So let’s talk precious metals and bonds. Both clearly are markets which, given the unfolding train-wreck in equities, currently look ripe for the plucking. Unfortunately the Fed rate decision announcement scheduled for this Wednesday afternoon is throwing a rabid wrench wielding monkey into my operation.
Just look at this gold chart…. so juicy! As you know I have been following at this chart for a while now and under normal circumstances I would have jumped on it a day or two ago while it was scraping the NLSL near 1240.
Same situation over in silver, especially given that beautiful 100-day BB which continues to squeeze ever so tighter. If you’ve been coming here for a while then you probably know that both of these setups have my name written all over them.
And even the Yen is moving in the right direction as the USD has continued to plunge in recent days.
Here are the 30-year treasury bond futures, right at the spot where I would usually go short and flip for a long on breach of the neckline. Very tempting…
The main argument against all of these fine break out entry opportunities is the dangling Damocles sword in the form of a possible change in Fed policy on Wednesday. It’s not just whether or not they decide to hold at 2.25% this time but even more so the prospective long term outlook for 2019.
In general I have no issue taking lottery tickets at strategic inflection points, but after a number of very painful experiences in 2008 I have never again attempted to pre-anticipate the Fed when it came to their interest rate policies. And especially in turbulent times like these capital preservation remains my #1 priority, which means for now I must hold off, as painful as it may end up be watching them run off without me.