MCX Gold Faces Resistance At 27020

MCX Gold October: Sell CMP 26600 | Stop @ 27020 | Target @ 26185 — 25353

MCX Gold Faces Resistance At 27020

The daily technical chart of MCX Gold October contract shows A-B-C Pattern formation. Gold dropped from 27833 (Point A) in June and took support at 26169 (Point B) in August. Thereafter, gold prices retraced by 50% of the  decline from Point A to Point B and touched the resistance of 27017 (Point C) recently.

The prices are expected to correct if it fails to cross the resistance level of 27017.

Gold fell by 1664 points (27833-26169). As per the A-B-C Pattern, calculating the same distance from 27017 will bring the target to 26185 (27017-832) on the lower side, which is the 50% of distance between Point A and Point B.

Thereafter, the next target could be 25353, considering the 100% of distance between Point A and Point B.

However, if gold reverts from the current level and trades above 27017 then the target on higher side would be 27830. 

MCX Lead Outlook Weak; May Fall To 112.40

MCX Lead September: Sell Below 114.5 | Stop @ 116.25 | Target @ 112.40 - 109
Risky Trader Sell CMP 115.55 | Stop @ 116.25 | Target 114.50 - 112.40 - 109

MCX Lead Outlook Weak; May Fall To 112.40

The lead futures contract traded on the Multi Commodity Exchange (MCX) has formed a Diamond Pattern. The pattern top is seen at 116.25 (Point C) and low at 114.15 (Point D). The Height of the Diamond comes to 2.1 considering the difference between these two points (116.25-114.15).

A breakdown is expected at 114.50 and lead may fall to 112.40 levels (114.50-2.1).  If the contract continues to trade below 112.40 then prices will further decline to 109 from where the uptrend began, before forming the Diamond Pattern. The contract faces resistance at 122.15.

Diamond Pattern:
The diamond formation reversal pattern occurs rarely. However, when it does, it usually forms at market tops rather than at bottoms. The diamond starts off as a broadening formation and then consolidates, usually forming a symmetrical triangle. The combination of price patterns first broadens and then consolidates, giving the geometric shape for which the diamond is named.

Canada arguably in recession after 2nd straight GDP decline

By Steve Goldstein

Published: Sept 1, 2015 9:59 a.m. ET

Canada has entered what many consider to be a recession as the country deals with the consequences of a dive in oil and other commodity prices.

Statistics Canada on Tuesday reported a 0.5% decline in second-quarter GDP, following a downwardly revised 0.8% decline in the first quarter. A recession can be defined as consecutive negative quarters of growth, and Canada is the only of the Group of Seven industrialized countries in that territory. The U.S. grew 3.7% over the same time period, the Commerce Department reported last week.

While not everyone agrees Canada in recession — employment has not declined — it’s not a pretty picture.

“While not yet a recession, since employment hasn’t declined, Canada’s first half was about as weak as advertised, although the momentum registered in June is consistent with our view that the third quarter will provide a breather as the economy, at least for a quarter, returns to growth,” said Avery Shenfeld of CIBC World Markets.

Canada’s mining and oil sectors were to blame, with oil and gas extraction collapsing at an annual rate of 15.4%, and mining tumbling by 5.9%.

The weakness from energy spread throughout the economy, as utilities shrank by 7.5% and construction dropped by 4.9%.

Household consumption managed to rise, as Canada, like the U.S., continued to see strong demand for autos. That resulted in a fall in the savings rate, to 4% from 5.2% in the first quarter.

A quarter-point rate cut from the Bank of Canada could come at the Sept. 9 meeting, argued Bricklin Dwyer of BNP Paribas in a note to clients.

“The Bank of Canada is likely to read this report as disappointing. While the quarter’s growth was in line with their forecast, Q1 was weaker than they thought. This combined with the composition of growth and the recent move in oil prices, suggests that the risks to the outlook remain clearly skewed to the downside,” Dwyer said.

The Canadian dollar USDCAD, -0.1207%  held its ground after the release of the report, but over 2015, the U.S. dollar is up about 13%.

http://www.marketwatch.com/story/canada-arguably-in-recession-after-2nd-straight-gdp-decline-2015-09-01

Bank Nifty Breakdown Below 16500 tgt 15200 - 14500

Nifty Head & Shoulder pattern formation

Remembering The Summer Of 1929

Submitted by Jesse via The Burning Platform blog,

This is one of the best documentaries on the Crash of 1929 if you wish to get a feel for the times.   You may find it interesting to watch the whole thing below.I have posted the entire documentary twice before:  once, on the 80th anniversary of Black Thursday in 2009, and once before in December of 2007.

