Following the lead of the BoJ, today the ECB announced increased QE along with a new program to buy European corporate debt. Next up will undoubtedly be ETFs and then equities. The madness of The Keynesians knows no bounds as they desperately attempt to maintain their debt-riddled monetary scheme.
Here's your full list:
As you might expect, the initial HFT reaction was to crush the euro which, in turn, rallied The Pig. This led to a spike in the S&P futures and a dump in gold. But then something curious happened on the way to HFT paradise....Draghi opened his mouth....and actual human logic began to set in.
If the BoJ is monetizing everything, installing negative rates and collapsing their bond market...
And if the ECB is now clearly going down this very same path...
Then how in the heck is Mother Fellen going to continue on her alleged path of higher rates? And so what happened next? The Pig sold off sharply, which rallied the euro. This led to a selloff is S&P futures and a spike in gold.
Got it? MADNESS!
So what does the rest of the day hold? Beats me! What are you asking me for? I have no idea!
Seriously...THIS IS MADNESS! It's like how we've discussed the Swiss National Bank. The Swiss...traditionally about the most fiscally conservative people on the planet...now have their central bank printing francs to buy stocks. STOCKS! They own over B of AAPL for pete's sake! FREAKING MADNESS! And now the ECB is going to be monetizing the debt of "non-bank corporations". Are you serious? (Pause for a moment to consider how unlikely and impossible that seemed just 10 years ago. Shit, five years ago!)
At the end of the day, the primary focus for all of us in Turdville however is GOLD (and silver, too) and today's follies are just another nail in the Bullion Bank coffin. WHY? Because if you and I can see the madness of all of this, then there is certainly a growing number of Big Money individuals and institutions that can/will see it, too. And as these folks continue to turn to gold...even in small allocations...the pressure increases on the Bullion Bank Confidence Scheme. This speeds up the timetable for delivery failure and the collapse of the entire fractional reserve pricing structure.
To that end, check today's chart. After falling to an immediate, HFT-driven low of 37.80, I now have a last in the Apr16 gold of 64.10. Not too shabby. I'll be VERY interested to what the action the rest of the day and then overnight, as the Japs and the Chicoms get a chance to react to Draghi and his "bazooka".
Silver fell in sympathy but it bounced right from where we'd anticipated, at the extension of last week's triangle. Very nice. If it makes a move through .80 now, look out!
(And now I have lasts of 69.20 and .64. Ole Whipsaw Clive probably just had a stroke.)
But the real interesting story today is The Pig and it's measuring stick, the POSX. Here's the chart I added to yesterday's podcast thread:
And here's an updated look. A break of the 200-day and then a close below 96.50 should be enough to shove the POSX even deeper and, subsequently, rally gold to new highs above 80. (This chart is stale as it's 15 minutes delayed. I've got a last in the POSX of 96.49)
AND THE HUI!! WOO-HOO!! A close up above 180 today (or anytime soon) and there will be a whole new round of buying that should materialize. Crazy, wild stuff...and very fun to watch!
As I close, here's an up-to-the-minute chart of the euro:
This puts the POSX at 96.55, gold at $1266, silver at $15.63 and the HUI at 178.
Go live your life with joy.