31 Jan

Trendline Obsession

Source: Michael Ballanger  (1/30/23) 

Michael Ballanger of GGM Advisory Inc. shares his thoughts on the S&P 500, the outlook of Gold and Silver, and specifically why he believes you should be interested in Norseman Silver Ltd. 

In the mid-1980s, I got to know the late and very much renowned Canadian technical analyst Ian McAvity whose relationship with my boss (Jim Biddell) was forged years earlier in the 1960s when Ian and Jim were amongst the top squash players in Canada. In fact, Ian was a member of the Canadian Champion Doubles Squash team, ranked number one in North America for a time.

He also played exhibition matches against Pakistani-born North American professional champion Sharif Khan while showcasing the sport for South Afrikaan audiences shortly after the fall of apartheid rule. Above all else, Ian was not only a brilliant technical analyst and a pioneer in the use of logarithmic analysis to define trends but also a great storyteller with a wicked sense of humor.

I recall the time Ian put on a seminar at the old Holiday Inn in London, Ontario, and at the end of the presentation during the Q and A period, an elderly bespectacled gentleman got up and began to complain rather vociferously about the advice he was receiving from his stockbroker.

After waiting and listening for several very long moments with the stockbrokers in the audience shifting nervously in their chairs, Ian waited for the man to finish and then return to his seat, at which point Ian said, “When you came into this world, you had nothing. When you leave this world, you take nothing with you. So don’t hate your broker . . .  he’s just doing God’s work.”

Between hysterical guffaws and indignant screams of outrage, it was the best comeback ever in the history of boring high finance, and the box of Kleenex I went through wiping the tears of laughter from my cheeks is now legend.

At which point Ian said, “When you came into this world, you had nothing. When you leave this world, you take nothing with you. So don’t hate your broker . . .  he’s just doing God’s work.”

Please refrain from asking me why Ian McAvity suddenly popped into my mind as I sat down to write this weekly missive, but in case you do, the answer lies in the chart shown above that details arguably the most-watched, most-debated and most beaten-to-death technical pattern that has ever existed in the over-analyzed world of stock trading. So, I was wondering how my late friend Ian McAvity would have assessed it . . .

As I have written about for months now, I turned bullish in late September in what can only be described as an “ad hoc” decision. It was totally impulsive, based purely on the massive number of newly-arrived bears, each podcasting their breathless forecasts of stock market Armageddon sure to arrive in October of last year. It was also based on the sentiment numbers and hedge fund positioning (both at bearish extremes) but what sealed the deal for me was when a central bank that had been boasting loudly about its intention to normalize its balance sheet with huge bond sales suddenly did an abrupt one-eighty-degree turn.

When the Bank of England announced their purchase of some US$5 billion worth of 10-year “gilts” in order to alleviate domestic U.K. pension fund “stress,” a psychosomatic alarm bell went off inside me after which I immediately fired off an email alert to subscribers with the opinion that the Bank of England’s “pivot” was the call to arms for all of us to put away the bear clothes and start thinking about a year-end rally, which we got in spades.

The actual low for the S&P was a few trading days later on October 13th, but it was a great call based upon gut feel and had nothing whatsoever to do with the fine science of technical analysis.

S&P 500

That brings me to the topic of the current technical set-up for the S&P 500, which has the entire world focused on what the Twitterverse calls the “MOAT” — as in “Mother of All Trendlines.” We have everyone from thirty-something single moms doing kitchen table financial planning to seasoned CNBC commentators all weighing in on their analysis of this widely-trumpeted “rising wedge” formation that is “most surely” going to resolve itself to the downside and while the Citigroup panic-euphoria gauge has improved from “GREED” to “NEUTRAL,” I suspect that the consensus positioning is still bearish and that, according to Bob Farrell’s trading rule number nine, means that since so many experts all carry the same opinion, odds dictate an equal but opposite outcome.

With the wit and wisdom of Ian McAvity as my compass, this is what I surmised might be the probable outcome: (from Email Alert 2023-08)

“What I see happening by mid-February is the likelihood that Sam Bankman-Fried operating from the back room of his parents’ multi-million-dollar apartment in NYC, devises an algorithm that sends the S&P straight north of the ascending wedge, triggering an avalanche of “BUY” order from legion after legion of algobot traders, into which SBF shorts the entire volume surge sending the S&P southward and in full “failed-breakout” status. His coaches will be Elizabeth Holmes and the ghost of Bernie Madoff to ensure proper execution with zero prisoners taken.”

At the end of the day, only the market itself has any idea where it is going to wind up so technical analysis is simply just another tool.

My point in that veiled attempt at dark humor is that if there is one thing that Ian McAvity preached in his weekly “Deliberations” newsletter, was that at the end of the day, only the market itself has any idea where it is going to wind up so technical analysis is simply just another tool (like a few of the self-inflated podcasters I watch) with which to make investment/trading decisions.

