Category: INO.com Contributors

Gold, Should You Own It In 2022

Posted on by Matt Thalman

As we continue to roll into the new year and the market volatility appears only to be strengthening by the day, you may be wondering if gold is worth investing in during these turbulent times.

Well, the real question maybe is why are the markets so turbulent today? There are a few reasons, of course, but the big reason is because of the coming higher interest rates and deleveraging of the Federal Reserves balance sheet. But, the why behind the higher interest rates is what's very appealing to some gold investors today; high inflation.

Gold has forever been the hedge against high inflation. The thinking is that the dollar losses value as inflation goes higher, but it will continue to keep up with inflation, and historically it has pretty well. So, the Fed is currently talking about raising interest rates in the coming month in an attempt to slow inflation but not derail the economic recovery due to the negative effects caused by the Covid-19 pandemic.

So, we know that gold is good when there is high inflation, but do we know if it's good when interest rates are rising? Continue reading "Gold, Should You Own It In 2022" →

Lessons From BTC Price Action

Posted on by Wayne Burritt

If you hang around the markets long enough, you learn a couple of lessons about how they behave really fast. And this holds for BTC:

    1. The first lesson is that things work out like you thought they would.
    2. The second lesson is that things don't work out like you thought they would.
    3. And the third lesson is that things work out like you thought they would, but not when you thought they would.

So, when I took a look at what was happening from a technical standpoint to Bitcoin (BTC) over the past couple of weeks, I have to admit that lesson 3 was in full swing.

Here's what I mean. Continue reading "Lessons From BTC Price Action" →

Can A Dove Change Its Spots?

Posted on by George Yacik

Thankfully, there is at least one area of U.S. society where people are still allowed to disagree, and that's on Wall Street, where there is a clear difference of opinion on what we can expect the Fed to do this year regarding raising interest rates to fight inflation. What's surprising is how widely divergent they are.

Let's start with the most aggressive, or hawkish, prediction. That belongs to Bank of America.

"Following the continued hawkish pivot at the January FOMC meeting, we expect the Fed to start tightening at the March 2022 meeting, raising rates by 25 basis points at every remaining meeting this year for a total of seven hikes, and in every quarter of 2023 for a total of four hikes," BofA economists said. That would put the fed funds target rate at a range of 1.75% to 2% by the end of this year and 2.75% to 3.00% by the end of next year when the bank expects the rate-raising cycle to end.

"The Fed has all but admitted that it is seriously behind the curve," the BofA research note added. "When you are behind in a race, you don't take water breaks," it said, explaining its aggressive forecast. Continue reading "Can A Dove Change Its Spots?" →

Weekly Stock Market Forecast

Posted on by The INO.com Team

This week we have a stock market forecast for the week of 2/13/2022 from our friend Bo Yoder of the Market Forecasting Academy. Be sure to leave a comment and let us know what you think!

The S&P 500 (SPY)

SPY Weekly Chart - Stock Market Forecast

After literally years of watching the S&P 500 top out, correct about 10%, then running in a straight line back to highs due to the Fed printing money. I think this is the lower high that I have been waiting for. As I have stated before, the Fed is losing control of the economy, and if this is true, then this is the best short entry available.

This short trade will live or die based on the action of the Fed, but if I'm right and this is the moment in history where the "pump" fails, the downside potential will be VERY rich.

It's time... now, let's see how wacky things get over the next couple of weeks. As the old Chinese saying goes, "may you live in interesting times"! Continue reading "Weekly Stock Market Forecast" →

Fed Jawbones Mean Business

Posted on by Gary Tanashian

3 month T-bill yield is demanding the Fed raise the Funds rate

And the Fed is listening.

Yesterday I made a sarcasm-tinged post about the parade of Fed jawbones in the media and the coordinated and thus comical desperation they seem to exhibit. The stern message is that the Fed Funds rate could be raised at any time (which is possible even before the next FOMC meeting on March 16, in my opinion).

I would not advise you to listen to those who think they know what the Fed is thinking and insist that the Fed will not dare raise the Funds rate. They will dare and they will do it, barring any significant short-term changes to the current macro. In my experience, the Fed has done what the bond market tells it to do almost without exception. Ben Bernanke held ZIRP for a deplorably long time but that was because the T bill on the chart below allowed him to. Continue reading "Fed Jawbones Mean Business" →