Archive

2023

Browsing

The U.S. military has shot down the Chinese spy balloon over the Atlantic Ocean.

While the balloon was off the coast of South Carolina, it was shot down by U.S. military fighter jets on Saturday afternoon, according to Fox News sources. A senior U.S. military official said that an F-22 was used to bring down the balloon at 58,000 feet, adding that a single A9X missile was fired.

A senior defense official said during a Thursday afternoon briefing that the U.S. government is ‘confident’ the surveillance balloon is from the People’s Republic of China. 

When asked about the balloon on Saturday by a reporter, Biden said, ‘We’re going to take care of it.’ 

A senior U.S. official told Fox News on Saturday that the government was considering a plan to shoot the balloon down while it’s over the Atlantic Ocean, where it wouldn’t harm any individuals on the ground. 

The official added that the U.S. government could potentially recover the balloon.

During the briefing on Thursday, the defense official said that the balloon had been previously spotted over Montana, where a decision was made to not shoot it down because of the potential risks.

Secretary of Defense Lloyd J. Austin, III said in a statement after the balloon was shot down that ‘President Biden gave his authorization to take down the surveillance balloon as soon as the mission could be accomplished without undue risk to American lives under the balloon’s path.’

Video

‘After careful analysis, U.S. military commanders had determined downing the balloon while over land posed an undue risk to people across a wide area due to the size and altitude of the balloon and its surveillance payload. In accordance with the President’s direction, the Department of Defense developed options to take down the balloon safely over our territorial waters, while closely monitoring its path and intelligence collection activities,’ Austin said.

‘This action was taken in coordination, and with the full support, of the Canadian government. And we thank Canada for its contribution to tracking and analysis of the balloon through NORAD as it transited North America. Today’s deliberate and lawful action demonstrates that President Biden and his national security team will always put the safety and security of the American people first while responding effectively to the PRC’s unacceptable violation of our sovereignty,’ he added.

When President Biden was briefed on the situation, he asked for military options, the official said.

‘You did see reports yesterday of a ground stop at Billings Airport and the mobilization of a number of assets, including F-22,’ the official said. ‘The context for that was that we put some things on station in the event that a decision was made to bring this down while it was over Montana.’

Responding to defense officials, a spokesperson for the Chinese Foreign Ministry said Friday the balloon is a ‘civilian airship’ being used for meteorological purposes and deviated from its planned course.

‘The airship is from China. It is a civilian airship used for research, mainly meteorological, purposes,’ the spokesperson said. ‘Affected by the Westerlies and with limited self-steering capability, the airship deviated far from its planned course.’

However, the Pentagon doesn’t believe that this was a weather balloon that simply veered off course.

‘This was intentional,’ a senior U.S. official said, adding that the balloon initially took off from mainland China.

U.S. Secretary of State Antony Blinken canceled a scheduled trip to China as a result of the surveillance balloon.

Director of the CCP Central Foreign Affairs Office Wang Yi said that China ‘has always strictly followed international law, we do not accept any groundless speculation and hype. Faced with unexpected situations, both parties need to keep calm, communicate in a timely manner, avoid misjudgments and manage differences.’

‘Some politicians and media in the US have hyped it up to attack and smear China. The Chinese side is firmly opposed to that,’ a Chinese official said.

This post appeared first on FOX NEWS

President Joe Biden said shortly after the U.S. military shot down a Chinese spy balloon that he gave the order to shoot it down on Wednesday but that military officials waited until Saturday to do so.

‘I ordered the Pentagon to shoot it down on Wednesday as soon as possible,’ Biden told reporters on Saturday. ‘They decided without doing any damage to people on the ground they decided that the best time to do that was when it got over water outside within a 12 mile limit.’

‘They successfully took it down and I want to compliment our aviators who did it and we’ll have more to report on a little later.’

Biden added, ‘I told them to shoot it down on Wednesday. They said to me let’s wait for the safest place to do it.’