I urge all of you attempting to use the resolution of the MOAT to park the current MSM obsession in the closet and let the “Two-day Close Rule” take effect before committing capital to the next “no-brainer” trade…

This past week I counted news releases from every junior developer/explorer in my 2023 GGMA Portfolio list as the consensus for 2023 is now tilting in the direction of the return of the commodities bull led by gold and silver but dominated by silver. It was almost as if every junior CEO/President were sent the advanced screening of Rick Rule’s appearance on Adam Taggert’s Wealtheon podcast, where the most-erudite stock peddler in world history (Rule) delivers a compellingly-verbose rendering of the commodities version of “In Flanders Field” punctuated with a “to those with failing hands we throw the torch — hold it high” dissertation on silver and why Rick is going to join Neil Armstrong in taking “one small step for a man, but one giant leap for my net worth statement” (i.e., “da moon”)

Gold and Silver

Moonshots notwithstanding, silver has lagged behind gold and copper since late December, and while it can be argued that silver was the standout leader from late September to late December, gold and copper are simply playing “catchup.” I disagree. Traders live in the “now,” and until silver can get to a new recovery high for the advance above US$24.77 (basis March silver), the entire metals complex is going to be vulnerable to another bear raid that serves to deflate not only spirits but also the P&L’s of thousands of short-term option and futures punters that are reading and singing off the Rick Rule hymn sheet.

Since those are the very people that will be buying the junior miners, explorers, and developers (all of which I own), I do not wish to see gold and copper actually “catch up” to silver because chances are by the time that happens, the rally will be punctuated with terminal violence (and cries of anguish).

Norseman Silver

I mentioned Allied Copper Corp. (CPR:TSX.V; CPRRF:OTCQB) last week, and since it popped 46.4% this week, prompting dozens upon dozens of emails requesting more of these “penny dreadful” names, I offer this week another one but for a vastly different reason. The name is Norseman Silver Ltd. (NOC:TSX.V; NOCSF:OTCQB), whose principal project is located in South America.

In my career, there have always been areas of the world where the risk premium is elevated either due to the absence of the Rule of Law, infrastructure deficiencies, or domestic politics. In recent years, populist movements around the globe have shifted the winds of foreign investment in many different directions and in some cases, surprisingly hostile from the most unexpected of countries.

Mexico was once the favorite playground for Canadian miners as it was part of the NAFTA accord, so the free trade statutes were always there to protect the foreign investor. That has now changed with the news that Fortuna Silver has had its San Jose mine in southern Oaxaca shuttered due to environmental concerns. Civil unrest and local community protests have shut down countless operations in Peru recently, and for Peru, where over 40% of national taxes are generated by miners, that is a striking development.

I have a dear friend from the U.S. Midwest whose uncles are all worldly entrepreneurs whose contacts monitor foreign investment flows as a means of practicing the “Follow the Money” school of due diligence. He tells me that there are absolutely massive investment dollars being channeled into three South American countries in the fourth quarter of 2022 and again in January of 2023, with Paraguay and Ecuador the two lesser recipients. However, the primary focus of these enormous capital investments is the one country least likely in the past to enjoy such good fortune — Argentina.

The reality is that when governments erect roadblocks to exploration and development, vast regions that contain potential district-scale mining camps fall into the category of “underexplored” and, therefore, by default, “underdeveloped,” and therein lies the opportunity.

When I think of Argentina, all I can recall is that it has a massive inflation problem (94% in 2022) and that it has tended historically to be decidedly anti-mining and anti-foreign in its treatment of investors.

As an example, in 2009, Pan American Silver Corp. (PAAS:TSX; PAAS:NASDAQ) bought the Navidad Silver deposit through the acquisition of Aquiline for US$630 million, only to discover that the province of Chubut disallowed the use of cyanide in mining operations thus preventing commercial exploitation of one of the world’s largest and richest undeveloped silver deposits.

However, recent legislation began to move in the opposite direction, as “limited development” is now possible in 2023. The reality is that when governments erect roadblocks to exploration and development, vast regions that contain potential district-scale mining camps fall into the category of “underexplored” and, therefore, by default, “underdeveloped,” and therein lies the opportunity.

The Navidad silver deposit was discovered in a geological setting in Patagonia known as the “Gastre Fault” structural corridor, which also contains the Calcatreu Gold Mine. It is a vast region largely untapped, but if a foreign entity can enlist the right person or group to navigate the permitting waters successfully, they will have earned the “first mover advantage,” and that is exactly what Norseman silver has accomplished with their acquisition of the Taquetren Project, a land package of some 145,000 acres located in the Navidad-Calcatreu Mining District.

Gold Ridge

Of even greater importance is that the prospector-geologist and Argentinian national that discovered Navidad, Daniel Bussandri, is now Norseman’s country manager and is completely in charge of all operations, including exploration and permitting, for Taquetren. To have a local with a proven track record as a mine-finder at the helm is an asset that is hard to assess, but the one thing I know for sure is that the risk premium that one would normally assign has now been mitigated by the presence of Daniel Bussandri.

Press releases in 2022 have revealed mineralized outcrops of major copper-silver credits and some minor gold occurrences, but that last one from January 23rd was a game-changer.

Buy Norseman Silver.

It detailed the discovery of a 2 km long, 0.5 km wide mineralized vein structure where sub-crops yielded values as high as 12.2 g/t Au with this “Gold Ridge” zone lying within a larger 5 km long corridor hosting the Martha, Neta Nueva, Irma, and Veta Juan targets.

I have learned that the most recent sampling results at Gold Ridge are attracting the eyes and interest of more than a few of the consulting geologists, including 82-year-old crusty veteran geo Ron McMillan, who carries the reputation of being “unexcitable” about anything to do with early-stage exploration. Well, apparently, Mr. McMillan is “noticeably excited” about Gold Ridge, and given that it is located 20 km NW of Calcatreu and in the same mining district, I deem that as significant.

