{"id":45673,"date":"2013-12-22T19:19:18","date_gmt":"2013-12-23T00:19:18","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=45673"},"modified":"2013-12-22T19:19:18","modified_gmt":"2013-12-23T00:19:18","slug":"stocks-fly-oil-rallies-gold-flounders","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/12\/22\/stocks-fly-oil-rallies-gold-flounders\/","title":{"rendered":"Stocks Fly, Oil Rallies, Gold Flounders"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a><\/p>\n

This just in! <\/p>\n

Instead of printing over a trillion dollars in stimulus per year, the Federal Reserve<\/a> announced on Thursday that it will print only $900 billion. <\/p>\n

Whew. <\/p>\n

We dodged a bullet there. For a while I thought the stimulus printing was getting out of hand, but now with this ‘huge’ cutback, looks like our future is inflation free! <\/p>\n

[Squinting and turning my head back and forth] Errrr, maybe we ought to take a look at what yesterday’s Fed announcement REALLY means… <\/p>\n

First up let’s take a step back. <\/p>\n

Had you asked if the Fed would announce its official tapering plan in 2013, your editor’s answer would have been ‘no’. <\/p>\n

It didn’t seem like the time nor place to make an official announcement. <\/p>\n

Ah, but that crazy-bastard Bernanke always tosses a good screwball. Happy holidays market watchers! <\/p>\n

With a quick announcement the head of the Fed, in what could be one of his last actions as chairman, gave a concrete cutback on stimulus spending. Going forward (starting in January), the Fed will purchase $75 billion in bonds per month, instead of the previous $85 billion. (Specifically, the Fed will purchase $5 billion less per month of both mortgage backed securities and treasuries.) <\/p>\n

I guess old Ben was sick of hearing the catchy phrase from the talking heads ‘over a trillion dollars of stimulus per year’. <\/p>\n

At any rate, after yesterday’s announcement we’ve backed off of that 13-digit per year print fest. Come January we’re back down to a comfortable 12-digit per year print fest (that’s a ’9′ followed by 11 ’0′s.) <\/p>\n

The markets rejoiced. After the 2pm announcement stocks <\/strong>represented by the Dow Jones were up a combined 292 points (1.84%). Oil and many commodities<\/a> followed suit. The way the number-crunchers saw it, less stimulus meant the market was indeed strengthening. A stronger market means higher stocks<\/a>, more burnt crude, more iPads, more grilled tacos, and so forth. <\/p>\n

But there was a dunce in the corner… <\/p>\n

After the Fed announcement, gold traders headed for the exits. Not in a big way, but in orderly fashion – this is a civilized crew, mind you. However, it’s all hands on deck – we’ll want to keep tallying up daily moves in gold<\/strong>. We’re continuing to see where the market likes to buy and sell – and over time, as it always happens, we’ll get a read on the metal’s next mid-term direction. <\/p>\n

That said, my outlook remains unchanged at the moment. Gold remains under pressure and needs to find a level of support before re-establishing an uptrend. So far we can’t seem to hold support at $1,250. However, looking at a 30-day chart, as well as the 6-month chart, there seems modest support at $1,200. Will it hold? We’ll see! One thing that’s certain, though, is that this marks the next important line in the sand for gold<\/a>. Stay tuned to price action. <\/p>\n

But let’s connect some more dots. <\/p>\n

The Fed announces the infamous taper and gold stays somewhat range-bound. As of typing this note the metal hasn’t plummeted through $1,200; that’s a telling sign in itself. Especially if you’re a long-term holder of the Midas metal. <\/p>\n

I still like long-term gold. If anything the Fed’s taper announcement gave us a look behind the curtain. We moved from a little over a trillion per year in stimulus to a little under a trillion per year in stimulus. Indeed, you don’t quit this kind of monetary meth cold-turkey. <\/p>\n

That said, we’ve entered the next stage of the monetary shell game. How much<\/em> will the next taper amount be? When<\/em> will the next taper announcement be? What<\/em> about interest rates? <\/p>\n

There’s a lot of guesswork ahead in 2014. <\/p>\n

But one thing is for sure. Stimulus is going to be with us for a while – and that means inflation can’t be far behind. Truly, the US government – particularly the Fed – can only print so much money and sell so many low-interest homes before we’ve all go to pay the monetary piper. <\/p>\n

Will that inflation hit in 2014 or in 2024? Your guess is as good as mine. <\/p>\n

But rest assured that the Midas metal – for ‘buy and hold’ investors – will remain a store for wealth for years to come. When we see an opportunity to ‘buy the dips’ or play the downside from a trading standpoint, we’ll keep you posted. <\/p>\n

In the meantime let’s give a hearty hurrah for Ben Bernanke. He finally pulled back the curtain – and the casino looks about the same on the inside. <\/p>\n

Keep your boots muddy, <\/p>\n

Matt Insley
\n Contributing Editor, Money Morning<\/strong><\/p>\n

Ed Note: <\/strong>Stock Fly, Oil Rallies, Gold Flounders<\/a> originally appeared in Daily Resource Hunter<\/em><\/a>, USA.<\/p>\n<\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au This just in! Instead of printing over a trillion dollars in stimulus per year, the Federal Reserve announced on Thursday that it will print only $900 billion. Whew. We dodged a bullet there. For a while I thought the stimulus printing was getting out of hand, but now with this ‘huge’ cutback, looks … <\/p>\n

Continue reading “Stocks Fly, Oil Rallies, Gold Flounders”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-45673","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/45673","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=45673"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/45673\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=45673"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=45673"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=45673"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}