June 7, 2013 - Issue #689

In This Issue

1. TTN June-July 2013 Outlook: Goldilocks and the Three Central Banks
2. Hot Market Review - Gold Bulls and Bears continue to Fight
3. Economic Calendar

1. TTN June-July 2013 Outlook: Goldilocks and the Three Central Banks

From Our friends at www.TradeTheNews.com 

So far in 2013, markets have convincingly broken the pattern seen in recent years. Supportive monetary policies helped markets shake off the "spring swoon" that characterized the last two years, and stocks are up double digit percentages in the US, Japan, and across most of Europe. Anticipating better economic times ahead, treasury yields are starting to move too -- as speculation grows that the Fed quantitative easing program could be tapered, the key US 10-year treasury yield jumped 46 basis points in May, the largest one-month rise since December 2010. European bond yields have benefited from contraction caused in no small part by Japanese investors searching for yield after the Bank of Japan implemented its extraordinary new monetary easing program.

The central banks of the three largest developed economies - the Fed, ECB, and BOJ - continue to pour on the stimulus to the extent that their policies appear to have generated an artificial Goldilocks market for the "new normal" economy, an environment with little inflation and middling growth. Inflation has not reared its head to spoil the stimulus party (indeed Japan's entire focus is on breaking out of deflation) and economic growth has improved to respectable levels in the US and Japan, yet there is no threat that global growth will edge toward overheating while Europe's economic picture remains stagnant. In the last few months the thesis became that bad news is good news, as it implies the quantitative easing will continue for longer, while good news means that monetary policy is working. Its unclear how long this "Goldilocks" mentality can last, but the latter days of May showed some signs that it may be deteriorating.

2. Hot Market Review - Gold Bulls and Bears continue to Fight

From our friend Jim Wyckoff

Jim has an excellent daily newsletter where he reviews different markets, alerts you for potential trades and much more. Included is his great bi-weekly newsletter with charts and a little longer term outlook. We recommend checking out his website, educational CDROM, and services at www.jimwyckoff.com click on image below to enlarge

Technically, there is not much new this week in August gold futures. Bears still have the overall near-term technical advantage. Prices are in an eight-month-old downtrend on the daily bar chart. However, recent up-trending price action in gold suggests the beginnings of a big and bullish double-bottom reversal pattern forming on the daily bar chart. The gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at last week's high of $1,421.60. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week's low of $1,372.80.

3. Economic Calendar

Source: Moore Research Center, Inc.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.