Vince Lanci: Its Silvers Turn Now | Arcadia Economics

Now we’re going higher. So this is the shakeout. The tree got shaken. Week longs like myself. Algorithmic longs. I would have been an algorithmic long in there. Got stopped out and now we can go up. This is, you know, this pattern is, this pattern is really powerful for silver. Welcome to the Morning Markets and Metals with Vince Lancey. Where each morning Vince brings you the financial and precious metals news to get you ready for your day. And now here’s Vince. Good morning, I’m Vince Lancey. This is the Market Rundown. Thursday, the day after Fed Day, and we’re going to discuss what happened yesterday, what is likely to happen going forward, and some observations on markets themselves.

The title is, tentatively, we have liftoff and that refers to everything. Gold, inflation, stocks, bond yields, everything. Oh, silver especially. And we’ll get into the reasons why silver especially. I think it’s silver’s turn. It really might be silver’s turn to catch up and overtake gold. That gold-silver ratio could be collapsing now. Okay, enough of those opinions for the moment. Let’s take a look at the markets first. The dollar is down 25 at 100, spot 67. 10-year yields are 371, unchanged bid after rising yesterday, despite the Fed cut. Love to see that. S&P 500 is 5714, up 87.

The VIX is 1669 down a penny and a half, one and a half vols. Gold is 2587, up 28, near the highs but not on the highs. SAXAG, I want to say silver AG. Silver is 3116, up about nine. That’s 3.6%, a whopping 3.6%. And copper is 432, up eight cents, a whopping 2%. Silver is the Goldilocks metal. It’s precious and it’s industrial. And when the world is buying gold and the Fed is lowering rates, you don’t want to be short silver. All right, moving on. Gold-silver, significantly weaker. I think this is the big one.

Call Michael Oliver. WTI 7185, up $1.43. Beautiful, you want to see that. If you have an inflation theory, natural gas, 223 down three cents, Bitcoin up 809, 62, 549. Also breaking out. Ethereum 2432, up 57. Palladium up 42, at 1098. Platinum 988, up 17. Well, platinum is really just being left in the dust by Palladium now. Soybeans down six cents. Corn down two cents. Wheat down eight cents. 1023, 398, 572. Maybe Pall is lowering rates and printing corn now as well. It’s hard to say. Okay, humor aside. Let’s get to the meat of this.

Yesterday we put out five posts. We’re sorry for the deluge, but we’re not sorry for the information. It was almost real-time boasting yesterday for us. There was just a lot of stuff coming out. Okay, so home page. Dear Zoltan, we still did a vile moment 30 months later. That post was written at 1053 and it’s still correct. Volker, Volker, listen to me. Pal capitulated. We will not get the vile moment we need to make these markets more healthy. He chose inflation. If you’re long gold, he chose wisely for you. Fed day, 25 versus 50 basis points.

Bullshit aside. That was my comment yesterday. The hopes for 25 basis points as a reasonable person and the expectations that a 50 basis point thing could be probable and not pretending to predict it. News, UBS, Russia, and bridge tax abolition. There are four other posts. We’re going to touch on those in a second. All right. He chose inflation. Quick comment. Inflation is not dead. It is the lesser evil for Pal now, whether he sees something he doesn’t like or is just playing by his own data-based rule book. It doesn’t matter. Inflation is the lesser evil.

As long as domestic and global markets respond properly, he will do that. Stagflation is the bigger evil. Recession is not an option. Summarizing this more cohesively, Pal chose to look at the current inflation data, which clearly shows a path that 2% is almost metaphysically certain. He chose to ignore labor wages, labor pressures, which are increasing again. He focused on unemployment as the reason for lowering, yet said unemployment wasn’t a problem. Oh, what else did he do? Oh, he completely ignored the housing problem. Houses are at like near all-time highs, and rent inflation is not going away, even though they say it’s in the pipeline.

He’s woefully ignoring future inflation for current inflation. It’s a guy who’s running out the clock, in my opinion. There’s the Fed chart, right? There’s Fed, you know, here’s the Fed hiking regime, and here’s him dropping 50 basis points. All kinds of global implications for this. Actually, let’s do that now. Jumping around a little bit, I want to show you something. In looking for my silver explanation, I want silver to rally more than gold, and I think one of the signs that it would rally more than gold would be how emerging market stock behavior perks up relative to a Fed cut.

