Category: INO.com Contributors

Dollar Index, Gold And Silver Updates

Posted on by Aibek Burabayev

The summer sure has flown by. It was full of events, and we got a new all-time high gold price then. The fall should be an interesting season, as well as “The Volcano Awoke” for precious metals and more “eruptions” are expected ahead.

I updated the charts for you below, and the US dollar index (DXY) daily chart will open this post.

Precious Metals

The majority of readers voted earlier that the dollar index will reach the upside of the red trend channel. The second most popular choice that DXY will not exceed the former top of 94 and continue down (Extremely Bearish) paid well as price indeed couldn’t overcome that barrier and dropped again. Then there was another attempt, and another drop as the chart structure has shown seesaw moves within a black channel. It affected the precious metals price as they have been trapped in the sideways zigzags as well. Continue reading "Dollar Index, Gold And Silver Updates" →

Precious Metal Futures Sell-Off

Posted on by Mike Seery

Gold Futures

Gold futures in the December contract settled last Friday in New York at 1,974 while currently trading at 1,931 an ounce, down about $43 for the trading week still stuck in a 3 week consolidation.

If you look at the daily chart, we generally trade between 1,900/2,000, looking to break out above or below those critical levels in the next several days. I'm not involved in gold at the current time, but I do have a bullish bias as I think higher prices are ahead as prices are consolidating the massive run-up in price that we've witnessed over the last 6 months. Presently I also have a bullish silver recommendation as we're very close to getting stopped out of that trade as the US dollar is up about 50 points today, throwing some water on the bullish trend.

Gold prices are trading below their 20-day moving average for the first time in months, but still far above their 100-day. The trend is neutral to higher, so sit on the sidelines and wait for the breakout to occur; therefore, the risk/reward would be more in your favor as trading choppy markets are very difficult.

TREND: MIXED - HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Silver Futures

Silver futures in the December contract is trading lower for the 3rd consecutive session down another $0.25 at 26.63 an ounce as prices are bouncing off of major support on the daily chart.

I have been recommending a bullish position for the last couple of months from the 18.61 level, and if you took that trade, the stop loss has now been raised to 26.29 on a hard basis only as I'm not willing to risk any more than that critical price level. At the current time, we are just an eyelash away from being stopped out and if that does occur, look at other markets that are beginning to trend as I think we will consolidate in silver for quite some time. Still, I do believe the precious metals will continue to move higher over time. Continue reading "Precious Metal Futures Sell-Off" →

Seeing Beyond The Black Swan Event - Part 2

Posted on by Noah Kiedrowski

And just like that, the S&P 500, Nasdaq, and Dow Jones hit their all-time highs, and the COVID-19 market sell-off had been erased. Just before the COVID-19 pandemic struck the markets, Ray Dalio was recklessly dismissive of cash positions, stating "cash is trash." Even Goldman Sachs proclaimed that the economy was recession-proof via "Great Moderation," characterized by low volatility, sustainable growth, and muted inflation. Not only were these assessments incorrect, but they were ill-advised in what was an already frothy market with stretched valuations prior to COVID-19. I'm sure Ray Dalio quickly realized that his "cash is trash" mentality, and public statements were imprudent. The COVID-19 pandemic has been a truly back swan event that no one saw coming. This health crisis has crushed stocks and decimated entire industries such as airlines, casinos, travel, leisure, and retail with others in the crosshairs.

The S&P 500, Nasdaq, and Dow Jones shed over a third of their market capitalization at the lows of March 2020. Some individual stocks lost over 70% of their market capitalization. Other stocks had been hit due to the market-wide meltdown, and many opportunities were presented as a result. Investors were presented with a unique opportunity to start buying stocks and take long positions in high-quality companies. Throughout this market sell-off, I started to take long positions in individual stocks, particularly in the technology sector and broad market ETFs that mirror the S&P 500, Nasdaq, and Dow Jones. It was important to put this black swan into perspective and see through this crisis on a long term basis while viewing COVID-19 as an opportunity that only comes along on the scale of decades.

Most Extreme and Rare Sell-Off Ever

The abrupt and drastic economic shutdown and velocity of the U.S. market's ~30% drop within a month bring parallels to the 1930s. This sell-off was extreme and rare in its breadth, nearly evaporating entire market capitalizations of specific companies. The pace at which stocks dropped from all-time highs was the fastest in history. The major averages posted their worst week since the financial crisis (Figures 1 and 2). The Dow had its worst month since 1931, and the S&P had its worst month since 1940. Continue reading "Seeing Beyond The Black Swan Event - Part 2" →

Own Tesla Without All Of The Risk

Posted on by Matt Thalman

If you are like most investors, you have been watching the historic, mind-blowing run Tesla has had in 2020. Or maybe you didn't realize that Tesla Inc. (TSLA) is up more than 429% since the start of 2020. Yes, you read that correctly, Tesla is up more than 400% during a time when most companies are struggling due to the pandemic and business shutdowns the country dealt with back in the spring.

But, after seeing that sort of performance, you must be asking yourself one of two questions. First, can this continue? And is it worth the risk of buying Tesla, at let's say an all-time high, and having the stock roll-over on me days or weeks after dumping money into it?

Well, yes, Tesla can theoretically continue to run higher. I am not saying that it will or that it will not. What I am saying is, is that yes, it could continue running higher. But to the point of whether it is worth the risk, well, the same can be said. Tesla could roll over tomorrow and lose 50% in a matter of days or weeks.

So, the real question is, "how can I buy Tesla without taking on so much risk"? Continue reading "Own Tesla Without All Of The Risk" →

US Crude Production Stages A Modest Rebound

Posted on by Robert Boslego

The Energy Information Administration reported that June crude oil production rebounded by just 424,000 barrels per day, averaging 10.436 mmbd, following a 2 million barrel per day collapse in May. That compares to the EIA’s weekly estimates (interpolated) of 10.900 mmbd, a figure that was nearly 500,000 b/d higher.

Monthly US Crude Production

Rebounds were largest in Texas (227,000), Oklahoma (102,000) Wyoming (57,000), and New Mexico (51,000). Given the huge reduction in May, production dropped by 1.624 mmb/d over the past 12 months. This number only includes crude oil. Other supplies (liquids) that are part of the petroleum supply fell by an additional 136,000 b/d from a year ago. Continue reading "US Crude Production Stages A Modest Rebound" →