Norseman is completing a fast CA$750k funding in order to pay for the geophysical survey ordered last week, so with the existing CA$600,000 working capital position, the company is fully-funded to commence drilling once targets have been identified and permits received.

In sum, we have what might be a new gold discovery in a known gold-bearing region located in a largely-underexplored part of the world where for the first time in recent memory, large investment flows are suddenly and impressively showing up. We have a country manager with a proven track record and voluminous local relationships in order to facilitate the needs of the local politicians as he tries to capture the Navidad lightning in the junior exploration bottle once again. Remember, Navidad was sold for US$630 million.

At a CA$6.3m market cap, Norseman Silver Inc. appears ready to assume a dominant role in the Patagonia region as a first-mover with strong management at all levels and with a large land package in a mine-bearing region.

Buy Norseman Silver.

Michael Ballanger Disclaimer:

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

Disclosures:

1) Michael J. Ballanger: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: All. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: My company, Bonaventure Explorations Ltd., has a consulting relationship with: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Allied Copper Corp. and  Norseman Silver Ltd., companies mentioned in this article.

Metals Opinions
31 Jan

Here’s a Strong Indication That the Bear Market Has Legs

This is what investors look for at or near a stock market low

By Elliott Wave International

Elliott Wave International’s analysts have been observing financial markets for decades. They monitor dozens of stock market indicators, in addition to Elliott wave patterns.

No single indicator can tell the whole story of what’s going on with the market, but sometimes, a single observation can carry a lot of weight.

One current observation is that many investors are still looking for reasons to be bullish, even though stocks have been in a downtrend for more than a year. In other words, they think the bear market is over.

For example, the view of a prominent market researcher is unequivocal, according to this Jan. 11 headline (Bloomberg):

Bull Market Is Back as Recession Worries Fade, [Market Research Firm Founder] Says

In Elliott Wave International’s view, if recession concerns are dwindling, that’s a reason to be on the lookout for a recession — or, something worse.

But, setting aside whether a recession is pending or not, the point is the latching on to reasons why the bull market is back.

This Jan. 11 headline captures the view of a vice-chairman of a financial firm (CNBC):

The market is telling you that the economy’s not going to be as bad as expected: Financial services firm

Of course, this is close to the same message as the first headline.

Other headlines mention lower inflation as a reason for rising stock prices.

But, let’s get back to Elliott Wave International’s observations over the years. The Jan. 11 U.S. Short Term Update, a thrice weekly Elliott Wave International publication which provides near-term forecasts for major U.S. financial markets, noted:

Investors are still searching for rationalizations to buy, which is a strong sign that [the] bear market has yet to run its course. People do not look for reasons to buy at or near a low, they look for rationalizations to sell.

Consider the last major bear market from 2007 to 2009. On Feb. 23, 2009, the “reason” stated for the continuation of the then bear market was “uncertainty about the latest potential U.S. government action to shore up beleaguered banks.” As a headline said (Reuters):

Dow tumbles to 11-year low on fear about banks

Fears about a big drop in business in the technology sector was also mentioned as a catalyst for plummeting stock prices.

Well, 10 days after that headline published, the stock market bottomed.

Observations about investor rationalizations is just one sign that the bear market may not be over. There are others, including the Elliott wave patterns of the major U.S. stock indexes.

If you’re unfamiliar with Elliott wave analysis, or simply need a refresher, read Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

In markets, progress ultimately takes the form of five waves of a specific structure. Three of these waves, which are labeled 1, 3 and 5, actually effect the directional movement. They are separated by two countertrend interruptions, which are labeled 2 and 4. The two interruptions are apparently a requisite for overall directional movement to occur.

[R.N.] Elliott noted three consistent aspects of the five-wave form. They are: Wave 2 never moves beyond the start of wave 1; wave 3 is never the shortest wave; wave 4 never enters the price territory of wave 1.

If you’d like to learn more (or continue with your refresher if you’re already acquainted with the Wave Principle), here’s some good news: You can access the entire online version of the book for free once you become a member of Club EWI, the world’s largest Elliott wave educational community.

Club EWI is free to join, and members are under no obligations. At the same time, members enjoy complimentary access to a wealth of Elliott wave resources on financial markets and investing.

Get the ball rolling toward a Club EWI membership by following this link: Elliott Wave Principle: Key to Market Behavior — get free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Here’s a Strong Indication That the Bear Market Has Legs. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Financial News Stock Market News
31 Jan

Packed week of risk events to inject life into markets

By ForexTime

The next few days promise to be wild and incredibly eventful for financial markets thanks to a string of central bank decisions, earnings from tech titans, and key economic data releases.

There was already a strong sense of tension in the air as investors digested a barrage of corporate earnings and key reports ahead of the Federal Reserve, Bank of England, and European Central Bank meetings. This unease and overall caution have sapped appetite for risk, sending European shares lower this morning. Given how investors are likely to remain guarded towards riskier assets, US stocks may trade lower later today. In the currency space, the dollar hit its highest level in a week amid the risk-off sentiment while gold slipped bear to $1900 thanks to a stabilising dollar. Oil benchmarks were also under pressure due to the prospect of more rate hikes.

