The site will be down today for some updating. It will be back up on Sunday

Gold close above the 1280 Weekly Bullish, yet below the 1299 despite the fact that pushed it up to 1301 after the close. Notice that gold had rallied up to 1318.90, and then crashed really hard and fast. However, it fell as you can see to hold the Weekly Bullish at 1280.10 Our Reversal System proves itself every day that there is a hidden structure of order within the market that can be revealed only with math. Nevertheless, this proves all the theories they teach in school about efficient markets, value investing, to random walks, are just nonsense. They try to explain markets as if reason along determines the trend. They will never learn that such things are beyond the tendency to reduce complexity to a single cause and effect.

Gold closed above 1280 so we should try to retest the high. Do not expect sustainability just yet.

A little light relief for markets ahead of the weekend with core Asian equities clawing back some of momentum lost earlier in the week. The Nikkei did manage a 1% bounce whilst the Shanghai and HSI closed 0.5% higher. Much had been expected of this week given all the Central Bank activity but we head into the weekend still in search of clarity, a pillow of confidence and direction. All news over the weekend will be pointing to the BREXIT vote and its consequences. This will be the most important vote the UK will be making in decades, shaping capital flows the world over.

Europe continued yesterdays bounce with solid 1% gains for FTSE, DAX and CAC and a 2% rally in the IBEX. However, next weeks events will determine not just the rest of the months direction but the direct of Europe.

Gold closed back up but failing to close really strong but leaving the door open for a retest of resistance. This is merely a confirmation that uncertainty persists and even though we saw a rally in GBP, the search for USD liquidity persists, here too it remains below even Daily Bullish Reversals. The British Market remains nervous as dealers widen their spreads and increased margin requirements. Masked in all the BREXIT headlines is the fact many bank share prices are way off levels seen ten years ago and with some (Spain’s Banco Popular) down 90% from their highs. Property remains one of the big issues (with so many bad loans) banks are desperate for a return of confidence to boast the align housing market or be forced the right down and/or recapitalize.

US equities did recover from morning lows only to record one of their worst weeks in a while. The Dow again failed to close above 17800 avoiding once again any buy signal raising concerns of weakness still present. US Indices are all lower but are still performing when compared to the rest of the world YTD. The uncertainty remains into the weekend but as I have already stated, next week has the potential to reshape Europe. The VIX remains just under 20 but then a little insurance policy is always a good thing for next week.

The Bond Market saw a little profit-taking today as well asa few people giving back some of the curve. 2/10’s closed the day 2bp steeper at +91.5bp with 10’s closing at 1.61%. Europe also saw the 10yr Bund weaker closing back in positive yield at 0.017%. There was news that large client flow out of government paper in favour of corporate driving markets recently. 10yr US/Bund spread closed 159.5bp. Italy 10yr closed 1.51% (-3bp), Greece 7.94% (-12bp), Turkey 9.49% (-6bp), Portugal 3.29% (-10bp) and UK Gilt 10yr at 1.14% (+4bp).

We have made two updates on the Private Blog

The central banks are clueless and have no control over the economy. This whole thing reminds me of Australia. I loved going into the Outback, driving through rivers, and seeing ant hills that were taller than the Jeep. I was invited to go to the Todd River Regatta in the middle of the desert. I thought it was a joke. They said, “No mate! Come on!”

I was perplexed at first. How can you have a regatta in the middle of a desert? Well, only Australia could figure that one out. They raced in pretend boats down an ancient river bed where no white man has ever seen water flow. They held the pretend boats up around their waist and raced down the riverbed. It was good fun. I actually joined in on the camel races.

We have the same thing going on now in politics and finance — just living the dream. Negative interest rates punish savers, and bankrupt pensions are creating a collapse in socialism that threatens civil unrest on a grand scale beginning next year (2017). Then we have politicians raising taxes and creating mountains of regulations that nobody can figure out without a lawyer and an accountant preventing small businesses from forming. Those who want to always rule the world  are brain-dead and it is impossible for them to figure out why small businesses are not expanding to create jobs. Duh! They craft pretend theories and run down dried-up riverbeds where there is no water and proclaim to the world they are “stimulating” the economy when they encourage bankers not to lend paying them for excess reserves and then raise taxes because they want to be “fiscally responsible” to the bond holders. You really cannot reconcile these actions and theories. It is just the Todd River Regatta on a grand scale.

QUESTION: If Donald trump issues a tariff on countries like china will that cause the price of goods from china to go up in price?? Also is he correct by saying it will bring jobs back to the united states by doing this? Would overall implementing a tariff be a good thing or is it a bad thing.

