answer from the Q&A’s with Bill Fleckenstein.
Price Action In Gold
Question: Hi Bill, With gold above $1300 do you believe we might see some good upward action soon? Thx Bill, Take Care!
Answer from Fleck: “Probably, but we need to see what happens Wednesday after FOMC.”
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