Think no one got advance notice of the Fed’s decision? Really? No one?
Discussed in this article: SPDR Gold Trust ( $GLD )
I want to get to gold ( NYSE:GLD ) and silver ( NYSE:SLV ) in just a second. This is the conspiracy theorist in me, proving the conspiracy. The market just screamed today when the Fed took no action. I want to go down to a 5-minute chart. You can see what happened. Right about 2 o’clock is when they announced that they were not going to be tapering at all.
Now what I’m looking at here is just the intraday dynamics. The way I’ve always looked at it, there are definitely scum bags on Wall Street, there are also some really wonderful people there too, I know, I know some of them, but the thing is, they all just want to make money and some of them are not really too shy about maybe bending things a bit.
So whenever I see that there’s a big announcement, the usual stuff that happens during market hours, typically Fed stuff; the Fed decision, the minutes to the Fed meeting, and this and that, Fed, Fed, Fed. All of that stuff is intraday and so I always like to look at the intraday chart and see what happens here.
So let’s look at the SPDRs ( NYSE:SPY ) You can see 2:05 is when we had the big spike. Now let’s go down to the minute chart, really zoom in here a bit. So this really started going when? Okay, 2 o’clock there was nothing happening and so then they announce and then immediately the S&P moves higher and starts screaming.
Let’s look at gold ( NYSE:GLD ) and silver ( NYSE:SLV ). Here’s when the S&P really took off, and by the way the other indexes as well. They all took off right about the same time, but gold ( NYSE:GLD ), it comes back here, we look back at to two minutes earlier and we see not only did this move higher, and you can say, “Oh well, it was moving higher anyway.” No, not so much. It was in a squeeze, little move here, but what I’m really interested in is this, two minutes before.
Let’s look at silver ( NYSE:SLV ) by the way, two minutes before here as well. Now, you might say, well you know the volume really started screaming here too. I would say this, back here at 1:58, look at the volume, 123,000 shares, 123,000 shares traded, by the way, the minute before you had a whopping 17,000 shares traded.
So basically let’s just say it was a pretty big increase. What does that translate in dollar terms? Over 15,000,000 being put to work right here, $15,000,000 being put to work two minutes before the Fed announces that they’re not going to do any tapering. So we got about $15,500,000 put to work right here two minutes before the Fed. Three minutes before the Fed they have like $2,000,000.
So the point is, if you think there’s nobody that gets early information, I beg to differ with you. But here’s the thing: even with this, maybe this is an SEC thing, though I doubt it, I think they have more important things to do.
What you really need to know is this, once you realized what was happening there was plenty of time to get on board here with gold ( NYSE:GLD ), or my favorite just for the retail guy, rather than buying gold ( NYSE:GLD ) buy IAU ( NYSE:IAU ), which is GLD ( NYSE:GLD ) divided by 10, its got plenty of liquidity and so once this starts moving you can hop on board.
I don’t think it’s too late by the way to buy gold ( NYSE:GLD ), I think it’s late, because that was kind of today’s move at about 1:58, but you can go ahead and put some gold ( NYSE:GLD ) in your portfolio now. As I see it this is a higher low, I think this is going to hold.
Now, you’ll hear a lot of gold bugs say, “Oh, well see this is the inflation thing, the Fed’s too loose on their monetary policy, gold ( NYSE:GLD ) is forecasting inflation. No it’s not; it’s just moving higher. Don’t attribute that to gold ( NYSE:GLD ), don’t ask it to do something that it’s really not doing. If that’s your stance gold ( NYSE:GLD ) has been forecasting inflation for long, long time.
Look to buy gold ( NYSE:GLD ), take it on any kind of weakness, anywhere down say 128.00, 129.00 here on this. Also, don’t believe that nobody gets early information because you can see it right there in the gold ( NYSE:GLD ) chart, not in the S&P’s, but on the gold ( NYSE:GLD ) and the silver ( NYSE:SLV ) chart, somebody had information a couple minutes early.