It is safe to say that the events of this week could set the tone for the new trading month of February. Given how markets are expecting the FOMC, BoE, and ECB to make a move, the focus is likely to be on what they say rather than the actions they take. On the earnings front, Apple, Alphabet, and Meta Platforms will be under the spotlight this week with all eyes on their results and growth outlook, especially after the mass layoffs recently announced in US-based tech companies.

What to expect from the Fed?

The Fed is widely expected to raise interest rates by 25 basis points when its meeting ends on Wednesday.

Given how the Fed is widely expected to make such a move, much focus will be directed toward the statement and Fed Chair Powell’s press conference. Powell is expected to strike a hawkish tone which is in contrast to market expectations over the Fed cutting rates near the end of 2023. This means the disconnect between the Fed and markets may add more spice to the pending meeting, as investors seek fresh clues on what to expect from the central bank this year. Dollar bulls could receive further support if Fed hawks dominate the scene. However, if markets fail to buy the hawkish rhetoric and signal for continued rate hikes, this could drag the dollar lower.

ECB Hawks to reign supreme?

Given how inflation remains at uncomfortable levels in Europe, ECB hawks are set to take the lead on Thursday. Markets widely expect the ECB to hike interest rates by 50 basis points with a firmly hawkish Largarde reinforcing expectations for further rate hikes down the road. Before the policy meeting, investors will be presented with the latest January flash inflation figures. If inflation remains at lofty levels, this may fortify expectations around the ECB hiking rates for longer to tame price pressures.

Looking at the technical picture, EURUSD remains under pressure on the daily charts with resistance found around 1.0900. A stronger dollar seems to be fueling the downside with the next level of interest around 1.0770. A potential breakout opportunity could be on the horizon for the currency pair with the outcome of both the Fed and the ECB meetings influencing the near-term outlook.

Currency spotlight: GBPUSD

A hawkish Bank of England could inject sterling bulls with renewed confidence this week. The BoE is expected to raise interest rates by 50 basis points in the face of high inflation. Although the annual rate fell to 10.5% in December, it is still more than five times the bank’s 2% target. Given how a rate rise is widely expected, all eyes will be on the updated growth and inflation forecasts which could offer fresh clues on the pace of policy tightening. Whatever the outcome of the BoE meeting, it could translate to increased pound volatility.

Talking technicals, GBPUSD remains under pressure on the daily charts with prices approaching the 1.2300 level. A breakdown below this point could encourage a decline toward 1.2170 and 1.2120, respectively.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Economics & Fundamentals Financial News
31 Jan

Japanese Candlesticks Analysis 31.01.2023 (USDCAD, AUDUSD, USDCHF)

By JustMarkets

USDCAD, “US Dollar vs Canadian Dollar”

On H4, the pair has formed a Hammer reversal pattern. Currently, the pair is going by the signal in an ascending wave. The goal of the correction will be 1.3465; later the pair may bounce off it and continue the decline. However, the price may drop to 1.3310 without pulling back to the resistance level.

USDCAD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD, “Australian Dollar vs US Dollar”

On H4, the currency pair has formed a Hanging Man reversal pattern. Currently, the instrument is going by the signal in a descending wave. The goal of the pullback might be 0.6975. Upon testing the support level, the quotes may bounce off it and continue growing. However, the price may grow to 0.7100 and continue the uptrend without testing the support level.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCHF, “US Dollar vs Swiss Franc”

On H4, at the support level the pair has formed a Dodji reversal pattern. Currently, the pair is going by the signal in an ascending wave. The goal of the pullback might be 0.9295. Upon testing the resistance level, the pair may bounce off it and continue the downtrend. However, the quotes may fall to 0.9195 without correcting to the resistance level.

USDCHF

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Financial News Forex and Currency News
31 Jan

Investors are cautious ahead of key central bank meetings

By JustMarkets

The new week started with a more cautious mood in the markets. Stock indices closed lower on Monday as investors refused to buy stocks ahead of the Federal Reserve’s decision and further quarterly earnings. At Monday’s close, the Dow Jones Index (US30) decreased by 0.77%, and the S&P 500 Index (US500) lost 1.30%. The NASDAQ Technology Index (US100) fell by 1.96% yesterday.

According to analysts, the 25 basis point increase has already been accounted for by the market. The Federal Reserve is looking to slow its campaign against inflation but will signal further tightening. Officials note that unjustified easing will make it harder for them to restore price stability. Economists believe rising mortgage rates are cooling the housing market, and higher lending rates could make corporate investments more expensive. A stronger dollar hurts manufacturing by making exports more expensive and imports cheaper. And lower stock and bond prices can help curb consumer spending.

Stock markets in Europe mostly fell yesterday. Germany’s DAX (DE30) decreased by 0.16%, France’s CAC 40 (FR40) lost 0.21%, Spain’s IBEX 35 (ES35) fell by 0.12%, and the British FTSE 100 (UK100) closed up by 0.25% on Monday.

Unexpected data were published yesterday in Spain and Germany. Spain’s harmonized consumer price index rose from 5.7% to 5.8% year-over-year, with a forecast of 4.9%. A rebound in fuel prices drove the result. The core inflation rate rose to a record 7.5% year-over-year, reinforcing fears of tighter price pressures. In Germany, fears of a recession returned. Preliminary GDP data showed that the economy shrank by 0.2% quarterly after rising by 0.5% in the third quarter. Annual GDP growth for 2022 was also revised downward to 1.8% from 1.9% year-over-year.

