August 12, 2015 G-SHOCK (Gold, Stocks, Housing, Oil, Currencies, Key Rates)

Gold

Beijing’s surprise devaluation of the yuan on Tuesday and its continued actions Wednesday, including intervening to slow the pace of the decline of its currency has reignited the haven appeal of gold in the  short run. Gold cyclical strength usually starts from the end of July until the end of December thanks to demand from India holidays and Christmas. Over the medium term again I must reiterate that it is highly likely Gold will continue to make new lows most likely after December.

Stocks

It is almost a great buying opportunity for stocks.

Target for index before rebound

NASDAQ – 4900 (Suggested companies AAPL, GOOGL)

TSX – 13900 (Suggested companies SU, VRX)

DJIA - 17000 (Suggested companies WFC, AGN, IBM)

Oil

EIA Petroleum Status Report came in as follows lower than expectation and causing oil gains from earlier this week to give:

                                                                    Prior             Actual

Crude oil inventories (weekly change) -4.4 M barrels   -1.7 M barrels

Gasoline (weekly change)                  0.8 M barrels   -1.3 M barrels

Distillates (weekly change)                  0.7 M barrels    3.0 M barrels

Devaluation of the yuan continues to put downward pressure on oil and further downside is possible. 

Target oil price before rebound - 42.03

Currency

Yuan Falls to 4-year Low: The People’s Bank of China lowered the yuan’s daily fixing by 1.6% to 6.3306 on Wednesday, after Tuesday’s 1.9% cut. Spot renminbi in China fell to 6.45 per USD, its weakest since August 2011, while in the international markets it touched 6.59 per USD.

USD within 2015 till the end of 2016 should still be the stronger currency. Any lowering of the USD should be taken as an opportunity to add to your position.