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INTRA-DAY NEWSLETTER ~ Dec 11 2014
US Imports Most Deflation From Japan Since 2010
Submitted by Tyler Durden on 12/11/2014
Two months ago, when looking at the US Import Price Index (by origin), we showed Where The US Is Importing All The "Evil" Deflation From. The answer, courtesy of Abenomics, was simple: Japan. Earlier today we got further evidence that while the Fed is banging its head over how to halt America's deflationary spiral further away from the Fed's 2% target (at least as measured by the BLS), what it should do - if it really cares - is get on the phone with Abe and tell him to end Abenomics and Japan's unprecedented exporting of deflation (and importing of inflation).
Norway Central Bank, Slammed By Oil Plunge, Warns Of "Severe Downturn", Unexpectedly Cuts Rates
Submitted by Tyler Durden on 12/11/2014
New oil projects are being scrapped in Norway amid falling production and low oil prices. The governor of Norway’s central bank says western Europe’s biggest oil producer is facing a major economic slowdown as crude prices continue to plunge. As Bloomberg reports, Oeystein Olsen said today after unexpectedly cutting rates and shocking markets to a new 5 year low in NOKEUR, "our job now is that we need to prevent a severe downturn in the economy... that is presently the major concern of the board."
Greek Stocks Crash, Default Risk Spikes After PM GREXIT Comments
Submitted by Tyler Durden on 12/11/2014
Just 2 short months ago we noted S&P's warning that Greece will default again within 15 months and following comments by Prime Minister Samaras that the market's drop is due to fear that Syriza will win an early election and seek a Greek exit from the Euro. Pressuring parliamentarians and the public alike, he stated "the choice is simple," warning that Greek financing needs are only covered through the end of February without further aid from the EU (but we thought they were 'recovered'). Greek stocks have crashed further, Greek default risk has spiked, and 3Y bond yields are now well north of 10% (138bps inverted to 10Y).
Central-Bankers Have Their Hands Full As 30 Year Yield Falls Below 2014 Lows
Submitted by Tyler Durden on 12/11/2014
Not quite as many fireworks overnight, in another session dominated by central banks. First it was revealed that China had injected CNY400 billion into the banking system to add liquidity as the economy slows, which is ironic because on the other hand China is also seemingly doing everything in its power to crash its nascent stock market bubble mania, following the latest news that China’s CSRC approved 12 IPOs ahead of schedule which is seen as a pre-emptive step to tighten interbank liquidity amid the recent rise in margin trading. Another central bank that was busy overnight was Russia's, which proceeded with its 5th rate hike of the year, pushing the central rate up by 100 bps to 10.50% as expected. Elsewhere, the Bank of England wants to move to a Fed-style decision schedule and start releasing immediate minutes as Governor Mark Carney overhauls the framework set up more than 17 years ago. The Swiss National Bank predicted consumer prices will drop next year and said the risk of deflation has increased as it vowed to defend its cap on the franc. Finally Norway’s central bank cut its main interest rate for the first time in more than two years and signaled it may ease again next year as plunging oil prices threaten growth in western Europe’s biggest crude exporter.
(Above articles by www.zerohedge.com)
As long as we remain above the support lines on the chart, a rally to Dec 23rd (plus or minus 72 hours is in play in gold and silver.
Gold Chart
The upper red channel line is resistance and that should be considered the most important resistance near 1255. Support is the 1217-1222 area and this morning’s touch was right at the blue moving average, and two channel lines.
If we close below 1217, odds favor 1200-1208 is next. While it certainly isn’t out of the question for gold to explode higher in a panic, it certainly isn’t out of the question for gold to join Crude Oil and all other markets lower! Support is 1217-1222 and then 1200-1208. Resistance is 1234-1242 and then 1255. Silver is holding up well and that’s a plus. The short term trend remains bullish and we need a close below 1208 to go neutral. As long as we keep closing above the 1215-1222 area, the potential to rally into yearend remains in play. ANY NEW high above 1240 adds to the upside being favored.
 
Cycles
(Dec 6th – plus or minus 72 hours) is the trend change. What happens from here favors what should happen for the next two weeks. We either bottomed 2 days early and we’re heading higher to the 23rd or we are peaking now and heading lower. Resistance is now 1250-1260 and 1272. Support is 1199-1205. ANY CLOSE BELOW 1199 and we have to favor this was a peak in the short term cycle. Any close above Wednesday's high favors the short term cycle to go higher into the 23rd. The medium term cycle ideal week is the week of Dec 23rd. The standard deviation is 2.5 weeks.
Silver
Any new high after Thursday favors we’re in an uptrend until Dec 23rd (plus or minus 72 hours). Until then, we can’t just yet eliminate the downside. Support is the 1675-1685 area today and resistance is 1715-1730. ANY CLOSE BELOW 1590 negates the short term uptrend.
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