The flurry of recent data showing that Europe’s economy is starting to grow again has even raised hopes that the Eurozone will avoid a sharp recession. But ECB President Christine Lagarde has repeatedly stressed that rates will continue to rise at a steady pace, and the ECB is expected to raise rates by 50 basis points on Thursday. Most analysts also expect a 50 basis point hike in March, but as inflation begins to decline and GDP in key eurozone economies shrink, there are already signs of a debate among policymakers that the pace should slow down. The focus will be on Lagarde’s comments after the rate decision is announced to hint at the future direction.

In Switzerland, the KOF economic barometer rose for the second month in a row. Nevertheless, the indicator remains below its medium-term value. But the outlook for the Swiss economy at the start of the year is much less bleak than it was last fall. The sectors that are recovering the fastest are manufacturing, hospitality, and services.

Oil fell by 2% yesterday. It became known that Moscow would not adhere to the Russian oil price cap set by the West. The administration of President Vladimir Putin is allowing Russian oil companies to sell as many barrels of oil as they want at whatever price they can get. There is a huge discrepancy between the Russian government’s policy and actual activity in the physical oil market. Russia is trying to negotiate with OPEC+ countries to maintain price stability and to maintain higher oil prices. Much will depend on whether OPEC+ leaves production levels at current levels.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 0.19%, China’s FTSE China A50 (CHA50) added 0.76% after the holiday, Hong Kong’s Hang Seng (HK50) fell by 2.73%, India’s NIFTY 50 (IND50) gained 0.25%, and Australia’s S&P/ASX 200 (AU200) ended the day 0.16% negative.

Kuroda’s ten-year tenure at the helm of Japan’s central bank comes to an end in April. Prime Minister. Kishida indicated last week that he would choose a new governor in February. Most Bank of Japan observers surveyed by Bloomberg see current deputy governor Masayoshi Amamiya or his predecessor Hiroshi Nakaso as the most likely successors. In the latest Bloomberg poll of Bank of Japan observers, Amamiya was the favorite to replace Kuroda, with 25 votes out of 37 responses.

China’s business activity index rose for the first time in four months as the economic recovery from Covid Zero continues and the Lunar New Year holiday boosted travel and spending. The pace of activity recovery remains in focus, and one positive sign is that more than 300 million trips were made during the Lunar New Year, nearly 90% of pre-pandemic levels.

S&P 500 (F) (US500) 4,017.77 −52.79 (−1.30%)

Dow Jones (US30) 33,717.09 −260.99 (−0.77%)

DAX (DE40) 15,126.08 −23.95 (−0.16%)

FTSE 100 (UK100) 7,784.87 +19.72 (+0.25%)

USD Index 102.23 +0.30 (+0.30%)

Important events for today:
  • – Japan Unemployment Rate (m/m) at 01:30 (GMT+2);
  • – Japan Retail Sales at 01:50 (GMT+2);
  • – Japan Industrial Production (m/m) at 01:50 (GMT+2);
  • – Australia Retail Sales (m/m) at 02:30 (GMT+2);
  • – China Manufacturing PMI (m/m) at 03:30 (GMT+2);
  • – China Non-Manufacturing PMI (m/m) at 03:30 (GMT+2);
  • – French GDP (q/q) at 08:30 (GMT+2);
  • – German Retail Sales (m/m) at 09:00 (GMT+2);
  • – French Consumer Price Index (m/m) at 09:45 (GMT+2);
  • – German Unemployment Rate (m/m) at 10:55 (GMT+2);
  • – Eurozone GDP (q/q) at 12:00 (GMT+2);
  • – German Consumer Price Index (m/m) at 15:00 (GMT+2);
  • – Canada GDP (q/q) at 15:30 (GMT+2);
  • – US Chicago PMI (m/m) at 16:45 (GMT+2);
  • – US CB Consumer Confidence (m/m) at 17:00 (GMT+2);
  • – New Zealand Unemployment Rate (q/q) at 23:45 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
31 Jan

US debt default could trigger dollar’s collapse – and severely erode America’s political and economic might

By Michael Humphries, Touro University 

It’s a case of déjà vu all over again on the debt ceiling debate.

Republicans, who regained control of the House of Representatives in November 2022, are threatening to not allow an increase in the debt limit unless they get unspecified spending cuts in return. In so doing, they risk pushing the U.S. government into default.

Brinkmanship over the debt ceiling has become a regular ritual – it happened under the Clinton administration in 1995, then again with Barack Obama as president in 2011, and more recently in 2021.

As an economist, I know that defaulting on the national debt would have real-life consequences. Even the threat of pushing the U.S. into default has an economic impact. In August 2021, the mere prospect of a potential default led to an unprecedented downgrade of the the nation’s credit rating, hurting America’s financial prestige as well as countless individuals, including retirees.

And that was caused by the mere specter of default. An actual default would be far more damaging.

Dollar’s collapse

Possibly the most serious consequence would be the collapse of the U.S. dollar and its replacement as global trade’s “unit of account.” That essentially means that it is widely used in global finance and trade.

