Vince Lancis Fed Day Survival Guide | Arcadia Economics
Summary
Transcript
There’s a picture of it. What is that about? It’s about him fielding softball questions from people so he can massage people’s feelings and justify the press while using them as a megaphone. However, every so often a question gets out there that he kind of isn’t prepared for and he stumbles through and the market will react to it. Not lately, but during the inflation hike. Big deal. Big deal.
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 is Vince. Good morning. I’m Vince Lancey and today’s market rundown is about to start. We’re going to talk about Fed day survival. I’m going to make this easier for everyone to understand and use rather than deal with people who hide behind terminology.
So call it Fed day survival. Right. You’ll get more out of it today if you get a chance to listen to this in premium. We have prepared the CTA positioning in detail with what to expect the rest of the week from that cohort of investors. And then we’ll look at some market driving news. But first, let’s look at the markets themselves. That’s the gold four hour chart you’re looking at there.
Dollar is up 27 at 100 and 410. Pretty strong. Bond yields are flat at 428. Spot nine. The S and P 500 is up six and a third at 51 82. The VIX is 1387. Little bit higher, relatively firm, which is to be expected going into a Fed day. Gold is 21 54 and change, that’s down 3. 20. Hovering above where I happen to believe there’s a lot of buying.
Pre Fed buying. Silver is 24 80, down $0. 06. That’s kind of annoying. Little disturbing. I want the market to be above 25, but I don’t think the price means anything in any commodity right now going into the Fed. It’s after the Fed that the pricing matters. Copper is down almost three cents at four spot one. Bitcoin is trading 63 and change up 1258. Ethereum, 32 67. That’s a big sell off there as well.
Up 105. Palladium and platinum are mixed. Palladium is 98 4980, down $6. Platinum is 894, unchanged slightly, a little bit higher. Crude is 8253-8251. I should say, down $0. 42. Another breather. They closed higher yesterday. Again, natural gas is down 1. 6 cents, almost 1%. Be careful. Grains are mixed. Corn is down. Soybean is up and wheat is also down. Okay, let’s go to main story. All right, so today is a fed day survival guide.
Doing this now, you’ll be able to get something out of it at 02:00. Other than with all the talk about decisions and dot plots and QT and tapering. We’re going to make it easy for you. Okay? It’s not rocket science. It isn’t. It’s like a lawyer trying to tell you something is more important than it is. It isn’t. Show you how to read it. Okay. There’s the homepage.
The gold bean story, top left hand quadrant says weekly part two or three. Zoltan lays out the state’s endgame for bitcoin. That’s a previously premium post, unlocked. And it’s been unlocked because there’s a lot of interest in the state’s endgame for bitcoin that’s been talked about, especially after that 400 bitcoin spoof lower. I call it a spoof. So I thought bringing out one of the few times that Zoltan really spoke at length about bitcoin was appropriate.
So we did a podcast on that. I unlocked that. Enjoy it. Right. And then there’s the big long, which people are very interested in, it seems. That’s good. People are getting focused. Okay. Market commentary. As I said, it’s going to be about the Fed. The fed day is about four things. Okay. I’m going to show you four types of charts. Four things. And I’m going to try and make it so that you can figure out as it’s very important.
Fed day is very important, not just because they tell you it’s important, because it is important. So it’s important for the future outlook. Now, it’s not necessarily going to change your portfolio on a day to day basis that you care about if you’re a long term investor, but it’s important to give you an idea of what the path is. Okay, so the four things. The first one is the decision.
Wait, I think I have it up top here. Yeah. No, I don’t. All right. The four things. The decision, the dot plot, the red lined statement and the speech. There’s more than that, but I’m going to simplify it to get the most out of it. So the decision, it’s pretty simple. They either cut, hike, or do nothing. Right. And that graph there, courtesy of zero hedge, I’ll make it a little bit bigger.
I thought it would make it bigger. That graph there shows the path of the market’s opinion of rate cuts. So they thought we were going to have a bunch of rate cuts and it’s going down. And now they think we’re going to have three rate cuts for the rest of the year. The overwhelming consensus is for the Fed to keep rates unchanged at five and a quarter to five and a half on Wednesday and also in May.
I’m quoting zero hedge on that. And that’s pretty reliable. Again, if the Fed does something well, then this is completely wrong and the markets will react to it. There’s an extended comment on that. I’m not going to get into it now, except to say that’s the part that everyone focuses on that is most predictable. And the Fed doesn’t like a surprise on that. Second one is the dot plot, which can be important sometimes it’s really not.
But this week, this month, it’s pretty important. It’s the outlook for future action. For the rest of the year. It’s the glide path. So the market will focus on various things in the dot plot. This month they’re going to focus on, well, will the Fed continue to have three cuts, or will the Fed give a hint that they’re going to have two cuts and it is a statistical representation.
It’s also called the SCP report, showing what their bias is. One guy says three, one guy says two, and it kind of like puts their votes there anonymously. But that’s what it is. The market’s focus again, zero X. The market’s focus will be on the accompanying dot plot with risks that the Fed may flip flop again, this time hawkishly, and the 2024 median forecast may nudge higher to two cuts from December 3 cuts.
Three cuts is lower, two cuts aside, blah, blah, blah. Next thing is the written statement. The written statement is very nuanced. If you’re not familiar with it. Once you’re familiar with it, you’ll get it. They put out an official statement and people look at the statement for word changes, right? And it’s very nuanced. If they’ve been saying there will never be a rate hike again for ten months in a row, and then they say there probably won’t be a rate hike again, that’s a big change.