Secretary of Defense Lloyd Austin also acknowledged that the order was given to the military on Wednesday and that the military decided to wait. 

‘On Wednesday, President Biden gave his authorization to take down the surveillance balloon as soon as the mission could be accomplished without undue risk to American lives under the balloon’s path,’ Lloyd said.

‘After careful analysis, U.S. military commanders had determined downing the balloon while over land posed an undue risk to people across a wide area due to the size and altitude of the balloon and its surveillance payload’

Biden has faced intense scrutiny from Republicans, including former President Donald Trump, for waiting days to shoot down the balloon as it hovered across sensitive military locations across the United States.

Fox News Digital confirmed on Saturday afternoon that the Chinese balloon was shot down off the coast of South Carolina after the FAA issued a ground stop for flights at three airports across North and South Carolina.

The White House did not immediately respond to a request for comment from Fox News Digital.

Fox News’ Jennifer Griffin contributed to this report.

This post appeared first on FOX NEWS

Senate Majority Leader Chuck Schumer, D-N.Y., offered praise for the Biden administration’s decision to shoot down a Chinese spy balloon that had hovered over several states in the last two days.

‘I strongly condemn President Xi’s brazen incursion into American airspace, and I commend President Biden’s leadership in taking down the Chinese balloon over water to ensure safety for all Americans,’ Schumer wrote in a tweet, following the U.S. military’s removal of the balloon over the Atlantic Ocean.

‘Now we can collect the equipment and analyze the technology used by the CCP,’ Schumer added.

Schumer, who has been largely silent on the Chinese spy balloon since it entered American airspace earlier this week, offered his comments after the U.S. military shot down the Chinese spy balloon from airspace just off the coast of South Carolina.

The balloon, which made its way across North Carolina and South Carolina Satruday morning, was shot down by U.S. military fighter jets on Saturday afternoon, according to Fox News sources.

A senior defense official said during a Thursday afternoon briefing that the U.S. government is ‘confident’ the surveillance balloon is from the People’s Republic of China.

President Biden said after the operation that he gave authorization on Wednesday to shoot down the balloon ‘as soon as possible,’ and the Pentagon chose to wait to shoot it down until it was over the ocean.

Several Republican lawmakers and governors have criticized the Biden administration for its lack of communication on the issue and for not shooting the balloon out of American airspace while it hovered over sparsely populated areas of the country.

‘What the Pentagon has said was we didn’t want to shoot it down because of the chances of civilian casualties. This is a balloon that didn’t get here overnight. It was over the Aleutian chain, which is one of the most sparsely populated places on the planet,’ Rep. Ryan Zinke, R-Mont., told Fox News Digital on Friday.

‘We have received zero communication from the Biden Administration regarding reports of the suspected Chinese spy balloon now flying over Missouri,’ Missouri Gov. Mike Parson wrote in a tweet on Friday. ‘We have heard no explanation or plan to remove it. Why has this been allowed to reach our heartland? Why has it not been eliminated?’

Video

Similarly, Montana Gov. Greg Gianforte, during a Saturday morning appearance on ‘Fox and Friends Weekend,’ blasted the Biden administration’s communication about the balloon.

‘We’re informed through our national guard,’ Gianforte said. ‘We knew nothing about this until this slow moving balloon was hundreds of miles into the state. It had already flown over military installations and it was over our most populous city in the state.’

Fox News’ Adam Sabes contributed to this report.

This post appeared first on FOX NEWS

Reactions from politicians and pundits poured in Saturday afternoon following confirmation that the United States shot down a Chinese spy balloon after it hovered over the country for several days.

President Biden said Saturday that he gave the order to shoot down the balloon on Wednesday but his military advisers decided to wait due to concerns over injuring people on the ground.

‘The Biden Administration owes the American people answers now,’ Republican Rep. Andrew Garbarino, a Member of the House Committee on Homeland Security, told Fox News Digital after the balloon was shot down. 