Day to day, most Americans are likely unaware of the economic and political power that goes with being the world’s unit of account. Currently, more than half of world trade – from oil and gold to cars and smartphones – is in U.S. dollars, with the euro accounting for around 30% and all other currencies making up the balance.

As a result of this dominance, the U.S. is the only country on the planet that can pay its foreign debt in its own currency. This gives both the U.S. government and American companies tremendous leeway in international trade and finance.

No matter how much debt the U.S. government owes foreign investors, it can simply print the money needed to pay them back – although for economic reasons, it may not be wise to do so. Other countries must buy either the dollar or the euro to pay their foreign debt. And the only way for them to do so is to either to export more than they import or borrow more dollars or euros on the international market.

The U.S. is free from such constraints and can run up large trade deficits – that is, import more than it exports – for decades without the same consequences.

For American companies, the dominance of the dollar means they aren’t as subject to the exchange rate risk as are their foreign competitors. Exchange rate risk refers to how changes in the relative value of currencies may affect a company’s profitability.

Since international trade is generally denominated in dollars, U.S. businesses can buy and sell in their own currency, something their foreign competitors cannot do as easily. As simple as this sounds, it gives American companies a tremendous competitive advantage.

If Republicans push the U.S. into default, the dollar would likely lose its position as the international unit of account, forcing the government and companies to pay their international bills in another currency.

Loss of political power too

Since most foreign trade is denominated in the dollar, trade must go through an American bank at some point. This is one important way dollar dominance gives the U.S. tremendous political power, especially to punish economic rivals and unfriendly governments.

For example, when former President Donald Trump imposed economic sanctions on Iran, he denied the country access to American banks and to the dollar. He also imposed secondary sanctions, which means that non-American companies trading with Iran were also sanctioned. Given a choice of access to the dollar or trading with Iran, most of the world economies chose access to the dollar and complied with the sanctions. As a result, Iran entered a deep recession, and its currency plummeted about 30%.

President Joe Biden did something similar against Russia in response to its invasion of Ukraine. Limiting Russia’s access to the dollar has helped push the country into a recession that’s bordering on a depression.

No other country today could unilaterally impose this level of economic pain on another country. And all an American president currently needs is a pen.

Rivals rewarded

Another consequence of the dollar’s collapse would be enhancing the position of the U.S.‘s top rival for global influence: China.

While the euro would likely replace the dollar as the world’s primary unit of account, the Chinese yuan would move into second place.

If the yuan were to become an a significant international unit of account, this would enhance China’s international position both economically and politically. As it is, China has been working with the other BRIC countries – Brazil, Russia and India – to accept the yuan as a unit of account. With the other three already resentful of U.S. economic and political dominance, a U.S. default would support that effort.

They may not be alone: Recently, Saudi Arabia suggested it was open to trading some of its oil in currencies other than the dollar – something that would change long-standing policy.

Severe consequences

Beyond the impact on the dollar and the economic and political clout of the U.S., a default would be profoundly felt in many other ways and by countless people.

In the U.S., tens of millions of Americans and thousands of companies that depend on government support could suffer, and the economy would most likely sink into recession – or worse, given the U.S. is already expected to soon suffer a downturn. In addition, retirees could see the worth of their pensions dwindle.

The truth is, we really don’t know what will happen or how bad it will get. The scale of the damage caused by a U.S. default is hard to calculate in advance because it has never happened before.

But there’s one thing we can be certain of. If Republicans take their threat of default too far, the U.S. and Americans will suffer tremendously.The Conversation

About the Author:

Michael Humphries, Deputy Chair of Business Administration, Touro University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Forex and Currency News Opinions
30 Jan

82% of millionaires seek advice on crypto as Bitcoin soars

By George Prior

Eight out of 10 high net worth (HNW) individuals have asked their financial advisers about including cryptocurrencies, such as Bitcoin, into their portfolios over the last 12 months – despite the market experiencing a difficult year in 2022.

According to the results of a study by deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, 82% of clients with between £1m and £5m of investable assets sought advice on cryptocurrencies.

Nigel Green, the CEO and founder of deVere Group, notes: “In 2022, the crypto market delivered its worst performance since 2018, with Bitcoin, the headline-grabbing market leader, falling about 75% during the year.

“The price drops came as investors reduced their exposure to risk-on assets, including stocks and crypto, due to heightened concerns about inflation and slower economic growth.

“Yet against this backdrop of the so-called ‘crypto winter’, HNWs were consistently seeking advice from their financial advisers about including digital currencies into their portfolios.”

He continues: “Interestingly, this typically more conservative group were not deterred by the bear market and adverse market conditions.  Instead, they were looking to either start including or increasing their exposure to crypto.

“This suggests that these high-net-worth clients are increasingly aware of the inherent characteristics of cryptocurrencies like Bitcoin which has the core values of being digital, global, borderless, decentralized and tamper-proof.

“Wealthy investors understand that digital currencies are the future of money, and they don’t want to be left in the past.”

Many of these HNWs who were polled will also have seen a consistent surge in interest being expressed by institutional investors, including Wall Street giants, who bring further capital, influence and confidence to the sector.

In recent months, JPMorgan, like many other major legacy financial institutions, including Fidelity, BlackRock and New York Bank Mellon, have also begun to offer crypto-related services to their clients.