I remember the Summer of 1929 being described as unusually hot, with the stock market going up and down like a roller coaster, making investors and pundits almost dizzy.  That is, until the great push up to the very height of the market in early September.

It was the laissez-faire abuses of the 1920’s, the reign of supply side economics,  the institutionalized political corruption of easy money, an oversized,  overly influential and powerful financial/industrial sector that set the stage for the terrible Depression of the 1930’s.

It also gave rise to the many reforms introduced by the FDR administration.

Most of which have been steadily overturned, one by one, by the big money interests who care for nothing but themselves, and would do it again, and again, if allowed to do so.

Most of the scams of the moneyed interests are remarkably simple, and the same over time.  At least they are once you scrape away the jargon, the bells and whistles, and paid for policy theories of pedigreed prostitutes.

The titans of Wall Street are no smarter than many smart people who do much more difficult jobs and lead simple, honest lives. But they are driven, they are insatiable, and they are shameless.

Enough people are easily fooled in each generation by well scripted ideological PR campaigns, clever revisions and misrepresentations of history, and the steady drumbeat of slogans and propaganda to allow the same old scams and abuses to come back again.  And unfortunately even very smart and powerful and greatly advantaged people are always willing to do anything for money.

Here is a link to the transcript of this documentary.

Narrator: At sea and on land, everyone seemed to be making money. It was a stampede of buying. And major speculators like John Jacob Rascob whipped up the frenzy. He told readers of The Ladies’ Home Journal that now everyone could be rich. September 2nd, Labor Day. It was the hottest day of the year. The markets were closed and people were at the beach. A reporter checked in with astrologer Evangeline to ask about the future of stock prices. Her answer: the Dow Jones could climb to heaven. The very next day, September 3rd, the stock market hit its all-time high.

Ben Karol, Former Newspaper Delivery Boy: My father and I had an ongoing discussion about the stock market. And I used to say, “Pop, everybody’s getting rich but you. You know, you work so hard and you’re never going to make a nickel. All you do is you keep delivering these newspapers and that’s about it. The guy who’s shining shoes is in the stock market, the grocery clerk is in the stock market, the school teacher’s in the stock market. The teller at the bank is in the stock market. Everybody’s in the stock market. You’re the only one that’s not in the stock market.” And he used to sit and laugh and say, “You’ll see. You’ll see. You’ll see.”

Narrator: On September 5th, economist Roger Babson gave a speech to a group of businessmen. “Sooner or later, a crash is coming and it may be terrific.” He’d been saying the same thing for two years, but now, for some reason, investors were listening. The market took a severe dip. They called it the “Babson Break.” The next day, prices stabilized, but several days later, they began to drift lower. Though investors had no way of knowing it, the collapse had already begun

Narrator: In the weeks to follow, the market fluctuated wildly up and down. On September 12th, prices dropped ten percent. They dipped sharply again in the 20s. Stock markets around the world were falling, too. Then, on September 25th, the market suddenly rallied.

Reuben L. Cain, Former Stock Salesman: I remember well that I thought, “Why is this doing this?” And then I thought, “Well, I’m new here and these people” — like every day in the paper, Charlie Mitchell would have something to say, the J.P. Morgan people would have something to say about how good things were — and I thought, “Well, they know a lot more about this market than I do. I’m fairly new here and I really can’t see why it’s going up.” But then, when they say it can’t go down or if it does go down today, it’ll go back tomorrow, you think, “Well, they really are like God. They know it all and it must be the way it’s going because they say so.”

Narrator: As the market floundered, financial leaders were as optimistic as ever, more so. Just five days before the crash, Thomas Lamont, acting head of the highly conservative Morgan Bank, wrote a letter to President Hoover. “The future appears brilliant. Our securities are the most desirable in the world.” Charles Mitchell assured nervous investors that things had never been better.

Craig Mitchell, Son of Charles E. Mitchell: Practically every business leader in America, and banker, right around the time of 1929, was saying how wonderful things were and the economy had only one way to go and that was up.

“Running for President under the slogan “Rugged Individualism” made it difficult for Hoover to promote massive government intervention in the economy. In 1930, succumbing to pressure from American industrialists, Hoover signed the Hawley-Smoot Tariff which was designed to protect American industry from overseas competition. Passed against the advice of nearly every prominent economist of the time, it was the largest Tariff in American history. (at that time the US was a large export economy with a trade surplus).

Believing in a balanced budget, Hoover’s 1931 economic plan cut federal spending and increased taxes, both of which inhibited individual efforts to spur the economy.

Finally in 1932 Hoover signed legislation creating the Reconstruction Finance Corporation. This act allocated a half billion dollars for loans to banks, corporations, and state governments. Public works projects such as the Golden Gate Bridge and the Los Angeles Aqueduct were built as a result of this plan.

