Jackson Hole revives hawks and bears so equities turn lower. Bitcoin also suffers as risk appetites turn sour. The week ahead is set for more volatility as bond markets reprice and the curve flattens again. The week finally got its finale with a hawkish Jackson Hole on Friday culminating in a bad week of data on nearly all front bar perhaps inflation. Global PMIs turned south as economies look to be heading straight down the recession route. The PMI debacle spread like a virus with Australia spreading to the UK, Europe, and then the US. Europe started to reprice rate hikes as more and more ECB members came out all hawkish and now 75 basis points may be the tonic for the next ECB meeting. Despite this, the Euro was still unloved due to the energy situation in Europe. The price of European electricity and gas prices continued to soar on the back of the ongoing ramifications of the Russian invasion of Ukraine. This has put added pressure on inflation projections from the EU and so caused the hawkish tilt from ECB members. Sovereign bond yield spreads continued to widen in Europe between the core (Germany, France) and the periphery (Italy, Greece). Not yet at a critical level but it's worth keeping an eye on. This was the source of the near collapse of the Euro during the GFC. This time the ECB has pledged to intervene if the spread gets too wide so the market is likely to test it at some stage. Meanwhile, the Bank of Japan continues to hold rates down and so the yen remains pressured as the dollar/yen is still above 137. Asia it seems is embarking on monetary easing just as the rest of the developed world is tightening. China is increasingly looking to monetary and fiscal stimulus measures to deal with a growing property crisis that could blow up into another GFC event.  Meanwhile back to the week at hand and Powell's description of needing "below trend" growth. Ned Davis has some interesting research showing us that below-trend growth with inflation means underperformance for equities.

Review and Preview  Federal Reserve Chairman Jerome Powell delivered a stern commitment Friday to halting inflation, warning that he expects the central bank to continue raising interest rates in a way that will cause “some pain” to the U.S. economy. – Jeff Cox, “Powell Warns of ‘Some Pain’ Ahead as the Fed Fights to Bring Down Inflation,”  www.cnbc.com , August 26, 2022.  The Fed spoke and the markets broke. After forming a half-primary cycle crest the prior week as the Sun made a T-square with Saturn and Uranus, followed by the Venus/Jupiter trine, stocks sold off into the Uranus retrograde of Wednesday, August 24.They then staged a 2-day rally into Friday August 26, as Venus moved into its T-square with Saturn and Uranus (August 26-29). And then the Fed spoke. Uranus awoke. And then stock markets broke. By the end of the day (August 26), the DJIA closed down over 1000 points, and its lowest level this month. Just two weeks ago it was at its highest level since April. This is the volatility and sudden reversals to be expected from the unexpected nature of multiple Uranus signatures in effect at once. This is the lightning bolt and pain that Uranus can afflict. First you are up, then you are upside down. There’s a whole lotta’ shakin’ goin’ on as August comes to an end, just as we suspected. This series of powerful geocosmic signatures ends as the pre-market opens Sunday evening with Venus in opposition to Saturn. And what do we know about hard aspects between Venus and Saturn? Any market declining into this aspect is a candidate for a low and a rally to follow. In short, a buy candidate, assuming your intraday indicators support a reversal. That’s it for this week. Enjoy the week ahead, be careful with the new Moon square Mars Friday night, early Saturday, and be prepared to be inspired under the innovative, inspirational, but disruptive nature Uranus changing directions near the Moon’s North Node.