‘Not only was the Homeland Security Committee not informed of this CCP provocation before it broke on the news, but it has since come to light that officials were monitoring the balloon before it entered U.S. airspace and could have been shot down over the water before ever reaching our shores. This was the CCP testing their boundaries and President Biden failed in his response.’

Video

Rep. Russell Fry, R-S.C, said the balloon ‘fell right above my hometown and blasted the Biden administration for not acting earlier. 

‘Why was this allowed to go clear across the country for so many days? You know, you look at this, national security is one of the biggest things that any country can do. It is a core function of government,’ Fry said on Fox News Live.

Sen. Susan Collins, R-Maine, a member of the intelligence committee, echoed Fry’s sentiment, saying the balloon ‘should have been taken out earlier, over remote areas of Alaska or Montana.’ 

Mississippi Republican Sen. Roger Wicker, who is the Senate Armed Services Committee ranking member, said in a statement that the Biden administration’s response to the balloon is a ‘disastrous projection of weakness.’ 

Video

‘It is clear that standard protocol for defense of U.S. airspace was ignored. If press reports are correct, the Biden Administration hoped to hide this incident from the American people from the start. The White House owes Congress and the American people answers about this failure, and I intend to get those answers without delay,’ Wicker said. 

Sen. Lindsey Graham, R-S.C., added that it amounts to ‘negligence’ if the U.S. is unable to recover information from the balloon due to the decision to wait until it was over the ocean. Nevertheless, Graham said the eventual decision to take it down was a ‘sound decision.’ 

‘I’m glad we shot it down…I’m open minded to hear our explanation,’ Graham added. 

In a statement to Fox News Digital, Republican Rep. Elise Stefanik said that President Biden ‘abysmally failed’ a test on the world stage.

‘The Chinese Communist spy balloon should never have been allowed to cross into our sovereign nation gathering intelligence,’ Stefanik said. ‘The American people deserve to know why Joe Biden allowed this national security threat for so long, why he tried to hide it from the American people, and what information our foreign adversaries were gathering.’

‘This is a time for peace through strength, and the Chinese Communist Party must know violations of American airspace will not be tolerated.’ 

‘U.S. Military: 1 Chinese Spy Balloon: 0,’ the House Judiciary Committee tweeted.

Former Acting Director of National Intelligence under former President Donald Trump Rick Grenell tweeted his criticism, saying, Biden ‘allowed the Chinese to collect data on Americans for more than a week – and only shot the balloon down AFTER the public found out.’ 

‘The reason? Radical elements of the Democrat party didn’t want to upset the Chinese while negotiating a climate change statement,’ Grenell wrote. 

Democrats in Congress struck a much different tone from many Republicans. 

‘I strongly condemn President Xi’s brazen incursion into American airspace, and I commend President Biden’s leadership in taking down the Chinese balloon over water to ensure safety for all Americans,’ Senate Majority Leader Chuck Schumer tweeted. ‘Now we can collect the equipment and analyze the technology used by the CCP.’

‘It’s down folks!’ Democratic Congresswoman Ilhan Omar tweeted along with video of the falling balloon.

Video

Fox News’ Chad Pergram contributed to this report.

This post appeared first on FOX NEWS

Both Republicans and Democrats are criticizing the Democratic National Committee (DNC) after it voted Saturday to make drastic changes to its presidential nominating calendar for the 2024 election cycle.

The vote by the DNC’s nearly 500 voting members who had gathered for the party’s winter meeting was the final approval needed for President Biden’s proposal to move South Carolina to the lead position in the Democrats’ primary calendar. Under Biden’s plan, South Carolina would hold its primary on Feb. 3, 2024, with New Hampshire and Nevada holding theirs three days later, followed by Georgia on Feb. 13 and Michigan two weeks later.