ANSWER: Tarrifs would not work and it would have a negative impact. Most people do not realize that China deals with Europe more than the U.S. does. For 2015, the U.S. sold 116,186.3 billion to China and bought 481,880.8 billion from China. People complain about sending jobs overseas, but no one ever talks about the fact that it reduces costs for consumers. To subsidize jobs, consumers need to pay higher prices. The better model is to improve one’s skills to rise in value for employment. It is a national’s comparative advantage. Yes, we have lost the low-level manual labor jobs to countries overseas that were not unionized or overvalued for the skill they presented. The key to advancing is to keep pace with changes. As a programmer, if you refused to learn new skills, you would be obsolete and only able to code in DOS, which is not even in any Windows platform. Who would hire you?

More people are writing books about the Clintons to expose their corruption than any other president or presidential candidate in history. While Bill has dominated if not set a record for sexual scandals, it has been Hillary who dominates all the financial scandals. That really says something for a first lady – no first lady in history ever was the top of corruption like this. Gary Byrne, a former Secret Service agent whose post was directly outside President Clinton’s Oval Office, will reveal what he observed inside the White House while protecting the First Family in a new book entitled “Crisis of Character.” With a second Clinton administration threatening the country — Byrne has come out to say no more.

The Clinton’s scheme has been corrupt from the very beginning. Byrne reports that while serving as a Secret Service officer, he saw Bill’s and Hillary’s political and personal schemes unfold. In his book, “Crisis of Character,” Byrne provides a firsthand account of the scandals — known and unknown — and daily trials ranging from minor to national in scale. He tells of the political dysfunction of the Clinton White House that was obsessed with destroying their enemies in a very vindictive manner. Unsurprisingly, Byrne says that governing was an only afterthought to the Clintons.

Many blamed the BOJ for today’s Nikkei decline, for not announcing additional stimulus measurers, but for whatever reason we found ourselves 3% lower on the day. We have recovered much of this in late US trading but admittedly – it did not look pretty for the cash market. The flight to quality led as usual to the JPY and at one stage touched 103.55 a decline on the day of around 2.5%; negating the stock loss. Hang Seng was also down nearly 2% whilst the Shanghai held in reasonably well (just -0.5%). The Yuan also gained ground (set higher) being fixed by the PBOC at 6.5739. Gold was very strong in Asia, which rolled into Europe but more on this later.

Europe followed suit from FED and BOJ stances reflecting mood with a very weak opening. The Swiss Central Bank also left deposit rates unchanged at -0.75%; with a “no change” from the BOE. Many dealers are starting to question Central Bank authority and their command of the markets, especially if you now reflect on the “Dot Plot” many view the FED were following! European market were saved at the end of the day by a US driven equity rally. The bounce did coincide with reported suspension of European Union campaigning after the shooting Jo Cox (Labour Member of Parliament). The GBP bounced along with stocks and we saw gold retreat from the $1318 area back to sub $1280 to retest the original Weekly Bullish Reversal.

One of the best recoveries we have seen in a while, for the major US indices after a triple digit decline resulted in a 100 gain on the day. The markets saw the VIX retreat from recent highs closing around 19.5 as dealers, are happy with the rally however, remain unconvinced. One price action was slightly more interesting than the others and that was that of gold! Having been appreciating nicely in recent days, the markets were expecting a solid move higher after trading through recent ($1307) highs. We did see new highs set ($1315) but could not be held and we closed back below the days low around $1279. This failure to confirm the daily bullish Reversal will make Fridays close even more interesting.

Bond prices also retreated from their day’s highs as stocks bounced but interestingly we still saw flattening within the US curve. 2/10’s closed at +89bp with 10’s closing at 1.58%. 10yr Bund closed -0.025% closing the US/Germany spread at +160.5bp. Italy 10yr closed 1.54% (+4bp), Greece 8.07% (+8bp), Turkey 9.55% (+5bp), Portugal 3.39% (+6.5bp) and UK Gilt 10yr at 1.11% (-1bp).

QUESTION: Marty; This pop in gold smells like another manipulation. Everyone was saying Soros is selling everything and buying gold. They seem to have gotten the bugs buying with two hands again and they sold it to them. When will these games end? Ever?

ANSWER: No professional trader would EVER divulge his position unless he was trying to exit. Gold did not exceed the technical analysis resistance. It is so easy to get these people to buy the highs every time. That is how manipulations have always worked. They are to the upside, not to the downside. They need volume to make a profit, and never to simply suppress a market with no volume and no profit.

We exceeded the 2015 high which can be positive long-term, but it can also be the kiss of death. Watch the video. The Reversals will always define what is real and what is fake. Just watch the key numbers.

British Labour politician Jo Cox, who was against BREXIT, has been assassinated. A gun-wielding man fired twice, and kicked her as she was lying on the floor while shouting “Britain first!” This is warning what our computer has been projecting; if the BREXIT vote fails, there will be a serious rise in violence in Britain. We will also see the issue of Scotland breaking away from the UK resurface. As we have warned, we are entering the year from political hell with FOUR major political elections: BREXIT, US Presidential election in November, and the German and French elections.

The idea of federalizing Europe to end war was precisely the cause of a right wing rising all around Europe. Brussels is causing political unrest and this is very serious moving forward.