With the US markets having provided the momentum for the opening it was not surprising that Asian equity markets opened with a reluctant bid. Earlier in the day we had heard from the IEA regarding oil supplies and although this was still a discussion point in Tokyo it needed additional enthuses to lift markets higher. This was eventually found in the JPY when again, weakness led to movement  and eventually we were back trading with a 109 handle. Eventually, we saw the Nikkei back in the black closing +0.4% higher on the day. Sentiment alone was insufficient to lift the Hang Seng and that market closed down 0.7%. Shanghai was to close almost unchanged with the currency being marked a little weaker (at 6.4959).

Europe turned negative today after oil prices dipped around mid-afternoon session. These were accompanied by worryingly weak metals prices, a banking sector decline that appears to be moving from country to country (UBS shares down 6% today) and a Euro that spent all the day in negative territory only to be followed by US stocks when the cash market opened. One dealer commented that the DAX looked great at the top and horrible at the bottom as many were caught with false breaks. Closings on the day were weak with the DAX, CAC, FTSE all closing around 0.8% down on the day.

US markets also could not a move either as it seemed many markets are struggling for clues in which direction they should be moving! With the DOW and S+P closing almost unchanged many were thankful the NASDAQ did trade all be it lower! Apple was heavily traded with many calling time on its decline. Currently, at 90.20 it has fallen over 2% but does lie on some strong support at these levels. We had a slew of FED speakers again today and it does appear as though they are starting to talk rates up again.

The DXY closed this evening at 94.16 (+0.3%). Gains were made against the Euro, AUD, and JPY. GBP did make headway after the BOE left rates unchanged but all of those gains had been reversed by the close.

US Treasuries were unnerved by the FED speakers and we saw rates a little higher across the curve. 2’s gained 3bp to close 0.755%; while 10’s gained 2bp to close the 2/10 curve at +99.5bp.

In Europe the German Bund curve was also weaker with 10’s closing at 0.155%; closing the US/Germany spread at +159.5bp. Italy closed 1.50% (+3bp), Greece 7.25% (-5bp), Turkey 9.69% (-4bp), Portugal 3.21% (-0.5bp) and UK Gilts closed 1.40% (+1bp).

The biggest problem with analysis is that we are all human. Anyone who expects someone to forecast the economy or markets based upon their personal view is just out of their mind. Nobody can be consistent for we are all human and make mistakes. The only possible way forward is to achieve a quantified model that correlates everything to show you the trends. If you are looking for someone to be right from a gut perspective, good luck.

To be a good trader you have to go with the flow and NEVER marry one position. Like Bretton Woods, history will dictate it would fail, but that did not stop politicians from trying. The key is TIME and the length of time a trend prevails. The Saudi peg to the dollar will fail. That too is just a question of TIME. Our goal here is to deliver a first class AI system that will provide an analysis that is not driven by bias or human emotion. If you eliminate that, you achieve objectivity.

Attendees from last year’s WEC have had access to the Trader preview site. This was just a static version of what we used for the conference, and does not come close to the final version. The Trader preview was originally intended for demonstration, but this has been a work in progress. We have been working out the kinks for translating Assemble to a high-level language to move to a WEB format, which has not been easy.

Phase I will provide the Reversals and timing on everything in the system. We are looking at the feeds since there have been some bad ticks coming from the data provider, which is not acceptable. We are working on the filters for those errors. Naturally, when you are importing data on everything that moves, it is hard to check all entries every day.

Below is a sample of today’s post:

 

SUMMARY

We should see a trend change come May in NY Gold Nearest Futures so pay attention to events ahead. Since the last key low of 1064.5 established on Thursday December 3rd, the market has continued to press higher reaching 1306 after a 107 day rally peaking on Monday May 2nd. This market has not exceeded last year’s high of 1307.8, which is about 0.13% above the recent market rally yet we have not penetrated last year’s low of 1045.4 either making this an inside trading year. Moreover, we have consolidated for the past 7 days from this last recent high. So far the rally has been a respectable advance measuring some 24%.

Currently, we have not elected any Daily Bearish Reversals from this new high of Monday May 2nd. The immediate Daily Bearish Reversal to watch lies at 1241.3 but focus more on 1240.6. A closing beneath this level will signal a temporary high is in place. Additionally, 1289.6 offers some technical overhead resistance for now. Moreover, our Daily Bullish Reversal to watch stands at 1303 and it will require a daily closing above this level to signal new highs lie ahead. We need a daily closing above 1288.4 to imply a further rally is unfolding technically speaking. We have elected 2 Daily Reversals from the reaction low of Tuesday May 10th leaving us to watch 1288.5 on a daily closing basis to signal a further adavnce ahead. Nevertheless, we did close bearish on our momentum indicator and bearish on the trend indicator.

Since the last low of 1088.3 established the Week of November 30th, the market has continued to press higher reaching 1306 after a 22 week rally peaking the Week of May 2nd. This market has remained as an inside trading year. Last week was a new high at 1306, which was up for 5 weeks from the last minor low the Week of March 28th at 1206. This market has been very strong electing all four Bullish Reversals from that last low as well.

Currently, we have not elected any Weekly Bearish Reversals from this new high. The immediate Weekly Bearish Reversal to watch lies at 1225.3. A closing beneath this level will signal a temporary high is in place. Additionally, a closing beneath 1270.6 would also imply a technical based pause in the uptrend for now.

Following the high of 1307.8 established during January 2015, we have declined into a low at 1045.4 created during December 2015 overall for 11 months electing in the process 4 Monthly Bearish Reversals. The low formed at 1045.4 did penetrate the technical channel at 1070.13 which offered initial resistance. However, this is now presenting some technical support since we have closed back above this level.

Consequently, NY Gold Nearest Futures has bounced from that low established during December 2015 for 4 months creating a reaction high at 1299 during April failing to exceed the previous high. We elected the three Monthly Bullish Reversals from that low at 1045.4. We need to focus on overhead resistance at 1361.9 on a closing basis. A closing above this number will imply a further rally briefly. Failure to achieve such a closing warns of a retest of support. From the reaction high at 1306, we have not yet elected any Monthly Bearish Reversals so support lies at 1061.

PHASE II LAUNCH

 

We are also porting over the trading for Phase II launch. This will enable you to backtest Reversals using various combinations of time from very short-term to long-term as well as for hedging strategies. Each combination produces a different result. You can trade very near-term or step back and just trade with the major trend.

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Institutional Proprietary Tablets

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Since there have been some serious privacy scandals with inputting portfolios into a central terminal, we are working on delivering a tablet where you can input your portfolio and it will download the analysis you need. This way, you have 100% security and no one else will see your portfolio on our end. This means that even the government could not subpoena us to hand over such info as they have done with Apple. Governments around the world will become much worse over the next four years. The only means of security requires self-containment.

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Orlando World Economic Conference Tablets

2016 WEC Orlando

Yes, we will be providing tablets this year to attendees. The tablets will be loaded with some programs and materials.

The New Jersey State Assembly has begun the pursuit of a constitutional amendment to guarantee pension payments for government workers over all other types of state spending. This would naturally include all politicians, which is why they are introducing it. Because spending on education, health, crime, environment, welfare etc. is not guaranteed by the Constitution and is subject to elimination to pay for the pensions of 800,000 current and former public employees, politicians want to amend the Constitution and that means property taxes will SOAR. This means the people of New Jersey have to stop this insanity for once; it is a constitutional amendment, that is it. They will rob everything you have as a constitutional requirement.

Come November, without explaining the seriousness of the issue, the New Jersey Legislature will put a proposed constitutional amendment on the ballot that would provide consistent state payments each year to the $79 billion New Jersey Pension Fund. The best advice is to sell your home and get out now. If this goes through, property taxes will explode as they did in Illinois and the value of your home will drop. Sell and rent, but do not own unless you live in a state like Florida or Texas.

Seven states have specific clauses in their constitutions that protect public employee pensions: Alaska, Arizona, Hawaii, Illinois, Louisiana, Michigan, and New York. We have already seen Illinois on the brink of bankruptcy. Illinois will be completely devastated. There is no hope whatsoever, for changing the Constitution at this point in the game would only apply prospectively. That means these states will see an explosion in taxes over the next four years and they may simply be forced into bankruptcy if they are unable to meet bond payments for pensions come first.

QUESTION: Mr. Armstrong, who would you recommend Trump asks to be his Vice President?

ANSWER: If I were Trump, I would ask Bernie Sanders to be vice president and really stir the pot. The two have one major thing in common: Goldman Sachs says they are dangerous. Hillary can claim she is the only one with a plan to deal with the banks. I suppose that is why they are donating to her. If Trump is the nominee, I doubt Goldman Sachs will be contributing to him. They will probably contribute to everyone besides Trump and Sanders. Picking Sanders would really get things going.

After all, 33% of Democrats in Virginia said they would vote for Trump over Hillary. Trump has brought in more people to the Republican Party than anyone in history. They are the disaffected and what is becoming increasingly self-evident is that the under-50 generation is less likely to simply vote for a party. The elderly Democrats and Republicans would vote for their own party regardless. There is a sea change underway and this is all about the change in politics that our computer has been projecting for 2016 since 1985.

Trump will most likely pick an “establishment” republican to facilitate communication with the hardliners. However, many of the hardliners, like John McCain, may be voted out this time around.

A positive opening for the Nikkei, trading up +1% at the opening bell but sadly could not hold onto the gains and we eventually closed little changed on the day. The Hang Seng was the poor performer closing down almost 1% whilst Shanghai was a touch better. Asia really had little top topics but we have seen futures take Asian markets lower in sympathy with global exchanges. Currently, we see HSI, Nikkei and China 300 all lower between 0.3 and 0.6% weaker.

 

With Asia not providing a direction for the European opening, dealers focused on sentiment and the concerns all Asian indices were closing at or close to their lows. The majority of the day saw all indices in negative territory with the only exception being the UK FTSE which even managed a small positive close. A couple of negatives driving European markets were mixed earnings in an array of sectors but hitting sentiment again was the Banking shares. In Austria shares of Raiffeisen Bank Intl were hit (down 10% today) after its parent (Raiffeisen Zentralbank, not listed) expressed the intention to merge to bolster capital reserves. Also, again in Italy we hear of banking concerns and saw Banco Popolare down 9% (after a Q1 loss) and also Banca Popolare di Milano lose 6%.

 

Utilities were the only sector to return a positive day in the US S+P today, in a day were we saw the DOW down over 200 points (-1.15%) and the NASDAQ down 0.95% concluding the worst day since 2011. Consumer spending concerns are weighing on markets but we have to wait until Friday for some data releases. Disney and Macy’s certainly led the mood in markets today with Macy’s responding with a negative 15% return today. VIX closed 14.4.

 

We saw another day of curve flattening in the US Treasury market today. 2’s were 1bp higher at the close yielding 0.73% while 10’s closed 1.73% a 3bp decline. 2/10 closed +100bp.  In Europe the German curve was limited in its movement with 10’s closing 0.125%; 2’s remain -0.52%. The US/German spread closed this evening +160.5bp. Italy 10yr closed 1.47% (-3bp), Greece 7.30% (-18bp), Turkey 9.73% (-8bp), Portugal 3.21% (-10bp) and Gilts 1.39% (-1bp).

Private blog update: Dow – Euro- Gold – Silver

Private Blog Update Dow – Euro – Gold – Silver

Well, when a politician refuses to admit she made a mistake, what do you do? You go all the way. Believe it or not, Germany is creating flirting courses to help refugee men get lucky. Yes, taxpayer money is now being used to get the refugees lucky with German girls. So if you thought you have seen it all, well, the insanity never ends. There is always room for more when politicians are involved.

Meanwhile, in Munich, a beautiful city, one person was killed and several were injured after an Islamist extremist wielding a knife started randomly stabbing people in the rail station while shouting “Allahu Akbar” (“God is great”).

BTW, now 2/3 of Germans have had enough of Merkel according to the latest polls.

Protests broke out in Greece over the weekend in Athens and the northern city of Thessaloniki. The government is yielding to Brussels and has not figured out that this policy is destroying its own people and their future.

The government passed reforms that they hope will persuade lenders to release more financial aid. They are cutting pensions and raising taxes. The bankers stole the money, yet the people are being forced to surrender their future.

There is absolutely no future for Greece under such policies. Merkel’s hardline against the Greeks is the very reason she let the Muslims in. Merkel promised the German people that Greece would pay back what she lent it. To honor that promise, she has screwed Greece profoundly and is refusing to yield. Coming under intense criticism for her actions against the Greek people, she tried to boost her image by showing compassion to the Muslims and set off an economic invasion of Europe. This is just not going to end nicely. Her support in Germany has crashed and burned, falling below 40%.

“The Dollar Report” explores the role of Goldman Sachs on this issue and the fate of the euro moving forward.

 

Political instability is rising in Saudi Arabia. The Saudi king has fired his longtime Secretary of Energy and the head of the central bank has been replaced. The royal family is now fighting to sustain power.

The fall in the price of oil is having a political impact within the power structure of Saudi Arabia. Eventually, the rise in the dollar on world markets will force the peg to fail. As that develops, we should pay attention for this type of event may lead to a very serious political situation that could change the structure of government. The risks begin to build in June, October, and then next March.