The move by the committee’s voting members, which faced bipartisan scrutiny from lawmakers before the vote was held, bumped Iowa and New Hampshire from their longtime leadoff positions and gave additional representation at the top of the schedule to Black and Hispanic voters.

Republican National Committee (RNC) chairwoman Ronna McDaniel said in a statement that the DNC has decided to ’cause chaos’ by making the calendar change.

‘The RNC unanimously passed its rules over a year ago and solidified the traditional nominating process the American people know and understand,’ McDaniel said. ‘The DNC has decided to break a half-century precedent and cause chaos by altering their primary process, and ultimately abandoning millions of Americans in Iowa and New Hampshire.’

‘Our First in the Nation Primary makes our entire country & democracy stronger,’ Democratic Sen. Maggie Hassan wrote in response to the news in a tweet. ‘Regardless of the DNC vote, New Hampshire will go first.’

‘The DNC’s primary proposal asks us to violate our state law & puts Democrats’ future success in our state at risk — it is deeply misguided,’ added Hassan, who was recently re-elected to another six-year term in the upper chamber.

Iowa GOP Sen. Chuck Grassley also offered a response to move, saying the DNC ‘pulled the rug out’ from Iowa Democrats by forcing the party to hold caucuses on a different day than the GOP in the state.

‘[The] DNC officially pulled rug out [from] Iowa Democrats by revoking first in the nation status,’ Grassley said on social media. ‘The Iowa caucuses were a decades long tradition of BIPARTISANSHIP. It’s sad Dems don’t value the voice of rural America … Fortunately Republicans will continue [to] carry [first] in the nation mantle.’

Longtime New Hampshire Democratic Party chair Ray Buckley, on the eve of the vote, called the move by the DNC ‘mind-boggling’ and a ‘self-inflicted wound’ that would hurt the chances of Democratic candidates in 2024 in the key northeastern general election battleground state.

‘We remain extremely concerned about the effects this calendar will have on our purple, crucial battleground state,’ Buckley said in a statement following the vote, warning that New Hampshire is a crucial battleground state in 2024. ‘We were proud to deliver our four Electoral College votes to President Biden in 2020. Next year, those four votes can be the difference between sending President Biden back to the White House or ceding it to Republicans,’ he said.

He promised to prioritize Biden’s re-election and retaking the New Hampshire governorship in 2024 but said that those ‘priorities . . . will be made infinitely harder by the DNC’s likely sanctions.’

In contrast to those who were upset with the news, Michigan Democrats, including state party chair Lavora Barnes and Rep. Debbie Dingell, expressed enthusiasm over the change.

‘Senator Carl Levin is smiling down on us today. This is the culmination of a journey he began over 30 years ago, and a torch that I have been proud to carry on because I have always believed that Michigan picks presidents and that all roads to the White House go through the heartland,’ Dingell said in a statement. ‘This primary calendar, which the DNC approved today, will establish a presidential nominating process that reflects the diversity of our country and ensures that we as Democrats showcase the issues that matter most in determining who wins in November.’

Similarly, Barnes concluded that the calendar change marks a ‘good day for Michigan and our entire nation.’

‘Throughout this process, we made the case that our state is a place that picks presidents,’ Barnes said. ‘With the DNC’s stamp of approval, our presidential nominating process will now reflect the diversity of our country and Michiganders’ voices will be heard. It has been a privilege to play a role, alongside Congresswoman Debbie Dingell, our other Congressional Leaders, the Governor, Lt. Governor, and the Michigan legislature who were all united behind Sen. Carl Levin’s dream of moving up Michigan. That dream is now set to become a reality.’

A New Hampshire DNC committee member has warned that the changes could hurt the party, and the president, as Republicans in the state have been ‘weaponizing’ the proposed calander to go after Democratic politicians.

‘We are frustrated, because as many times as we say it, no one seems to listen when we say that this will only hurt President Biden in our purple battleground state,’ said Joanne Dowdell, a New Hampshire committee member on the DNC’s Rules and Bylaws panel.

