With the Fed deciding to leave rates on hold and with gold hitting $1,300, look at who is bullish.
Here is what Peter Boockvar wrote today as the world awaits the next round of monetary madness: Robert Heller, the former Federal Reserve Governor, had it right yesterday on the Santelli Exchange. He said what’s the point of scheduling an FOMC meeting one week before the election if the election gives them reason to do nothing…
To hear which legend just spoke with KWN about $8,000 gold and the coming mania in the
gold, silver, and mining shares markets CLICK HERE OR ON THE IMAGE BELOW.
It was more than two months ago when Janet Yellen in Jackson Hole said that “the case for an increase in the federal funds rate has strengthened in recent months.” This was repeated by her in the month after and three members wanted to hike in September. As the data hasn’t changed much of late, politics is the only reason why they aren’t hiking today. This comment of mine is putting aside the intellectual debate over the data and whether they should or shouldn’t hike based on it. I’m just focusing on what we’ve heard from voting members over the past two months since Jackson Hole. Odds of a December hike are at about 65%. Either way, the market has already tightened for the Fed. 3 month LIBOR hasn’t fallen one iota since the mutual fund rule deadline passed 2 ½ weeks ago.
Worries over interest rates, both market based and with the Fed, the election and the drop in markets saw a sharp change in stock market sentiment this week. Investors Intelligence said Bulls fell to 41.7 from 47.1 last week. Rather than getting bearish, most went into the Correction camp which rose to a 4 month high at 34 vs 29.8 last week. Bears did rise to a 6 week high but only to 24.3 from 23.1. The 2nd longest bull market in history where any pain has been anesthetized by central banks has flattened the bears and the most bearish many get is ‘we’ll have a normal correction and let’s buy it.’
With Gold Hitting $1,300, I Remain Bullish
US dollar weakness for a 2nd day has gold approaching $1300 again. We can likely chalk up the weakness to the shift in the election polls. I repeat my belief that the US dollar is not on the cusp of breaking out above the 100 level even if the Fed hikes rates next month (and even if Hillary wins). One hike a year is not reason enough for me to get all bulled up on the dollar. As for gold and in addition to its contra move to the dollar, it is trading opposite to the world’s faith in central banks and that faith is clearly waning. I thus remain bullish.
***KWN has now released the remarkable audio interview with Nomi Prins CLICK HERE OR ON THE IMAGE BELOW.
***ALSO RELEASED: BEARS BEWARE: This Just Hit One Of The Highest Levels In The Past 6 Years! CLICK HERE.
***KWN has also released Rick Rule’s timely audio interview CLICK HERE OR ON THE IMAGE BELOW.
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