Get started

QE

Gold to Silver Ratio. Let's step back for a bit.If you are familiar with the Gold to Silver ratio (XAUXAG) it shows us how many ounces of Silver is required for 1 ounce of Gold. So currently, it takes 85 ounces of Silver for 1 ounce of Gold. Gold and Silver have been monetary metals for centuries, and historically, the Gold and Silver ratio has been 14-16:1. Silver lost most of its monetary standing due to its stock to flow ratio...meaning the higher the price of Silver went, the more Silver would be mined to meet the new demand increasing its stock. gold is the best form of money because it has a high stock to flow ratio. Meaning that if Gold moves up 100% or 1000%, the flow of Gold mined per year will not change because it is rare and hard to mine. It will always be around 2% new flow per year regardless of the price move. Other metals like Copper, and Silver to some extent had low stock to flow ratios because as their prices rose, a lot of new capital and resources was focused on mining Copper and Silver and as mentioned, this would increase the flow and then bring price back down with this new supply. We can argue though that this environment is different for two reason: 1) A lot of miners have not spent money on exploration. They are running low on their reserves and will need new supply. Mining is a business with a lot of costs that cut margin. So many argue that if Silver price does increase, new capital and resources allocated to mine silver will lag due to the fact that new resources will have to be developed. 2) This goes closely to my work on yield and Gold being a confidence crisis metal. I have argues stocks will go higher because there is nowhere to go for yield. Large funds cannot be in cash for a long time. When stocks begin to fall and we go to a risk off environment, this money will have to go somewhere. Some say bonds, but as Ray Dalio has said, it does not really make sense to hold bonds. You really are looking to sell them off to a bigger fool. Enter Gold and Silver. There will be a confidence crisis as I have mentioned. People will realize soon that central banks are out of options. Central banks are not using the term QE, because it would illicit a confidence crisis. People will realize that monetary policy never worked and we are in a QE forever and 0 interest rate environment forever. Paul Tudor Jones, Sam Zell, Ray Dalio and Stanley Druckenmiller are some Billionaires who have advocated increasing one's Gold position in their portfolio from 10% to higher. Paul Tudor Jones saying Gold will be the best performing currency in the next 12-24 months, and Ray Dalio perhaps starting a move into Gold by large funds and institutions. Dalio is well respected by the hedge fund community, and when he talked about Gold a few months ago, a lot of these funds began opening positions into Gold and miners. Silver will have a good move because it is linked with Gold as it is a monetary metal. Gold is about a 7 Trillion dollar market. Silver is less than 700 Billion. It is a tiny market. When money moves into Gold, it will inevitably run into Silver as well. It will be seen as cheap. Silver will move much higher and faster due to the market being so tiny that large amounts of money will have a huge impact. I have talked about the Gold and Silver ratio hitting all time record highs past 92 a few months ago. This weekly chart for me is very exciting as I am seeing a potential head and shoulders reversal pattern which is alluding to a large move in Silver. This seems to coincide nicely with central banks. I believe the Fed WILL cut again in December so in a few weeks. When this occurs, the market will begin to understand that we are going to 0 percent interest rates. So again folks, do not be moved by these moves in precious metals on a daily basis. On a long term basis, Gold and Silver will do well. Remember, when this confidence crisis occurs, we will see Gold and the US Dollar move up TOGETHER!