So to put it in human terms, silver is like an emerging market. When the Fed lowers rates, people put their money into emerging market stocks, because those countries are getting squeezed less by rates, and they put their money into silver at the same time, at the same thing. And if you look at this chart, you can see that overseas markets, very quickly, I’ll help you out with this. Overseas markets did very well. Nikai up 2%, China up 69 basis points, UK up 1.1%, et cetera, et cetera, et cetera. The weekend, so this is good for silver, but the weekend was China.

That’s a monthly chart. But I think this puts more pressure on China to devalue a little bit. So bringing it back to silver, those things are signs that silver should be going up, and it is going up. And this bull flag is broken. This should not be this. Oh, what’s the high? The high is 3251. We should take out this high next week, if not this week. I’m pretty sure of that. Okay. Doesn’t mean we can’t drop a dollar before we get there, but you have to understand this is silver. Okay. Where was I? Back to the script as if there was one.

So he chose inflation. That’s the first thing. The news yesterday, I put out a whopping five stories on the topics that were related to what’s going on. Today, this will be the only email you get if you’re getting the video post. There will be a PM email as well, but I won’t send it. I’ll have the intern send it so I can say that anyway. Breaking news, working backwards, breaking news, Fed cuts 50 basis points, markets react and reverse. Markets all reacted as we thought they would, and then they all reversed very hard.

That was profit taking. And you know that after the fact, because of how they’re acting today. Dear Zoltan, we need a vol moment 30 months later. He predicted that Powell would let the market drop, and he’s not. Fed day, 25 versus 50 basis points. Bullshit aside. We talked about that last minute. This is damn interesting. We sent this to founders. We’ll share it with you topically. All the banks were 25, all the major banks are 25 basis points, except JP Morgan. There were 50 basis points. Even Goldman Sachs, which likes to be fluffing about things, was 25 basis points.

Then last minute, hours before, the night before, the head of trading at Goldman Sachs, in contrast to the chief economist, said he thinks 50 basis points. And so we shared that with founders now. There’s no opinion about the markets there. We just think it’s interesting when a bank head of trade disagrees with the chief economist. And then Hartnett’s global fund survey and Fed day, those things were related yesterday. We’re going to be throwing together a chart package from that because it was very interesting. It’s a survey that Hartnett does of the global fund managers that are clients of theirs.

And there’s a good relationship there. He’s frank with them. They’re frank with him. And he creates some data charts for us to appreciate from that. Okay. Next, back to inflation. While pal is telling us inflation is headed towards 2% on his data, the real time inflation is getting baked in higher. So Amazon announced Wednesday, Wednesday, Wednesday is raising wages for its hourly warehouse workers by a dollar an hour, comes out to be like 6% or 9%. Sam’s Club earlier this month, workers are to receive a raise, higher starting wages, but still lagged behind Costco.

Sam’s Club is owned by Costco. The big box giant said in a press release that it would increase employee pay between 3% and 6% starting November 2nd. Okay. Those are wages going up. They’re not going to fire those people. People are going to get fired, but it’s not people working in big box stores. It’s not people working manual labor. It’s people working in finance. So you’re getting fired if you work at JP Morgan. You’re getting fired if you work at an insurance company, right? And you’re getting fired at all the small businesses that deal with them in the service side.

But the employees that stay are getting higher wages. It’s truly a replacement era as manifest in the whole services economy, not to be confused with services inflation, services economy getting whacked, right? And manufacturing getting its button, so to speak. And low-employed people will get higher pay because Amazon wants to attract people that are competent, right? So anyway, inflation is baked in. All right. We’ll talk more about that in premium. Let’s, let’s do, let’s do a little chart point here. Okay. All right. Let’s do the hourly and remove the Bollinger Bands so you can see what we’re trying to get at here.

When markets digest news events, data, usually data, when markets digest known approaching news events, they have what we call the three R’s. And subscribers know about this for years. The three R’s are react, um, um, respond. I’m sorry. I’m forgetting that, right? React, reassess reality. Okay. So react. Powell says he’s going to call 50 basis points. Silver rallies reassess. I’m not so sure. It’s really that good. Market sells off. Now what’s going on in these two candles? That’s FOMO getting in. Right. And that’s profits being taken. All right. It’s a big one, but it’s profits being taken.

And then you usually over the next couple of hours, you see reality and reality is, okay, the hot money got in or the hot money here, short covering, covered long Scott out. And now you’ve got reality setting in and cooler heads are getting it. Well, reality is reality stops reality supposed to stop here, but it’s, it’s still going and it’s up here. This is reality now. So react higher reassess lower reality here. Those are the three R’s in every market had them yesterday. There’s silver. Here’s gold, by the way. See that peak there.

