from Jesse’s Café Américain:
“Their upward path
was dark and steep; the mists that they encountered, thick;
the silences, unbroken. But at last they’d
almost reached the upper world, but he afraid
that she might weaken and be lost again,
and longing so to see her, turned to look
back at his beloved. And then she quickly slipped away –
His arms stretching desperately
to clasp and to be clasped by her again, but finding
nothing there but insubstantial air.
And as she faded, Eurydice found no
fault in him. How could she reproach him,
except that he had loved her all too well.
One final, faint ‘goodbye,’ she whispered
weakly so it scarcely reached his ears– was all
she said. Then, back into the netherworld, she fell.”
Ovid, Metamorphoses: Orpheus and Eurydice
Stocks were rallying and gold and silver slumping today based on a much better than expected print in the ADP jobs report this morning.
I include the economic news below, and direct your attention to that ADP number, including the substantial downward revision taken on the prior month’s number— a bit more mixed than the headlines would suggest.
And then the Fed’s FOMC minutes were released in the afternoon and the markets sharply reversed. The minutes were a bit more hawkish than otherwise expected, with the central focus on the downsizing of the Fed’s substantial book, somewhere north of $4 trillion or so. This reduction in the balance sheet, which as you may recall gets rolled over every month, was not expected until 2018.
So in essence this suggestion that the Fed may start unwinding its holdings of US debt this year was the equivalent to the market of another interest rate increase in addition to those already factored in.
The violence of the change in trend can also be attributed to the position of the markets. Stocks are pushing up against some strong overhead resistance. When the Fed minutes were released they were pushing hard against it‐ and then lost their momentum on the news, falling as sharply as they had risen to go out near the lows.
The metals ended the day largely unchanged as the dollar gave up its gains. And those metals are also straining to break out of their sideways track and take out the overhead resistance, activating some fairly bullish chart formations with significant upside measuring objectives.
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