The decision by the committee marks a dramatic switch from the current calendar, which has seen the Iowa caucuses and New Hampshire primary lead off the process for five decades. But many Democrats for years have knocked both states as unrepresentative of the party as a whole, for being largely White with few major urban areas. Nevada and South Carolina, which in recent cycles have voted third and fourth in the calendar, are much more diverse than either Iowa or New Hampshire.

Republican Gov. Chris Sununu of New Hampshire, and state Republicans, have repeatedly slammed Biden and the DNC. Sununu has reiterated that ‘we’re going first, no matter what.’

The president and supporters of the plan argue that it would empower minority voters, whom Democrats have long relied on but have at times taken for granted.

‘This committee put together a calendar proposal that reflects our values and will strengthen our party. This calendar does what is long overdue. It expands the number of voices in the early window. And it elevates diverse communities that are at core of the Democratic Party,’ DNC chair Jaime Harrison said.

The new calendar ‘puts Black voters at the front of the process in South Carolina. It keeps Nevada, where Latinos have been building power by lifting their voices,’ Harrison said on Saturday.

‘Folks, the Democratic Party looks like America. And so does this proposal,’ he added.

Fox News Paul Steinhauser contributed to this report.

This post appeared first on FOX NEWS

The Biden administration is releasing details on how exactly the military effort to shoot down a Chinese spy balloon off the coast of South Carolina unfolded.

A senior military official said on Saturday that the Chinese spy balloon was shot down at 2:39 p.m. on Saturday by one air-to-air A9X sidewinder missile fired by an F-22 Raptor that took off from Langley Air Force Base in Virginia.

The aircraft fired the missile at an altitude of 58,000 feet while the balloon was hovering at an altitude of between 60,000 and 65,000 feet.

The balloon was shot down about six nautical miles off the coast off South Carolina and the debris field is said to be roughly seven miles wide.

The depth of the water where the debris from the balloon hit the ocean is approximately 47 feet, officials said.

The timeline on recovering the balloon from the Atlantic Ocean is unknown and a Navy salvage vessel is expected to be on the scene in a couple of days.

The defense official said that the U.S. military was able to gather intelligence information on the balloon as it flew across the country.

‘I can’t go into more detail, but we were able to study and scrutinize the balloon and its equipment, which has been valuable as Chinese officials have themselves acknowledged,’ the defense official said. 

The defense official confirmed President Biden’s Saturday comment that the military was given his permission to shoot the balloon down on Wednesday but military officials waited due to safety concerns for people on the ground.

The defense official said that Saturday afternoon ‘was the first available opportunity to successfully bring down their surveillance balloon in a way that would not pose a threat to the safety of Americans, which are military assets.’

President Biden has received scrutiny from Republicans on Capitol Hill for not shooting down the balloon sooner as it flew over several military facilities that could have potentially provided China with intelligence information.

This post appeared first on FOX NEWS

Rep. Don Beyer, D-Va., said Saturday that Republicans ‘can stop panicking’ after the Chinese spy balloon that had traversed across American airspace for several days was shot down by the U.S. military.

‘Great news for my Republican colleagues, they can stop panicking about a balloon now,’ Beyer wrote in a tweet, shortly after Biden gave brief remarks to the press about the mission to remove the Chinese aircraft from the sky.

Beyer’s comments came shortly after the Chinese spy balloon was removed from airspace just off the coast of South Carolina.

The balloon, which made its way across North Carolina and South Carolina Saturday morning, was shot down by a U.S. military F-22 using a heat-seeking missile on Saturday afternoon.

Beyer faced scandal last year after an investigation concluded that an aide in his office had been working on behalf of the Chinese Embassy to set up meetings with congressional offices. An investigation conducted by the House Sergeant-at-Arms discovered the allegations against the aide, identified as Barbara Hamlett, and she was subsequently terminated in October.

