Gold is Breaking Out. Bonds Too. USD/Yen Breaking Down

10/23/2018 10:22 am EST

Focus: FOREX

Robert Savage

Partner & CEO, CCTrack Solutions

The breakdown in equities globally is the news. Price beats any other headline. The good news is that Europe has tempered its selling. The bad news is that the MSCI Asia Pacific Index is dancing on a bear market, writes Bob Savage Tuesday. Bob is presenting at Crypto Intelligence TradersExpo Las Vegas Nov. 14.

The get out of any position that has risk view of things dominates. Gold is breaking out, Bonds are breaking out, U.S. dollar/Japanese yen (USD/JPY) is breaking down.

We are down and out for many risk positions and the moment most savvy traders want is one of capitulation. Let me know when the last weak hand sells, and we buy the dip – or so that has been the way of the tape for the last five years – but many want to believe this time is different.

What seems to be driving the blame for today’s selling? China growth doubts, EU/Italy budget fears, U.S. trade policy and midterm elections, Saudi and the Khashoggi murder, Brexit, Russia and its role in foreign affairs, and the central banks led by the FOMC that seem bent on normalization at the expense of financial stability.

None of the list of worries above is new or not priced into the markets, but the combination does make for a convenient wall of worry despite the best efforts of the Chinese to goose its market, the BOC to perhaps be gentler in its meeting today or the U.S. trade policy to find deals with EU or even China. Markets know all but are amoral and as such they are shaking the trees that grow to the sky for the loose change of complacent positions.

Gold is the glittering winner and one to use today as we all try to figure out if we should join in on the selling or try and catch the bottom.

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