OANDA:XAUXAG
by Uncharted-FX
Navigating the Market : EURUSD 21st Sept 2019In terms of sentiment & fundamental analysis, last week and this coming week I have established a bias**. The bias is that I am moderately bearish on EURUSD (weak bearish) ECB is in quantitative easing mode whilst the Fed had done a hawkish interest rate cut. **There will be a week when I do not have a fundamental/sentiment bias due to my limited knowledge on the matter but when I do, I put this bias on top of anything else, above Technical Analysis. Having said that though, I rely heavily on Technical Analysis to tell me where and when to trade. In terms of Technical Analysis, the EURUSD is still in bearish mode (tho weakening). I look at the Daily Chart, even though our eyes would scream "EURUSD has gone bearish too long now". That is classical retail trader way of thinking. Picking tops and bottoms, claiming Euro is too cheap etc. I disagree with this completely. I am NOT saying the price would continue moving another 200-300 pips downwards (even though that is what I am anticipating because I am, after all, bearish bias EURUSD) but the average leg/wave for EURUSD (Daily Chart) before it retraces more than 38% of the impulsive wave, is 589 pips. Current wave/leg barely touches the average. So, anyway.. quick hindsight-reading-the-left-side-of-the-chart analysis to make me sound stupidly smart: the EURUSD had been trading in the range since 5th September. It is true on the 12th and the 13th this pair broke above the trading range but that was due to the institutional liquidity run (conveniently coincided with the ECB Rate Decision). The pair traded back inside within the range until NY closes on Friday. Now, time to read the right side of the chart instead. The nearest liquidity that I have identified is in between 1.10250 and 1.10400. Small retracement usually has stacks of orders that institutions love to consume. If price enters this zone I will be on Bearish standby mode waiting for a short signal. If the level I explained above would be broken through then I will be looking at the next level which is between 1.10750-1.0900. It would break the Friday High and that usually activates my bearish mode. Risk Events on Monday for the EU are the Flash Services PMI, German Flash Manufacturing PMI and German Flash Services PMI. Nothing for the U.S
Short
by sufiansaid
Gold is still surging despite strong dollar due to QE hopesThe dollar index has been up for about a week now, though it's slightly down today. So why is gold, which usually moves opposite the dollar, still up? Partly due to recession fears, I'm sure. Gold always offers a safe haven in uncertain economic times, and Fed rate cuts are always bullish for gold. Partly it's sheer momentum, with investors unwilling to exit a bet that's been a winner since May. And partly it's anticipation of further rate cuts. Today the news for gold is good, with President Donald Trump griping about the dollar's strength and threatening to intervene in markets to weaken the currency. The Fed may embark on quantitative easing (QE), which should be bullish for gold. Kitco is predicting that the gold spot price could rise to $1600 in 2020 due to QE.
FX:XAUUSD
by ChristopherCarrollSmith
EURUSDJerome Powell is expected to speak this week concerning the Treasury note yield curve. We’re looking to see an aggressive Fed to address the potential global recession, which means quantitative easing and another rate cut. This is a bearish signal for a weak dollar, due to the Fed debasing the currency by increasing dollars in rotation. This could bring in a high-volume price action. An Easier Fed could mean my technical analysis would be inaccurate, and the EUR would push price to the down side.
Short
by JohnAlmighty
END OF DOWN TREND? POSSIBLE 600 PIP TRADEGood day risk takers, The Market has been in an intermediate down trend since early April 2018, for the first two months of the downtrend it had a strong momentum. Market then started to run out of steam but slowly pushing down until entering an 11 month channel with occasional fake outs to trap sellers and buyers. In November 2018 Market tested support at 1.1216 which is a very important level which held in May-June 2017 and November 2016. Price failed to break through and continued in its channel until testing the support again in 09 March 2019 and now which is current market price (02 April 2019). We see divergence on the weekly time frame for the 14 period RSI which indicates a reversal is eminent. The question we have to answer now is that is this the end of a downtrend(intermediate), there is an 11 year old trend line which the market respects and could possibly be the long term target if the market were to reverse which is also a resistance for the primary downtrend. In terms of fundamentals the US-China trade talks are still the main issue of concern, there is also Brexit for the Euro and Quantitative Easing, all these would be instrumental in driving the pair up to the 1.1800 which is possible were the trend line would extend to at the time.
Long
by ZAYN1001
BND Trendline Warns of Future DownsideBND bounced off a critical support corresponding to November 29th, 2007, the day that yields spiked after BND dropped and miraculously regained 7.5%. We see a downward trend forming in BND indicating a tendency toward rising rates while debts and deficits continue to set record highs. If the FED is not willing to significantly debase the dollar through record levels of monetary injection, the bond market will continue to drop. We are in the danger zone here, watching the bond market is crucial to timing the coming drop. I do not suggest going short until the following conditions are met: 1. Bond market drops considerably over any time frame (testing that critical level of pre-2008 crash or extreme velocity). 2. Stock market begins to face reality - depends on the velocity of rising rates (faster = sooner).