Beyer ‘was totally unaware of these activities,’ the congressman’s Deputy Chief of Staff Aaron Fritschner said at the time. ‘As soon as he learned of them, he followed every directive he was given by security officials. The staffer in question is no longer employed by the office of Congressman Beyer.’

President Biden said after the Saturday operation that he gave authorization on Wednesday to shoot down the balloon ‘as soon as possible,’ and the Pentagon chose to wait to shoot it down until it was over the ocean.

‘They successfully took it down and I want to compliment our aviators who did it and we’ll have more to report on a little later,’ Biden added.

Secretary of Defense Lloyd Austin also acknowledged that the order was given to the military on Wednesday and that the Defense Department decided to wait.

Video

‘On Wednesday, President Biden gave his authorization to take down the surveillance balloon as soon as the mission could be accomplished without undue risk to American lives under the balloon’s path,’ Lloyd said.

Several Republican lawmakers and governors have criticized the Biden administration for its lack of communication on the issue and for a delay in shooting the balloon out of American airspace while it hovered over sparsely populated areas of the country.

Fox News’ Andrew Mark Miller and Landon Mion contributed to this article.

This post appeared first on FOX NEWS

FIRST ON FOX: Congressional Republicans ripped into President Biden after the Chinese spy balloon was shot down on Saturday, with one saying our ‘enemies used to fear us.’

Several Republicans in both chambers of Congress weighed in on Biden shooting down the balloon off the coast of South Carolina after it flew across the U.S. over several days.

The downing came after public outcry about the balloon, which hovered over several states including Montana and the Palmetto State.

Texas Republican Rep. Pete Sessions said he believes ‘it’s very clear that, because commonsense Americans were overwhelmingly disgusted with not only the administration’s responses to questions, they were horrified that we have a president who would allow Chinese spyware to be on top of our country for days at a time and seemingly to do nothing.’

‘So I applaud the American people, normal American citizens who expressed outrage,’ Sessions told Fox News Digital in an exclusive Saturday phone interview. ‘That, that is why this happened.’

Sessions also blasted the Biden administration, saying they are ‘slow to recognize dangers against American sovereignty and even slower to defend our borders or the things which we pride ourselves most in, and that is the ability we have to protect ourselves with the world’s greatest military.’

‘And in this case, President Biden and the administration have made too close to friends with the Chinese that they were influenced to do nothing,’ Sessions said.

‘Thank God that the American people voiced their opinion,’ he added.

Senator Josh Hawley, R-Mo., told Fox News Digital the Saturday shoot-down ‘was just another display of incompetence and weakness from Joe Biden.’

‘He should have shot down the Chinese spy balloon before it entered US airspace or as soon as it did – not after it spent days collecting data over the United States,’ Hawley said. ‘We need an investigation into how this was allowed to happen.’

Rep. Troy Nehls, R-Texas, excoriated Biden in a Saturday statement, telling Fox News Digital that our ‘enemies used to fear us.’

‘The Chinese spy balloon traveled across our country,’ Nehls said. ‘President Biden failed America and showed weakness in the face of the Chinese Communist Party.’

‘Our enemies used to fear us; what will they think now?’ he continued. ‘This wouldn’t have been a problem under President Trump.’

House Majority Whip Tom Emmer, R-Minn., told Fox News Digital TKTK.

House Republican Conference chairwoman Elise Stefanik of New York told Fox News Digital ‘Joe Biden was tested on the world stage and abysmally failed.’

‘The Chinese Communist spy balloon should never have been allowed to cross into our sovereign nation gathering intelligence,’ Stefanik said. ‘The American people deserve to know why Joe Biden allowed this national security threat for so long, why he tried to hide it from the American people, and what information our foreign adversaries were gathering.’

‘This is a time for peace through strength, and the Chinese Communist Party must know violations of American airspace will not be tolerated,’ she added.

Rep. David Kustoff, R-Tenn., praised the military for safely taking down the balloon and called for an investigation into China’s actions.