Hoover and the RFC stopped short of meeting one demand of the American masses — federal aid to individuals. Hoover believed that government aid would stifle initiative and create dependency where individual effort was needed. Past governments never resorted to such schemes and the economy managed to rebound. Clearly Hoover and his advisors failed to grasp the scope of the Great Depression.”

What side effects will U.S. rate hike trigger? Emerging markets, Europe will suffer - Analysts

Today central bankers, analysts and economists are gathering in Jackson Hole for their annual meeting. Two questions are on the top of the agenda: Will the Fed hike interest rates in September, and will the global economy sink if it does?
For months, traders, economists and various market players have been wondering whether Fed Chairwoman Janet Yellen will raise rates in September or wait until 2016. Ms. Yellen has decided not to appear at the Jackson Hole meeting this year, possibly because she's already sick of this endless question.
But she's partly to blame for that. For weeks, she went back and forth on the rate liftoff question. Sometimes she said the time was approaching, while after that she highlighted further economic recovery was needed.
Recently, the unemployment rate in the U.S. has been approaching low levels - at which workers' bargaining position could get strong enough to induce economy-wide wage increases - which are usually a crucial factor in driving inflation.
Since the beginning of the global financial crisis 2008, the Fed kept its "federal funds rate" (the rate at which the Fed lends to banks) at the lowest levels in history - between 0.0 and 0.25%. With interest rates offered to savers by commercial banks set lower than the inflation rate, wealthy people have complained about having their savings devalued, or even robbed of, as a side effect.
On the other hand, financial markets participants with the ability to borrow on margin have become cheap-money addicts. Besides, the central bank's policy of large-scale bond-buying (QE) between 2009 and October 2014, under previous Fed Chairman Ben Bernanke poured $3.5 trillion into the accounts of institutional investors. This avalanche of money had to be invested somewhere, and so QE's net result was a sustained equities boom, Deutsche Welle comments.

Risks for emerging markets

Two years ago, when Bernanke hinted at a nearing end of QE, emerging-market currencies got under a heavy pressure. Among the hardest-hit countries were Brazil, South Africa, Turkey, Indonesia and India, which since have been called the "fragile five."
Commerzbank analyst Lutz Karpowitz said in a report: "What made them especially vulnerable was their high trade deficits, which became more expensive to finance in 2013 because of slightly higher US interest rates and a stronger US dollar."
Since then, India's trade deficit has substantially decreased. Indonesia's one has shrunk somewhat too, while others have remained vulnerable.
For many analysts, Brazil is a concern. Over there, production and consumption are both in decline, and inflation is hitting double-digit levels. Russia has been extremely weakened with the rouble plunging due to the lower prices of oil. In Turkey, political uncertainty is putting the Turkish lira under pressure. The circle of unstable emerging economies is growing.
China deserves a special mention. The economic uncertainty connected to internal debt crisis in the second largest economy is threatening to infect its trading partners. The global economy is expanding less than expected, Chinese exports are declining, and Shanghai equity prices are have just started recovering after a grinding 23% drop.
The Chinese slowdown is affecting its partners: Dutch wealth management company NN Investment estimated that almost a trillion dollars has left emerging markets over the past 15 months.
Undoubtedly, Chinese or Brazilian problems have nothing to do with the Fed rate hike, but it would nevertheless intensify negative trends in EMs - because it could cause a great deal more money to be pulled out. This could trigger "something like the Asian crisis at the end of the 1990s, when countries would have to impose capital controls and protectionist measures" to prevent the collapse of their economies, chief economist at Assenagon Group Martin Hüfner said in an interview with DW.

Developed and emerging markets

Risks for Europe

Europe will not be hurt too much. Quite the opposite: the strong greenback has helped euro-denominated exports more competitive globally. However, Europe could feel the side effect from EMs.

Today the world has hardly any tools left in hand with which to face a crisis: interest rates are already at near-zero levels; stimulus packages like the ones launched in 2008 aren't likely either, since many national governments are already groaning under high debt loads.
The Fed is now considering the global environment which could soon include the EM rout and thinks on postponing the hike.
Yesterday, William Dudley, president of the New York Federal Reserve Bank, added fuel to the speculation that rates won’t lift off in September. At a news conference in New York Dudley said, “From my perspective, at this moment, the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago.”
However, the strong data released earlier is quite convincing that the Fed may shrug off the turmoil overseas.
Data released yesterday showed that U.S. core capital goods orders showed the biggest increase since June last year.
Investors will now await the U.S. second quarter GDP later in the day, as well as a weekly report on initial jobless claims and data on pending home sales for July.
But above all, there is Jackson Hole in focus, with its questions and awaited answers.