Gareth Soloway: Not Time for Gold to Move (Yet), Next Calls for Oil and Uranium | Summary and Q&A

TL;DR

Gareth Soloway discusses current market opportunities, including swing trading stocks, bullish trends in gold, potential pullback in the dollar, and his bearish outlook on Bitcoin.

Key Insights

• 💰 The dollar may have reached a near-term top, potentially leading to a pullback in the dollar and providing a bounce in the stock market and cryptocurrencies.
• ☠️ The upcoming CPI data is crucial in understanding inflation levels and guiding the Fed's rate decision. High inflation may require a larger rate hike, while lower inflation could result in a milder hike.
• 🤑 The potential challenges the Fed may face in stimulating the economy during a recession without the ability to print more money due to lingering inflation concerns.
• 🍉 Oil prices are expected to decline further due to global economic slowdown and reduced demand, although short-term trades are still possible.
• 🏅 The mining sector, particularly gold miners, has been affected by inflation and increased costs, leading to their underperformance despite steady gold prices. However, a potential reduction in supply may lead to long-term bullish trends in gold.
• 🙈 The Ethereum merge, which reduces energy consumption and changes mining methods, is seen as a positive development for Ethereum and may attract more investors.
• 😘 The overall stock market may have put in its highs for many years to come, with the potential for new lows in 2022. Emerging markets like China and Brazil may present better investment opportunities.

Transcript

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Questions & Answers

Q: Is the strength of the dollar expected to continue in the near future?

According to Soloway, the dollar may have reached a near-term top, as indicated by the recent trendline hit in the USD/JPY chart. He expects a potential pullback in the dollar, which could provide some relief for the stock market and cryptocurrencies.

Q: How significant is the upcoming CPI data, and what impact will it have on the Federal Reserve's rate decision?

The CPI data is crucial for the Fed's rate decision, as it signals inflation levels and guides their next steps. If inflation remains high, it may indicate the need for a 75 basis point rate hike, whereas lower inflation could lead to a milder 50 basis point hike in the September meeting.

Q: When do we officially declare a recession, and what signs should we look for?

Soloway mentions that the recent negative GDP growth and potential job losses may indicate the start of a recession. If we see another quarter of negative GDP and job losses, it could confirm that we are in a recessionary period.

Q: How does the reduction of the Fed's balance sheet factor into the rate decision?

Soloway suggests that the reduction in the Fed's balance sheet could act as a tightening measure, potentially reducing the need for a larger rate hike. This could lead to a 50 basis point hike instead of the previously speculated 75 basis point hike.

Summary & Key Takeaways

• Soloway highlights the potential for swing trading and day trading opportunities in the stock market due to recent market volatility, with opportunities arising from market rallies and pullbacks.

• He suggests that gold is starting to look interesting, as it is holding support levels, and discusses the impact of the dollar and 10-year yield on the stock market and other risk assets.

• Soloway emphasizes the significance of the upcoming Consumer Price Index (CPI) data and its impact on the Federal Reserve's rate decision and potential future inflation levels.

• He discusses the potential challenges the Fed may face in stimulating the economy if inflation remains high, and the possible consequences of a recession without the Fed's assistance.