We’re back to the peak. Silver doesn’t go back to the peak. Unless it’s going to go higher. Gold. React reassess reality. Right. Shorts covered. A lot of longs got out. Life was caught again. Should have gone lower, frankly, and the market goes up to here, but still not on the highs. Stocks. Classic react reassess. And reality is this is, this is just, you know, this is how it is when you’re the U S stock market copper react reassess. Look at that copper, right? All right. So, so back to silver. Why is silver? Why is it silver’s turn? Well, silver has been, first of all, there are big shorts in silver.

Silver has been shorted for various reasons. Two of them are buyers of gold will sell silver to offset and lower margin costs. And also because they speculatively believe that central banks are buying gold, not silver. And therefore it’s a good trade. Yes, it was a good trade a year ago. Comment aside. Second reason to short silver. Well, there are CTAs and smaller hedge funds that will short silver and copper in anticipation of economic problems. So there are long stocks, right? And they say, I don’t want to sell my stocks out and they sell silver and they sell copper in their CTA funds and they get short as an economic hedge, rationalizing their positions.

And when it works, it works big and it works over a long period of time. If you think back to what happened in February of 22 through August of 22, silver just kept dropping even when gold wasn’t dropping as much that we had explosive rally, but that’s another story. So that’s why silver and copper gets sold. So why is silver rallying? Well, you’ve got those shorts that are going to cover now. They’re going to cover. And they don’t care. The CTAs don’t care. They’re like, fine, just buy it because they’re making money in stocks.

They’ll take the loss, right? The other shorts that are covering with the gold thing, they’re probably selling a little gold out buying some silver, but they’ll continue to drive this market. Now, the Fed is lowering rates, which means this will be a US driven rally potentially. And that means you’re going to see a lot more buying by US investors. And that means you’re going to see more money come into silver in my opinion, because US actually has a decent investment cohort in silver. Whereas other countries really don’t show that outside of India and outside of, well, China doesn’t invest in silver yet.

That’s what they say. The other thing is China. The US lowering rates, I believe, I really am not sure, but I’m pretty sure that this puts pressure on China. So the Yuan, if the Yuan were to stay unchanged and the dollar were to weaken, well, the Yuan gets strong against the dollar and it makes it harder for them to sell things. And that puts more pressure on them to devalue. So how can they devalue? Well, they can devalue by lowering rates. They can devalue by stimulus, which seems to be their chosen path going forward.

I think what you’re looking at, silver and copper, you’re seeing people say, oh, China’s next, China’s next, which may or may not be true. But the reality of it is the world, remember the emerging market comment? The world is buying emerging market stocks on this, right? Interest rate pressures are no longer as big of a problem. And so the world will buy silver and gold also. Okay, stay with me now. Well, let’s give you a little bit more about silver here. We’ll do some predicting. I hate doing this, but what did I say yesterday? A couple of days ago, I said, we were, I think, here.

I said, as long as we don’t, oh, I think I got stopped out if I was trading this, right? As long as we don’t settle under here, I think, even if we settled under here, well, we settled under both, right? So I would have gotten stopped out. This market is definitely going higher. Well, we settled under it. I got stopped out on the news item. Mentally, I didn’t have a trade-off for this. Now we’re going higher. So this is the shakeout. The tree got shaken. Weeklongs like myself, algorithmic longs, I would have been an algorithmic long in there, got stopped out.

Now we can go up. This is, you know, this pattern is, this pattern is really powerful for silver, not as powerful for gold. That’s why really, really, really, really like silver now. I’ll be doing something today, I think, to take advantage of it. Oh, here’s the silver chart that I like. That says don’t short it. Okay. You want to use your technical lines, your channels, but here we are above every freaking high. If this thing is above, if this thing is above spot, 2670, 2680, and the candle is green, which it will be, the chances, anything above that, the chances of a moonshot really start to grow in silver.

Anyway, Vince, have a great day. And on the gold side, this week’s special is one ounce gold Kuberance for only $60 over spot. And again, you can place an order by calling 833-326-4653 or emailing us at Arcadia at milesfrankton.com. Happy to answer any questions you have and get you set up with whatever you need. So call us at 833-326-4653. And as always, thanks for watching. Please note that this video is not intended as legal licensed financial trading advice and is to be used for informational purposes only. Please contact your financial advisor before making any decisions.

And thanks for watching. [tr:trw].

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