SP:SPXShort
by Derivati_Capital
1
Silver : Negative Interest Rates, QE4, End of PetrodollarAll long-looking indicators point to silver being undervalued vs gold . Top chart shows silver candlesticks vs gold red line as percentage returns since 2006 in the case of these investment trusts. Middle indicator is the Trader's Dynamic Index ( TDI ) which holds a combination of moving average, volatility and momentum trends. Bottom indicator is the infamous Gold:Silver ratio. Silver is sitting on top of the .382 fib level support shown in the chart, which is where the current cost of production resides around $14.75/oz. Low risk, high reward - this is a perfect setup for those interested in making an inflation play going toward negative rates, QE4 and the end of the petrodollar agreement. % Returns Analysis: Silver below Gold -> Silver undervalued Fibonacci Level: Strong support at cost of production near $14.75/oz TDI: Bullish divergence in formation Gold/Silver ratio: 83:1 -> Silver undervalued Note: SLV is not equivalent to owning physical silver. Trade SLV at the risk of fund insolvency and loss of investment - most holdings are suggested to be physical.
AMEX:SLVLong
by Derivati_Capital
Long term charts of USD pairs support DXY bulls?I've recently been looking over long term charts of USD pairs. Technically they show setups for a possible strong move up in DXY. I'm going to post a series of these charts because I believe they may be supportive of a much stronger USD.... This is contrary to my opinion that the USD should weaken given a number of reasons... Freeze in interest rate hikes / possible cuts Halting QT program Record high US deficits I'm going to let the charts speak for themselves as technical setups often defy rational reasoning. Also, technical patterns that date back 50 years are being traded by people with much more money than you or I..... And the lines seem clean. Everything in this modern economy is manipulated.... SPY, Gold, Silver, Currencies.... USD bulls might not be ready to give up without a fight...
by cccpKGB1
SPX Short QT 2019 BreakDown Are you Ready?One year into the runoff and already the rumors is the FEDS may pause more? So,like january, is that a buy the rumor sell the news? Stopping already,must be a huge problem like a global slowdown on the horizon,what a minute, duh.. Is to much being red into the Quantitative Tightening? If they do not end QT then the volatility will be like no other ever witnessed, by a long shot. But if the do end it how will the remaining trillion from the last crisis ever get off the books? You tell me.. Funny Money..Do you have any more of those dollar bills..Ha. WTH Nomura is the primary dealer for all the bonds purchased for the U.S. Of course the Japanese company was only approved after they purchased Lehman's Asian & European Assets. Hmm Even though they applied in 1985. It's all in who you know.. Mama Said So what is you thought great people of the world? Do you continue or do they stop? Trade safe SP:SPX
SP:SPXShort
by Marcus2018
5
How the FED Will Pump SilverHistorically, when the FED decides to raise interest rates it ends up breaking the market. This happened in 2000 and 2008 with the solution being interest rate suppression and quantitative easing. Both of these methods produce abnormal rates of inflation, leading the FED to raise interest rates in an attempt to preserve the purchasing power of the dollar - and it breaks once more. It is practically certain that going into this next recession, the FED will once more lower interest rates in an attempt to stimulate the economy. Yet each time they do this, they must start by filling the "bad debt black hole" in order to prevent a complete breakdown in confidence. The black hole grows proportionally to debt, and considering there is more debt now than there ever has been in history, the initial round of QE required this go around must be unprecedented in scale. QE and suppressed interest rates are what caused commodity prices to take off in 2009, notably gold, silver and oil. We can expect the same result this go around. Once the FED is forced to lower interest rates close to or below 0%, there will be no floor on inflation. That point in time will be the perfect setup for silver to shine. When will it happen? It could take another year or so before we see a FED response to a market suffering from debt withdrawals. SLV calls are particularly attractive in such a scenario, as they offer superior leverage for limited risk. Assuming SLV went from $15 to $60 within two years (well within reason), SLV calls offer reward:risk of up to 70:1. Best positioning may be found after a drastic FFR rate cut. Side note: Largest physical holding of silver, and manager of the SLV fund, just so happens to be JPM. JPM also *coincidentally* held the largest net short position in silver on the futures exchange not long ago (cash deliverable only).
AMEX:SLVLong
by Derivati_Capital
2