The deVere CEO believes that this momentum of interest is set to build further as the ‘crypto winter’ of 2022 is thawing.

“Bitcoin is on track for its best January since 2013 based on hopes that inflation has peaked, monetary policies become more favourable, and the various crypto-sector crises including high-profile bankruptcies are now in the rear-view mirror,” he says.
“The world’s largest cryptocurrency is up over 40% since the turn of the year and this will not go unnoticed by HNW clients and others who want to build wealth for the future.”

Nigel Green concludes: “If HNWs were expressing such huge interest in the 2022 bear market, as market conditions steadily improve, they’re going to be amongst the first to capitalise in the forthcoming bull run.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Economics & Fundamentals Financial News
30 Jan

Trade of the Week: GBPUSD ready to rock

By ForexTime

In recent sessions, GBPUSD has been relatively quiet, trading just below a key resistance level.

But such relative calm could be pierced this week as markets pit the policy signals out of two major central banks against each other:

the US Federal Reserve (a.k.a. the Fed) vs. the Bank of England (BOE).

First, a quick refresher on how FX markets tend to react to central bank policy moves.

Generally, the central bank that can keep raising its interest rates further while its economy can withstand those higher rates (relative to another central bank’s benchmark rates/economy) typically sees its currency strengthen.

READ MORE: (September 2022) Why FX markets react to central banks

 

And on that premise, GBPUSD has climbed by more than 2.5% so far this year.

The price consolidation seen in the above chart also suggests this FX pair’s next move may be a big one, depending on how the Fed and the BOE act over the coming days.

According to Bloomberg’s FX forecast model, there’s a 72% chance that GBPUSD trades within the 1.2182 – 1.2614 range this week.

Whether this FX pair (nicknamed “cable) goes up or down is likely to depend on which central bank can convince markets that it’s got more rate hikes in store for 2023.

What are markets expecting the Fed and the BOE to do?

Overall, the BOE is expected to hike by a larger amount compared to the Fed:

  • This week: BOE to hike by 50bps vs. the Fed’s forecasted 25bps hike
  • This year: BOE expected to hike by 100bps in total (including this week’s expected hikes), compared to the Fed’s forecasted remaining hikes of 50bps

 

Depending on how much either central bank deviates from the above-listed scenario, that may well determine the size of GBPUSD’s move this week.

Overall, if the BOE confirms this week that it can officially out-hike the Fed, not just this week but also over the coming months, that could trigger the next leg up for GBPUSD.

 

However, we could be in for a SURPRISE this week, if the:

  • BOE hints that it’s almost done with its own rate hikes, for fear of incurring too much damage to the UK economy.
  • Fed reiterates its intentions to keep sending US interest rates higher than the 5% peak that markets are forecasting.

    After all, Fed Chair Jerome Powell has often said he wants today’s Fed to avoid the mistakes from the 1970s, when the then-Fed eased up on its rate hikes too soon.

The above scenario (dovish BOE + still-hawkish Fed) may then trigger GBPUSD into unwinding some of its recent gains.

 

Key levels for GBPUSD:

RESISTANCE

  • 1.24511: this marks the 61.8% Fibonacci retracement level from GBPUSD’s 2022 peak-to-trough action.

    Although Pound bulls were fought back at this level in mid-December, they are biding their time once more and consolidating just below this key technical level, awaiting hawkish cues from the BOE to help GBPUSD breach this initial resistance level.

  • 1.265: this area resisted GBPUSD upside at both ends of May 2022, and may do so again in the near future.

 

SUPPORT

  • Upper 1.22 region: cycle highs from early August 2022
  • 1.218: around where GBPUSD’s 50-daysimple moving average (SMA) currently lies.

 

At the time of writing, from current levels just below 1.24, Bloomberg’s FX model is pointing to a slightly likelier chance that GBPUSD would dip below 1.22 (16.5% chance) rather than breach the 1.26 mark (15% chance).

Amid rising expectations for heightened immediate volatility for GBPUSD, it’s increasingly evident that FX markets are on tenterhooks, eager to react to the latest clues out of the Fed and the BOE this week.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions
30 Jan

Green Tech Co., Feed Co. Team Up for Sustainable Beef

Source: Streetwise Reports  (1/25/23)

Bion Environmental Technologies Inc. is creating a “mutually beneficial strategic relationship” with another company looking to improve the cattle industry.

Bion Environmental Technologies Inc. (BNET:OTCQB) has signed a letter of intent to create a “mutually beneficial strategic relationship” with another company looking to improve the cattle industry.

Bion’s Gen3Tech technology transforms cattle waste into renewable natural gas, fertilizer, and clean water. BetterFedFoods LLC has developed a technology that uses algae to supplement cattle feed with Omega 3 EPA long-chain fatty acids.

Source: Stockwatch

Newsletter writer Clive Maund of CliveMaund.com said looking at Bion’s 20-year chart, he sees a “steady advance by the accumulation line over a long period.”

This “strongly suggests a positive resolution to the pattern — i.e., a major new bull market with a breakout from the entire base pattern being signified by the price advancing through the US$2.00 level,” he wrote on Jan. 16.

Maund rated the stock an immediate Buy, saying it “is considered to be a solid long-term investment.”

BetterFedFoods has made a “significant equity investment” in Bion, Bion said. The two companies will work over the next two to three months to determine how to leverage their individual strengths in the partnership.

