Trading Market Commentary July 28, 2017


Let's consider the actual driver of the markets, economic climate, Modern Day Monetary Theory, and most just about anything else: The Fed's two weekly confessionals and exactly how much fiat money has been “made up.” 

In months of April, May, and June, the exact rate of increase of the M1 (cash as well as demand deposits) had been puffed up at the 6.7% annualized rate. However, in the most up-to-date confession period concluding on July 17, we are getting larger at 9.5% annualized rate.

An idiot can easily see that this much money entering the economy and automatically presume (rightly or otherwise) that there is going to be tons and lots of “leakage” into the marketplaces. Please see my post here about this subject.

US Market  

A nervous start for the American markets with the NASDAQ composite taking the vast majority of agony, ultimately recuperating from the weak Amazon number (-4%). The DowJones cast in fro until eventually moving in the black. The month of July and also August is historically weaker months for volume level. Therefore any significant order or perhaps Q2 earnings miss out drive prices a lot more than normal. We continuously witness the spread between American and German 10’s (the decade) narrowing as the capital moves.

For the last week, the main Indexes submitted a mixed overall performance. Even though the DowJones leaped by 1.2%, the S&P500 dropped by less than a basis point, and the NASDAQ slipped by 0.2 %.

European Markets

Eurozone has been jumpy from the opening bell with a lot action following on coming from Thursday's trading session. The CAC40 and FTSE100 closed lowest downward around 1% as the IBEX35 and DAX30 both closed around -0.5%. The chatter is that money has decided to sell seeing an excellent run so far, with traders and investors getting into cash. The Euro Dollar and British Pound have experienced respectable runs lately even while equities are losing ground.

Asia-Pacific Market

A weak Asian-Pacific market closed mostly lower during trading on Friday. With the KOSPI (The Korea Composite Stock Price Index) and Aussie ASX200 off around 1.55% each. The Japan's Nikkei225 gave up another 0.6% as well as the yen currency traded back to the mid 110’s handle. With Shanghai market, the one and only core Index that finished positive as the HK's Hang Seng dropped -0.6%. The sell-off had been broad based; again financials sector perceived to take their share of the whipping, perhaps affected by European market declines and also notably concerns of Deutsche Bank.

Gold Market

Yellow metal prices rallied for the 3rd straight week with the Gold advancing 1.9% to finish at 1268 before the Wall Street close on Friday. The advancement unfolds together with ongoing weakness in the US Dollar with the DXY (US Dollar Index) trading at the yearly lows. My long-term point of view on Gold continues to be the same-bullish. My entry at 1243 and 1252 is heading nicely towards designated T/P at 1292. However, prices in the mean time tend to be at risk for a near-term correction since we are heading into the month of August open.

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