The Midas metal is poised to do well, as central banks and sovereign nations open up the monetary spigots to full. The classic Seinfeld moment above came to mind.
As you can see on my daily candlestick chart below, gold has roared back from a test of the positive influence of its longer-term moving average line. Recent forced selling was met by demand. That is shown by the long and strong red candle lines.
Chart by Steven Sarnoff, h/t stockcharts.com
Neel Kashkari, Minneapolis Fed head, whose name reminds me of “cash and carry” futures trades, who gained fame/infamy for his role in the bailout from the 2007-2009 financial crisis, said the quiet part out loud near the conclusion of his segment on 60 Minutes this past Sunday.
Scott Pelley: To the person who is about to grab their car keys and go to the ATM and take out $3,000, you say what?
Neel Kashkari: You don’t need to. Your ATM is safe. Your banks are safe. There’s enough cash in the financial system. And there’s an infinite amount of cash at the Federal Reserve. We will do whatever we need to do to make sure that there’s enough cash in the banking system.
Volume can be a useful tool for traders. Trading volume tallies the number of shares (for equities) or contracts (for futures) traded on a given day.
Price is king, but volume can indicate the force behind a price move. This provides valuable information.
For example, on our daily candlestick chart of JPM below, note that over the past few weeks, volume (overlaid on the chart) on down days (black bars) has been greater than volume on rebounds (red bars).
Chart by Steven Sarnoff h/t stockcharts.com
Low volume on a rebound is not a good sign. It tells me the bounce is more of a short-covering rally and adds weight to the evidence in favor of a continuation lower.
As with all indicators, there is no certainty; there is only probability.
Russell Sage, circa 1870 h/t Hulton Archive/Getty Images
“He wears no crown upon his royal head, But many millions in his purse, instead;
He keeps no halls of state; but holds his court in dingy rooms where thrift and greed resort;
In iron chests his wondrous wealth he hoards; Banks are his parlors; brokers his lords,
Bonds, bills, and mortgages, his favorite books, Gold is his food, and coiners are his cooks; …”
— John G. Saxe, The Money-King, 1854
Saxe’s lengthy mid-nineteenth century poem is descriptive of the exalted financial state of the European banking families considered to be “Money-Kings.”
In 2019, many of the poem’s couplets ring familiar with today’s growing problem of income inequality.
It’s something to consider, when considering those running for office.
PS My father, Paul Sarnoff, authored a biography of Russell Sage, published in 1965, Russell Sage: The Money King. Sage banked the tycoons and helped shape the Industrial Revolution. He became one of the wealthiest people in US history.
Japanese Black Pine, Japanese Friendship Garden, San Diego, h/t niwa.org
“To me, the poor are like Bonsai trees. When you plant the best seed of the tallest tree in a six-inch deep flower pot, you get a perfect replica of the tallest tree, but it is only inches tall. There is nothing wrong with the seed you planted; only the soil-base you provided was inadequate.
Poor people are bonsai people. There is nothing wrong with their seeds. Only society never gave them a base to grow on.”
― Muhammad Yunus, Creating a World Without Poverty: Social Business and the Future of Capitalism
Nobel laureate Muhammad Yunus founded the Grameen Bank and pioneered the concepts of microcredit and microfinance to fight poverty. Yunus realized that people were not poor because they were stupid or lazy. They worked long, hard hours, performing complex, physical tasks. Their growth was stunted, because their financial institutions did not help them widen their economic base.
The poor had no control over capital. Grameen reversed conventional banking practice by removing the need for collateral and created a banking system based on accountability , mutual trust, creativity and participation. In his book, Banker to the Poor: Microlending and the Battle Against World Poverty, Yunus wrote,“…it is the ability to control capital that gives people the power to rise out of poverty.”
Eradicating poverty provides a path toward peace.
Bonsai is the ancient Asian art of cultivating trees in trays. The shallow confines of a small pot prevent the tree’s roots from spreading. Pruning techniques help bonsai mimic the shape and scale of naturally full size trees.
Actress Betty Field dances the Charleston during a poolside party scene from the 1949 movie The Great Gatsby (Bettman / Getty)
“The financial community is now secure in the knowledge that the most powerful banks in the country stand ready to prevent a recurrence of panic.”
— New York Times, 10/24/1929, h/t John Kenneth Galbraith’s The Great Crash of 1929