Last week there was talk of a more hawkish Federal Reserve after the FOMC release. On Tuesday, though, Jerome Powell testified to Congress and said he is not raising rates until unemployment drops even if inflation does not go away.
The long-term bond yields have dipped since the FOMC meeting, to signal that they don’t see a hawkish Fed. Meanwhile, the Fed Fund futures aren’t predicting an interest rate hike either. You have to go all the way out to the July of 2022 contract to see them see a possible one and they are pegging the odds at 46%, which is under 50%.
The thing is 46% isn’t good odds for a hike, because any dip in the stock market, even of just 10%, would reduce those odds to zero.
Meanwhile, I am still on a buy signal watch for gold and mining stocks with the GDX/GLD ratio on the hourly chart. Here is how it looks this morning.
For the ratio to give a buy signal today the GDX would have to rally and do so more than the price of gold on a percentage basis.
Both have been trading in a narrow range for the past few days.
On Tuesday I talked with David Skarica about the markets, including gold and Bitcoin. In case you missed it here is the video.
For more on my trading methods grab my book Strategic Stock Trading.