Europe European markets were looking at a fairly quiet session up until Fed chair Jay Powell’s speech at Jackson Hole where he gave little indication that the Fed was in a mood to execute a pivot when it comes to monetary policy. Powell’s message of higher rates for longer, along with a report that the European Central Bank was looking to discuss a 75bps rate hike in less than two weeks’ time has seen the DAX slide to its lowest levels this week and has led the rest of Europe’s markets lower, with the FTSE100 also heading back towards the lows of the week. A tentative ruling by a district judge in Florida that time limits the ability to file a claim on Zantac against the likes of Haleon, GSK and Sanofi could mean that any damages are likely to be much lower than originally feared by markets. This has helped push up the respective share prices of all three, having seen some big losses in the past few weeks. Another UK tech company has fallen prey to an overseas takeover after Canada’s OpenText announced they had agreed a deal to buy Micro Focus for 532p per share, a 99% premium to yesterday’s closing price. While the size of the premium has raised eyebrows the price is still below the peaks of last year. Nonetheless the slide in OpenText’s share price suggests that markets think they may have overpaid for it. The weak pound is probably one factor in today’s move, helping to make UK valuations more appealing, however the company’s shares have been struggling for some time with today’s bid price putting them back to where they were just over a year ago. Annual revenues have been in decline since 2018, as has EBITDA, with the company carrying a lot of debt. It therefore makes sense for management to look at this offer favourably, however it’s a stretch to argue that the UK is losing one of its tech crown jewels, given the company’s poor performance over the last four years. French video games maker Ubisoft shares are higher on reports that Amazon is looking at making a bid for Electronic Arts in the US, who make the FIFA franchise of console games.     US US markets opened where they left off yesterday, with very little reaction to the latest PCE inflation numbers for July which showed a further softening in inflationary pressure. Personal spending also slowed sharply in July after the big rebound in June, indicating that higher prices were starting to impinge on consumer spending.   Powell’s comments elicited some market volatility, pushing yields higher, with the Fed chair showing little sign that the central bank was in any mood to pivot on rate hikes yet. There was nothing in what he said that suggested the FOMC was leaning towards a softer tone, but we already knew that given the commentary from a series of other FOMC members earlier this week. The consensus view now appears to be higher for longer, with more rate rises to come, as we head into year end. These comments, along with reports that the ECB could go with a 75bps move next month, has seen markets roll over.     Video game maker Electronic Arts shares have been in focus today after premarket open speculation that Amazon might be looking to mount a bid. While this appears to have been denied, the reports come off the back of recent M&A in the industry when earlier this year Microsoft bought Activision for $68.7bn earlier, as the big tech giants look to boost their content models, although unlike Microsoft, Amazon don’t have an obvious delivery system like the X-Box. Of course, they could add further content by way of the Firestick with online games. Moderna has said it is suing Pfizer and BioNTech for patent infringement over the development of their Covid-19 vaccine. FX The US dollar was trading near the lows of the day in the leadup to this afternoon’s speech by Fed chairman Jay Powell, although this was partly driven by a headline out of Europe that some ECB policy makers wanted to discuss a 75bps rate hike when they next meet on 8th September. This news prompted a sharp surge in European bond yields, on both the short and long end This pushed the euro up to a one week high against the greenback. Powell’s comments did little to shift the dollar back up, suggesting that perhaps the lack of a dovish pivot was priced in by markets. It also shifts the markets focus towards next week's payrolls report, with another good jobs number reinforcing the expectation of another 75bps rate rise next month.       Commodities Gold prices have slipped back from one-week highs in the aftermath...