‘I commend the United States Military for safely shooting down the Chinese surveillance balloon over the Atlantic Ocean today. The surveillance balloon should have never been allowed to enter the United States,’ Kustoff said.

‘The question is why did the Biden Administration allow the spy balloon to encroach our airspace? Republicans and Democrats need to fully investigate these aggressive actions by China,’ he continued.

GOP Senator Marsha Blackburn of Tennessee suggested the possibility of a Hunter Biden connection to the delay in bringing down the Chinese spy balloon.

‘Almost 48 hours after public discovery, the Chinese spying balloon has been shot down,’ Blackburn said. ‘It makes you wonder, would Biden’s Department of Defense have shot it down if the American people hadn’t found out?’

‘Was Biden concerned with upsetting his friends and Hunter’s business partners over in China when assessing the Chinese spy balloon?’ she continued.

Rep. Nicole Malliotakis, R-N.Y., also went after the president for doing ‘nothing about’ the Chinese spy balloon flying over the nation.

‘Communist China’s surveillance balloon violated international law and threatened our homeland,’ Malliotakis said. ‘It’s an outrage that the Biden Administration spotted this balloon days ago as it was flying over the Aleutian Islands and did nothing about it.’

‘The President has not even made a comment about this unacceptable act of aggression by the CCP,’ the New York Republican continued. ‘Whether it’s our border or air space, Congress must take action to protect it, because it’s clear this President won’t.’

Democrats’ sang a different tune in reaction to the shoot-down, with Connecticut Senator Chris Murphy quipping, ‘See. All better, bed wetters.’

The lawmakers’ reactions came as other politicians and pundits poured in Saturday afternoon following confirmation that the United States shot down the balloon.

President Biden said Saturday that he gave the order to shoot down the balloon on Wednesday but his military advisers decided to wait due to concerns over injuring people on the ground.

‘The Biden Administration owes the American people answers now,’ Republican Rep. Andrew Garbarino, a Member of the House Committee on Homeland Security, told Fox News Digital after the balloon was shot down.

Fox News Digital’s Andrew Mark Miller contributed reporting.

This post appeared first on FOX NEWS

Last week, I wrote about how the Price Oscillator for gold futures had gotten up to a really high level and turned down, which was a bearish signal. It has taken a while for that signal to come to fruition, and gold prices even threw us a great head-fake just to see who could be fooled. But the signal’s payoff finally arrived on Feb. 3, 2023, thanks to a strong employment report.

This week’s chart shows just the daily price bars for gold with one indicator, the Price Oscillator Unchanged line. This represents the price level at which a hypothetical close would make the Price Oscillator (as discussed last week) be exactly at the same level as the day before. So a close above that line means the Price Oscillator will rise, while a close below it means that the Price Oscillator falls.

We first saw a close below that line back on Jan. 26, 2023, but that signal did not immediately lead to prices starting to fall. Gold prices have been stuck in a very tight trading range, at around the 1945 level, based on April gold futures. Gold prices would wander around some intraday, but always seemed to find their way back to that same level at settlement time.

This stability first started to weaken with the FOMC meeting reaction starting on Feb. 1, 2023, which saw gold prices jump higher. This helps illustrate an important principle of price behavior. When prices get extremely stable as gold prices did, the natural inclination is for the prices to seek to restore the normal level of instability. So, like a spinning top that slows and will eventually fall over, the first sign of instability is a “wobble”. But the first wobble is not always the genuine one.

Gold prices wobbled higher out of that tight range of closing prices, but that was the fake-out move. Now with the Feb. 3, 2023 reaction to the jobs report numbers, we are seeing the true nature of the collapse out of stability, which was the big drop and the fulfillment of the signal of the Price Oscillator turning down a week prior. 