So those words matter and everyone tries to predict them. That’s called the red line. Almost nobody gets it right. The last thing is the speech. The speech is typically the most boring if you know the business, but it’s also the most enlightening if you don’t know the business. So pal speaks at 230 on the interest rate decision, and there’s a picture of it. What is that about it’s about him fielding softball questions from people so he can massage people’s feelings and justify the press while using them as a megaphone.
However, every so often a question gets out there that he kind of isn’t prepared for and he stumbles through and the market will react to it. But during the inflation hike, big deal. Big deal. So there you go. That’s the Fed, right? The decision, will they or won’t they? The dot plot, are they leaning towards more or less cuts? Right. The statement, did they change any wording that contradicts what’s just been said and then the speech.
Does he do anything stupid during the speech or does he handle it well? So those are the things to pay attention to. All right, market rundown. Before we do the market rundown, I want to spend a little time on bitcoin. In a kind of a meta conversation yesterday, bitcoin dropped to like 9000 on one exchange. And I did not bring it up because I didn’t have my head totally around it and I actually thought it was bullshit, but it apparently wasn’t bullshit.
So here’s a take that I think you probably won’t hear too many other places. And I want to read this to you. Bitcoin ethereum. The slam on Bitmex was completely unwarranted, but shows what someone will do to keep price down. Just like metals. Who sells 400 bitcoin at that hour? Metals, people will understand. Who sells 50 tons of gold at on Sunday? It’s the same thing, folks. New buyers.
Now what the effect of this is, although it may not be obvious, new buyers are scared for the first time. All those corporations that bought it at 55, 60,000, they’re going to be patient. Now, smart buyers know more of this can come. That will be your holders, your stackers, right, whatever you want to call them, they’re like, okay, more of this can come. No big deal to us.
The result will be lowered bids, patience returning to the market and possibly a lower range, is being determined to give them, the banks time to buy what they need to buy for ETF buyers. Now, this is all opinion, but it’s steeped in gold and silver history. So we have some good analysis on this space we’ll be sharing later on today from a couple of banks. And they think bitcoin is going to 200,000.
And I understand why they think that based on GLD, how people flow. It’s a flow analysis. Okay. I think bitcoin is worth this. I think based on the amount of flows going into it, it’s going to squish up to 200,000. And the answer will be probably lower than that because the banks are going to slow it down. But that’s how it works. Okay, bottom line for bitcoin is a cornered tradfi rat will do desperate things.
If you expect surrender, you are mistaken. Rationing of power, fud delay execution. Fast markets. They have many tools to win. And if they lose, they will make sure they hurt you most. Lots of typos. I’ll fix that later on. What am I referring to? I’m referring to who sold 400 bitcoin at an illiquid hour. What kind of a moron would have enough money to own 400 bitcoin and do that? Well, the same kind of moron that would sell gold through the IMF at.
Okay, selling 400 bitcoin down gives them an opportunity to buy 400 bitcoin. I would not be surprised, I’m not accusing, but I would not be surprised if they were trading with themselves on that. It’s happened a lot. People think that that doesn’t happen. It happens all the time. You stab it on the floor a lot. And finally, not only do you get it lower, of course it doesn’t go to 8000, it’s trading 63,000 now.
But you make people pause and think you kill the FOMO without killing the product. That’s the idea. All right, so moving to the news, Meta says it’s offered to reduce the price of its ad free subscriptions. Yes, well, that’s because you mispriced them too high and we might be going into a recession. And that’s called the advertising model. The government of Dubai, I’m sorry, Dubai, Saudi Arabia, plans to create a fund of about 40 billion to invest in artificial intelligence.
Expect to see Silicon Valley people move to where the money is. Microsoft has hired Mustafa Soleiman, the co founder of Google’s DeepMind and chief executive of artificial intelligence startup inflection, to run a new consumer source. So Megacap is getting more mega ish, or revolving door from one company to another is rotating Nvidia CEO Jensen Huang. Huang told CNBC Jim Kramer on Tuesday that investments in artificial intelligence computing remain in the early innings, predicting years of growth ahead as the technology affects a range of industries, including healthcare.
He’s right, in my opinion. But saying that is not something I want to hear from the CEO of a company who trades in an asset chips, which eventually are commoditized. So it’s a little bit Cathy wood. Right. Chipotle Mexican grill stock rose more than 2%. They might do a 50 to one not reverse but split, which is the democratization of gambling, geopolitics, most of it that I think is significant, if at all, is related to the South China Sea.
There are things that you can read there on your own. One of the things the US is now talking openly about, its hypersonic capability. It’s like the space race all over again. Anyway, data on deck today. You can see, as I said, 02:00 p. m. . Fed. Open interest Fed open market committee interest rate decision at 230. The Fed will have their conference tomorrow’s jobless claims and PMI.
Take a quick look at the charts. There’s gold, four hour range. Let’s go to the daily. Just a quick one here. Right? This is the range. This is the pre Fed range, right? The buying is here, the selling is here, the selling is here, the buying is there. Buying above, selling a little bit under that, buying inside, selling under that. And that’s how it works. That’s what’s going on.
Silver as I said, I’m not happy about this not being below 25, but as long as we’re, let’s say, above 24 50, Fed news notwithstanding, then we’re still healthy. I don’t think it’s a bad thing to be working in here. I think I’m getting a little bit ahead of myself, getting all nervous. That’s my own scar tissue showing. Anyway, I’m Vince. Have a great day. Thanks for watching this morning’s markets and metals update with Vince Lancey, brought to you each day by Miles Franklin precious metals, where this week pre 1933 $20 Gold Liberty coins are only $65 over spot per coin.
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