I dumped all my gold and silver positions Friday.
Not at the top, but still at stupid prices.
Laugh at me next week if I’m wrong, but I think this is the beginning of the end for the squeeze.
President Trump’s pick of Kevin Warsh as the new Fed Chairman adds a hawkish voice inside the Fed.
Warsh isn’t going to make Powell’s life easier. That appointment might explain why metals got hit Friday afternoon.
Friday’s PPI number came in hot and stocks sold off immediately.
By 11am, buyers stepped in and erased the damage.
But the number matters: we’re back at three percent and the Fed has less room to cut.
Software Stocks Can’t Catch a Bid
Not a single software stock has held gains after earnings. Microsoft (MSFT) is drifting lower. Oracle (ORCL) is drifting lower. Salesforce (CRM) just made a year low.
Hans has been warning about this for a while. The unknown unknowns around software are big. These names are showing up on my Fingerprint Scanner and they haven’t reversed yet. I sold Adobe (ADBE) earlier this year. Haven’t looked back.
Apple (AAPL) posted a huge earnings number and the stock held. That’s notable because it’s one of the few mega-caps that actually responded to good news. Most of these big prints should help lower the volatility temperature since we’ve knocked out more unknowns.
Weekend Risk: Avoided This Time
Frank keeps sending me links from Capitol Hill. We avoided a government shutdown early this week. That’s the good news.
The bad news: a weekend without some game from President Trump just wouldn’t be a weekend. As I write this, US warships could be headed to Iran. That’s why VIX can’t get into Zone 1, the calm range below 13 where volatility dies down.
The trend of higher lows in VIX should break Monday, unless the US decides to reorder the Middle East this weekend. Then all bets are off until Trump cooks up something else.
What to Watch:
- Inflation back to three percent, Fed has less room
- Warsh is hawkish, will pressure Powell
- I’m out of metals, think the squeeze is done
- Software is broken, earnings don’t matter
- VIX stays elevated until Trump calms down
To Your Trading Success,
AG