The important lesson to take from this is about the wobble, something that I addressed concerning the VIX Index back in 2014. It is tempting to see that first move out of a tight, stable range as a “breakout” which should be chased. But it can very well be just the misdirected wobble which pulls in the weak and eager traders, just so the market can laugh as it fools them.

As the week came to an end, the equity markets left behind a very eventful week. Two important events were expected to infuse volatility into the markets. The first one was the Union Budget; this event is one of the most major external domestic events that the markets react to. The other one was the Fed Rate hike that came in the late evening on the same day. The Fed, on the expected lines, raised the rates, but at a slower pace. Over the past five sessions, the NIFTY oscillated in a trading range of 618 points; this entire trading range was created on the day when the Union Budget was tabled in the parliament. On this day, the headline index oscillated violently by 300 points on either side. In the end, while ending on a much stronger-than-expected note, the NIFTY closed with a net gain of 249.70 points (+1.42%) on a weekly basis.

Following the release of the Hindenburg Report, the Adani Group stocks continued with their rout. Coming back to the core technical perspective, the NIFTY had violated the short-term 20-Week MA after taking support on it for five weeks. This 20-WMA is presently at 17912. Unless this point is taken out, it is likely to pose some resistance to the Index on a closing basis. Another important resistance point to watch out for is that of 100-DAY, MA which is presently at 17945. This makes the zone of 17900-17950 an immediate and important resistance area for the Nifty going ahead from here.

Despite such wild swings, volatility declined. INDIAVIX came off by 16.87% to 14.40. Over the coming week, the NIFTY has major resistance at 17950 and 18190 levels. The support would come in much lower at 17520 and 174360 levels. The trading range is expected to stay wider than usual.

The weekly RSI is 51.61; it continues to stay neutral and does not show any divergence against the price. The weekly MACD is bearish and remains below the signal line.

The pattern analysis of the weekly chart shows that inherently, the Index failed to stage a breakout above 18600; it marked its incremental high at 18887 following which it slipped below the breakout point. After that retracement, the NIFTY took support at 20-Week MA for five weeks and that support also got violated in the recent past. Technically speaking, this 20-DMA level at 17912 remains an important resistance point for the NIFTY followed by 100-Day MA on the daily charts at 17945. This has created a resistance zone of 17900-17950 for the Index.

With all major events out of the way, the markets are likely to continue to remain in a wide trading range. Unless the zone of 17900-19750 is taken out convincingly, we are unlikely to see any meaningful and sustainable uptrend here. It is strongly suggested despite the pullback that we witnessed from the lows of the week, one must not get carried away and continue to vigilantly protect the profits at higher levels unless NIFTY goes comfortably above 18000 levels. It is expected that pockets like IT, PSE, and select Auto stocks may do well besides some stock-specific performance coming in from the rest of the sectors. It is recommended to keep leveraged positions under control and overall exposures at modest levels. A cautious outlook is advised for the coming week.

Sector Analysis for the coming week

In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks listed

The analysis of Relative Rotation Graphs (RRG) leaves us with some interesting insights. After weeks of strong relative performance, the Nifty Metal and PSU bank indexes have rolled inside the weakening quadrant. The individual performance may still persist; however, these groups may start to relatively underperform the broader NIFTY 500 Index. The Oher sectors like Infrastructure, PSE, and Commodities are inside the leading quadrant but they are rapidly seen giving up on their relative momentum against the broader markets.

Importantly, the NIFTY IT and FMCG have rolled inside the leading quadrant. They are set to relatively outperform the markets.

The NIFTY Financial Services, Banknifty, and Services Sector Indexes are inside the weakening quadrant.

The Realty, Media, and Energy indexes continue to languish inside the lagging quadrant. Nifty Consumption Index is inside the lagging quadrant; however, it is seen sharply improving in its relative momentum.

The Pharma and Auto Index has rolled inside the improving quadrant. This marks a potential beginning of a phase of their relative outperformance against the broader markets.

Important Note: RRG™ charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals. 

Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae