Current global markets situation and everything you need to know
To gain an edge, this is what you need to know now.
1) Yields on 10 and 30-year Treasury bonds stayed way above their lows as the stock market fell to new lows. This is a big positive.
2)Oil held way above its Sunday lows. This is a big positive.
3) The Fed is providing unprecedented liquidity of as much as $1.5 trillion. The stock market first rallied 6% on the news and then gave it all back. This indicates that the Fed is not going to be able to save this market. However, Fed's move will stop several potential dislocations in the financial markets and that is a positive.
4) This afternoon near the lows, smart money was lightly and selectively buying.
5) Big part of the selling was due to margin calls. This is a positive because margin calls eventually exhaust themselves.
Gold
Central bank selling in gold continues. Here are the key points.
- Central bank selling in gold, perhaps from Russia, appears to have continued.
- There are rumors that Italy is selling gold to pay for coronavirus expenses.
- When the stock market was halted, gold market was still trading. Over extended investors desperate to raise money sold gold to pay for margin calls in the stock market.
- Now that the momentum in gold has reversed, the momo crowd is aggressively selling gold.
- As gold miner stocks have pulled back on selling in gold, there is a bloodbath in ETFs GDX and NUGT on margin calls.
Smart money continues to buy gold and gold miner stocks on dips.
Complacency
My proprietary indicators are showing that there is still too much complacency among investors. Many investors continue to believe that the market always goes up after brief dips. Such investors are not selling.
"Buy the dip crowd is still alive and well."
Until these two groups of investors start selling, there is only a low probability of a lasting bottom unless there is a good news on coronavirus.
1) Yields on 10 and 30-year Treasury bonds stayed way above their lows as the stock market fell to new lows. This is a big positive.
2)Oil held way above its Sunday lows. This is a big positive.
3) The Fed is providing unprecedented liquidity of as much as $1.5 trillion. The stock market first rallied 6% on the news and then gave it all back. This indicates that the Fed is not going to be able to save this market. However, Fed's move will stop several potential dislocations in the financial markets and that is a positive.
4) This afternoon near the lows, smart money was lightly and selectively buying.
5) Big part of the selling was due to margin calls. This is a positive because margin calls eventually exhaust themselves.
Gold
Central bank selling in gold continues. Here are the key points.
- Central bank selling in gold, perhaps from Russia, appears to have continued.
- There are rumors that Italy is selling gold to pay for coronavirus expenses.
- When the stock market was halted, gold market was still trading. Over extended investors desperate to raise money sold gold to pay for margin calls in the stock market.
- Now that the momentum in gold has reversed, the momo crowd is aggressively selling gold.
- As gold miner stocks have pulled back on selling in gold, there is a bloodbath in ETFs GDX and NUGT on margin calls.
Smart money continues to buy gold and gold miner stocks on dips.
Complacency
My proprietary indicators are showing that there is still too much complacency among investors. Many investors continue to believe that the market always goes up after brief dips. Such investors are not selling.
"Buy the dip crowd is still alive and well."
Until these two groups of investors start selling, there is only a low probability of a lasting bottom unless there is a good news on coronavirus.
-Confirmed cases at 132,527 globally; 4,952 deaths.
-Canadian PM Justin Trudeau’s wife Sophie tests positive after U.K. trip.
-South Korea adds 110 new cases.
-PGA cancels the Players Championship and events across all tours in the coming weeks.