Higher Highs, Higher Lows – Wider Range

The ES/NQ/YM/TF continues to power higher.

Z1 Flow of Funds for Q3 stands at a staggering 134% of GDP – $26.35 Trillion.

Resistance for the YM is now 25,080 – from a range of 25-26K we should see a pullback in the broad indices. A 3- 5% correction, although touted heavily in the weekend Financial Media – would be a gift. Will it occur – seasonally it’s an easy spike to 25K for year end.

Conversely, a sell the news type of event surrounding the Fed’s decision on a December rate hike could provide the fuel for a retracement. Core PCE will have an impact, although it appears we will see an uptick as general price levels have risen during the period. A 1.5% PCE would provide all the cover needed ahead of the the 13th.

Gold/Silver are done for now, 1192 – 1202 remains the open target prior to the potential for a full HWB to the $975 level. Silver will continue to trail Gold. The DX is on the cusp of a very large rally. BOJ interventions are no longer tracked at the St. Louis Fed, nor is the BOJ communicating them on ┬ádaily or even weekly basis.

Dark Pools continue to dominate , Algo’s are playing whipsaws daily, intra-day volatilities continue to expand while the VIX remains managed.

It’s all blue sky – January should mark an interim low or high, the December close will provide direction. We should see resolution into March where a Summer rally takes us to Dow 32,000 – 42,200.

 

Crude Oil pullback to 55.95~ / Indices will depend on Data

Tomorrow is full of releases from 830AM EST onward.

Opec should have news 11AM EST

GOLD/SILVER remain broken

DX/YEN will provide Bonds, Metals & Currencies with direction.

Rate Hike backpeddling muted today, Yellen more concerned with “Balance” – until February.

Debt creates parabolic moves…

Bitcoins next target is 14,900$ after todays retracement.

BTC Futures will be 5x by $600 per coin or ~$3K per contract, no word on increments by tick as of yet.

 

Feds Increasingly Dovish

It’s a parade of backpedaling for the Federal ReserveBoard of Govenors – sounding Dovish in remarks outside of 33 Liberty.

A 92.8% chance of a rate hike remains.

The Fed is clearly offering some important qualifiers.

Gold / Silver remain, for now in the trend to 1400+, although it appears to be a large trap.

Dow is approaching 237xx, and ┬áthe ES 2609 – caution warranted at these levels as Tax Reform is beginning to wear on the Markets.

Crude Oil remains between two opposing moves – the 2013-2016 daily 38% off the top – the lower trend line of that downtrend & the upper channel of the trend of July 2017. Price of the opposing trends sit right above 58.

Consolidating at Highs

The past week followed in prior footsteps, declines were held mostly to the overnight session with one exception.

A close near the lows, which we have not seen since August.

*Of note:

Bonds began a very strong rally off their recent bottom.

DXY went on a teat, completing the 1299 target for Gold, Silver made strong move as well.

The indices are relying on the boost from Tax Reform which is a gift at the expense of taxpayer ($1.5 Trillion and counting) – the cost of which will be borne by the rest of us.

We’ll see how effectively it is promoted, one things is certain – IF/When the $3.5 Trillion offshore comes back home, the next leg up in the indices will be massive.

Crude Oil is completed a reversal, ahead of OPEC it now has it’s first overhead target in the 59s… The PetroYuan comes into play shortly.

 

Crude Breaks

YOY highs did not defend. Portends a great deal of ugliness dead ahead.

54.80s the absolute line in the sand, 620 bips of Air below. 55.90 the retrace potential.

2606 as unlikely as it seems remain the target unless we break 2560.

Gold is a Bull Trap.

Gazprom

I have my sell in at 5.00 – it may go rise higher – IF that occurs, I will buy the pullback.

In my opinion this is the cheapest energy play there is to accumulate, Oil should have a deep retracement – which should provide the final entry for Long after we complete the overhead targets.

At the moment CL is in an opposing measured move short, the entry into the trend is always challenging, 57.05 is the first entry & 57.17 is the second.

It will be interesting to see if the shorts defend, as we could easily see one more large spike prior to the selloff. The 60/62 level remains open for now although we would need to see the 58s trade.

Since CL not liftoff Friday as it had the prior 3 Fridays, it appear the opposing move was in play. I took that trade for 61 ticks.

The longs have been a gift as it was straight up, hold your nose and buy… this may have changed. The VZ Default has a direct impact on Goldman Sachs and yet… price reversed.

We should see increasing volatility in Crude Oil – timed properly with rules in force, it should provide immense profits.