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NFP Roulette Creates Only Minor Drama

Daily Rap 12-02-2022

Today's nonfarm payroll report was slightly better than expected, though by essentially just a rounding error of 50,000 more (in addition to an extra 20,000 last month). However, it was the lowest job creation number in over a year. So, it is not a sign of economic strength, though for everyone playing the relative headline game, it was obviously slightly stronger than expected (even if it probably won't alter anyone's thinking about the path that they already thought the economy was on, regardless of what their conclusions are).

It Could Have Been Worse In any event, the algos who pay attention to relative headlines immediately smashed the equity futures such that the Nasdaq 100 lost about 2.5% with the S&P down 2%-ish. However,...more

Last year's posts for Ask Fleck

Q: My deceased dad would have asked me: Did Silver and Golds reversal today happen on heavy volume indicating a lot of buyers and people covering shorts.
For us Newbies, can you tell us the best way to determine if todays reversal happened on "heavy volume" or whatever the appropriate word would be in the precious metals market.
and thanks for all that you do for us Newbies who really value your interpretations of the market.

Fleck: First of all, the volume doesn't tell you who did what unless you knew for sure that there were huge shorts. And even if you did, what does that really tell you? More volume often means more interest, and if it isn't all hot money that is good. Volume can look great and then lead to a reversal, so it is just one indicator. It has been constructive I'd say, but beyond that I'd be making it up.
(posted: 12/2/2022)

Q: Wesdome sure does have a way of shooting itself in the foot. It seems like every time they're about to get off the schneid they announce something that disappoints investors. Yesterday they announced an increase in their credit line to $150 million, leading one to believe they are in a good spot for future growth. 24 hours later they announce a $100 million "at the market" equity program, which creates the possibility for an unknown amount of dilution.

Were you disappointed with today's announcement and their ham-fisted communications?

Fleck: All the prior problems really were not their fault. The LOC is not a problem either. The ATM though is a bad move, but not "unknown dilution," it is potentially $100M worth of shares, if they do it all, which they may or may not.
(posted: 12/2/2022)

Q: Hi Bill,

How can we best understand the difference in price between physical silver and the SLV ETF? It's more than a two point difference. I don't remember it being that high in the past. What I am lacking in understanding of the instrument.

Thank you

Fleck: Same as with gold, over time the drag of small management/storage fees has created that difference. But as a trading vehicle from here, it will track spot.
(posted: 12/2/2022)

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