US Dollar: Sep '22 USD is Down at 108.280. Energies: Sept '22 Crude is Up at 93.47. Financials: The Sep '22 30 Year bond is Down 27 ticks and trading at 136.31. Indices: The Sep '22 S&P 500 Emini ES contract is 53 ticks Lower and trading at 4187.75. Gold: The Dec'22 Gold contract is trading Down at 1762.60. Gold is 88 ticks Lower than its close. Initial conclusion This is not a correlated market. The dollar is Down, and Crude is Up which is normal, and the 30-year Bond is trading Lower. The Financials should always correlate with the US dollar such that if the dollar is lower, then the bonds should follow and vice-versa. The S&P is Lower, and Crude is trading Higher which is correlated. Gold is trading Lower which is not correlated with the US dollar trading Down. I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down. I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong. As traders you need to be aware of this and proceed with your eyes wide open. All of Asia is trading Higher except the Shanghai exchange. Currently all of Europe is trading Lower except the London exchange which is Higher. Possible challenges to traders today Core PCE Price Index is out at 8:30 AM EST. This is Major. Goods Trade Balance is out at 8:30 AM EST. Major. Personal Income is out at 8:30 AM EST. This is Major. Personal Spending is out at 8:30 AM EST. This is Major. Prelim Wholesale Inventories is out at 8:30 AM EST. Major. Fed Chair Powell Speaks at Jackson Hole Symposium. Major Revised UoM Consumer Sentiment is out at 10 AM. Not Major. Revised UoM Inflation Expectations is out at 10 AM. Not Major. Treasuries Traders, please note that we've changed the Bond instrument from the 30 year (ZB) to the 10 year (ZN). They work exactly the same. We've elected to switch gears a bit and show correlation between the 10-year bond (ZN) and the S&P futures contract. The S&P contract is the Standard and Poor's, and the purpose is to show reverse correlation between the two instruments. Remember it's likened to a seesaw, when up goes up the other should go down and vice versa. Yesterday the ZN made its move at around 7:45 AM EST. The ZN hit a High at around that time and the S&P moved Higher shortly thereafter. If you look at the charts below ZN gave a signal at around 7:45 AM EST and the S&P moved Higher at around the same time. Look at the charts below and you'll see a pattern for both assets. ZN hit a High at around 7:45 AM EST and the S&P was moving Higher shortly thereafter. These charts represent the newest version of MultiCharts and I've changed the timeframe to a 15-minute chart to display better. This represented a Shorting opportunity on the 10-year note, as a trader you could have netted about 18 ticks per contract on this trade. Each tick is worth $15.625. Please note: the front month for the ZN is now Sep '22. The S&P contract is also Sep' 22 as well. The front months are now Sep' 22. I've changed the format to Renko Bars such that it may be more apparent and visible. Charts courtesy of MultiCharts built on an AMP platform ZN - Sep 2022 - 08/25/22 S&P - Sep 2022 - 08/25/22 Bias Yesterday we gave the markets an Upside bias as we didn't feel the markets went High enough to satisfy the Smart Money. That and the USD was trading Lower as the indices were climbing Higher. The markets didn't disappoint as the Dow climbed Higher by 322 points and the other indices traded Higher as well. Today we aren't dealing with a correlated market and our bias is Neutral. Could this change? Of Course. Remember anything can happen in a volatile market. Commentary Yesterday when we first viewed the markets the USD was trading Lower, and the indices were pointed Higher. This unto itself is normal for market correlation purpose, but we usually seek for more proof. What led us to give the Upside bias was the fact that after a number of days closing Lower and the indices losing hundreds of points; we didn't think the Smart Money would be satisfied with the gains from Wednesday's session. This is a call that can be made by years of experience watching the markets. Does it work all the time? No....

In this week’s Live from the Vault, Andrew Maguire highlights the possible implications of Russia’s plan to create its own international standard for the precious metals market by establishing a local LBMA-competing brand. With global investors growing frustrated over the unnatural capping of the gold and silver prices, the London wholesaler provides further evidence of the COMEX’s broken pricing mechanism. Timestamps 00:00 - Start 01:25 Picking last episode’s threads. 09:50 - What’s going to happen in the silver market? 11:40 - Russia is creating its own LBMA-competing brand! 24:42 - Where is the short-term imbalance likely to play out? 35:10 - About the new Russian gold and silver benchmark. 43:15 - Andrew’s predictions on the Russia-China alliance.

The Moving Average Indicator shows negative signals. The momentum oscillators hold onto the neutral zone. Any downtick could drop the price. The descending trendline still prevents a change in the price attitude. The precious metal erased all of yesterday's gains due to the slide following the challenge of the descending trendline. At 10:30 am GMT, the XAU/USD exchange rate was 1,759.80, representing a daily loss of -11.60, or 0.65%. This analysis is based on a daily time frame. The precious metal could not alter its negative temper. As soon as gold encountered its first challenge by touching the declining trendline. The rejection caused the yellow metal to lose almost all its yesterday's worth of gains. In addition, the Moving Average Indicator 100-MA crosses below the 200-MA and the 50-MA crosses below the 100-MA, sending a daily bearish signal. In contrast, the Relative Strength Index maintains its position in the natural zone with a decline in momentum, recording 44.20 on the value line. Any additional decline in momentum would weaken the yellow metal. However, on the daily time frame, the XAU/USD encounters the first hurdle on the downside at 1748.39. If the price of gold falls below the aforementioned level, that would put the 1732.88 support level as the second barrier. Market participants may see the 1720.20 level as the next level down. followed by 1687.52. Alternatively, if gold wishes to recover some of its weekly losses, it must maintain a price above $1,748.39. Therefore, this would encourage the XAU/USD to encounter the 1762.49 level of resistance. If the precious metal were to surpass the indicated level, it would pave the road to the 1774.04 resistance level. A successful breach would provide access to 1786.95. 1793.04 comes next. Note: That when a resistance level is broken, it becomes a support level since the price will trade above it, and vice versa. Alternatively, the market may perform a false breakout or rebound after breaking support, or vice versa. Additionally, the market could bounce from any level of support or decline after breaking any level of resistance.