The Catalyst: More Demand for Sustainable Beef

BetterFedFoods’ values fit Bion’s values, said Bion Chief Executive Officer Bill O’Neill.

“BetterFedFoods’ commitment to creating healthier feed, animals, and people is a perfect fit with our own vision,” he said. “Today’s consumers increasingly want products that are sustainable, transparent, and ‘better for you.’ Working with BetterFedFoods will help Bion and its partners check those consumer boxes.”

Over the last decade, BetterFedFoods has been incorporating algae in livestock feeding systems, improving their overall health and providing a higher feed-to-weight gain ratio, creating better marbling of the meat and reducing methane emissions from the animals.

Omega 3 also reduces joint inflammation, increases stress tolerance, improving respiratory issues, and reducing heart disease for animals — just like it does for humans.

“Aligning our goals (with Bion’s) makes perfect sense,” said Todd Hansen, BetterFedFoods’ chief executive officer.

A Sustainable System

The livestock industry creates more than 1.5 billion tons of manure annually, contributing to climate change and the excess nutrient contamination of surface waters and groundwater aquifers.

Bion’s platform transforms that pollution into revenue-producing renewable natural gas, fertilizer, and clean water. It both prevents pollution and recovers lost value simultaneously, and consumers get grain-fed and independently verified sustainable meat with a pedigree they can trace back to the source.

Company officials said meat produced through its system creates a truly sustainable product that also goes a long way toward eliminating the environmental impacts of meat production.

According to the U.S. Environmental Protection Agency, livestock manure nutrients “have real value as a fertilizer” for farmers, gardeners, and landscapers. However, untreated manure from animal feeding operations can contaminate surface water with pathogens such as E. coli, hormones, antibiotics, and chemicals like nitrates, phosphorous, and ammonia, the Centers for Disease Control stated.

Untreated waste can contribute to greenhouse gases such as methane, cause algae blooms and dead zones in bodies of water, contaminate groundwater, and contribute to antibiotic resistance.

“The company is involved in the green technology space, which is a good area to be in with the climate change movement driving a lot of changes and developments,” Maund wrote.

The EPA is now saying it will look at strengthening regulations for large livestock farms. The agency didn’t commit to any changes but acknowledged needing more recent data.

Bion’s Gen3Tech uses a specially designed barn and separately housed treatment system to apply biological, thermal, and mechanical processes to animal waste, creating pipeline-quality natural gas, fertilizers, clean water, and clean air and water credits.

But the main product is blockchain-verified, USDA-certified, sustainable meat for the US$66 billion-a-year beef industry.

In a column last August, Maund said Bion is well-positioned.

“The company is involved in the green technology space, which is a good area to be in with the climate change movement driving a lot of changes and developments,” Maund wrote. “It certainly cannot be claimed that the company has not been preparing for the times that we now find ourselves in and the times ahead.”

Ownership and Share Structure

Streetwise Ownership Overview*

Bion Environmental Technologies Inc. (BNET:OTCQB)

Retail: 56%
Management/Insiders: 44%
56%
44%
*Share Structure as of 1/25/2023

 

About 44% of the company is held by management/insiders; the rest is retail.

The stock is covered by several newsletter writers, including Maund, Matt Badiali, and Chris Temple, editor of The National Investor. Click “See More Live Data” in the data box above to view more of what they are saying.

Bion has a market cap of US$79.14 million and 44,279,884 million shares outstanding, 21,841,554 million of them free-floating. It trades in a 52-week range of US$1.75 and US$0.505.

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Disclosures:

1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Bion Environmental Technologies Inc. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Bion Environmental Technologies Inc., a company mentioned in this article.

Financial News Stock Market News
30 Jan

Ichimoku Cloud Analysis 30.01.2023 (AUDUSD, GBPUSD, NZDUSD)

By RoboForex.com

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD is testing the signal lines of the indicator. The instrument is going above the Ichimoku Cloud, which suggests an uptrend. A test of the upper border of the Cloud at 0.7005 is expected, followed by growth to 0.7315. An additional signal confirming the growth will be a bounce off the lower border of the bullish channel. The scenario can be cancelled by a breakaway of the lower border of the Cloud and securing under 0.6930, which will mean further falling to 0.6840.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD is testing the resistance level. The instrument is going above the Ichimoku Cloud, which suggests an uptrend. A test of the upper border of the Cloud at 1.2350 is expected, followed by growth to 1.2685. An additional signal confirming the growth will be a bounce off the lower border of the ascending channel. The scenario can be cancelled by a breakaway of the lower border of the Cloud and securing under 1.2245, which will mean further falling to 1.2135.

GBPUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

NZDUSD, “New Zealand Dollar vs US Dollar”

The currency pair is squeezed inside the Triangle pattern. The instrument is going above the Ichimoku Cloud, which suggests an uptrend. A test of the upper border of the Cloud at 0.6470 is expected, followed by growth to 0.6665. An additional signal confirming the growth will be a bounce off the lower border of the Triangle pattern. The scenario can be cancelled by a breakaway of the lower border of the Cloud and securing under 0.6405, which will mean further falling to 0.6310. The growth can be confirmed by a breakaway of the upper border of the Triangle pattern and securing above 0.6550.

NZDUSD

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

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