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  daily 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  the 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.

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.

Markets Broke Longs

A great deal of work ahead to correct this.

Watching how resistance trades as every Long setup this week has failed.

I have the final weeks of November as an important tipping point. Crude Oil has it’s line in the sand near 56.15, Nat Gas has hit its target at the 3.22s.

Silver is failing now, we could easily test the 15s at this point.

Dollar/Yen and all currencies are completely manic, but highly technical.

Bonds have some work to do as protection went on and was squeezed, but nothing good came calling for the Bond Market.

Very dangerous times in the Broad Indices…

War in the Mid East seems to be approaching much more rapidly than anticipated, this is very worrisome and has yet to price into Global Markets.

The Federal Reserve clearly stood pat in defense today, Fridays are such low volume – it will be an important day for all markets.

Given what we witnessed today, it’s tough to buy the dip and many did not, the squeeze got us some back by days end.

Bias is negative, until we break the shorts and even then, the writing is on the wall.

 

Operandi

The BOE indicated their rate hike was due to “Energy Prices” – this while the UK’s CPI is running @ 3%.

Brent NS to WTIC spread widened again, nearing $7.

With the API on deck after the close today and EIA tomorrow, we’ll see how much gas is left in the rally tank.

The price action has been extremely rewarding, I suggested the Energy Complex would be a best performer awhile back. It has exceeded my expectations.

With Core PCE dragon its ass in the dirt @ 1.3%, the Fed is desperate to stoke the fires of inflation.

We’ll see how this week ends up, as there are even larger targets in the 58s ahead, a pullback would be normal… “aggressive bids” remains the understatement.

The ES, YM, and NQ keep grinding higher, TF has some catching up to do prior to any indication of a ST reversal.

Gold is behaving in as though it wants to test the 1300 level, perhaps falling just short at 1299.

 

Misc. Ramblings

An interesting week that needed observations, hence the lack of commentary.

Crude Oil goes straight up or not at all, the potential for a deep retracement is here, but will it. The FED, as observed many times, requires the Core PCE to rise back to 2%.

The best way to accomplish this is with Energy.

Brent is targeting the 63s, WTIC could reach the 58.44 target now open.

It’s going to very profitable on either side, watching it trade Sunday evening will provide a tell.

55.40 is the LIS.

The YM & ES are sold every morning, the lows are in by 10 and Ramp Capital shows up to run the indices back up the balance of the day with a small sell into the close.

It’s easy to spot the distribution – this occurs precisely at the same time every day – like clockwork.

23,660 appears to the the YM Target, 2620s for the ES… the ES isn’t playing along though… this week could be rough on the Indices. Participation is very low, volumes are weak on balance seasonally.

Buckle up – volatility should increase this week, dramatically so.

Russia and China are talking about linking currencies to end the US dollar’s dominance

BEIJING (Reuters) – Russia and China were considering linking their national payment system, Russian Prime Minister Dmitry Medvedev said on Wednesday, as he called for a more balanced global finance structure.

Noting the rise of China’s Unionpay system and Beijing’s efforts to internationalize its currency, the yuan, Medvedev told a press conference in Beijing that Russia was developing its own payment system, known as Karta Mir.

“At the present moment it is being discussed whether Karta Mir should be linked to Chinese payment systems,” he said, while standing alongside Chinese Premier Li Keqiang.

That would have “good prospects” and “avoid those problems that sometimes arise when you use American payment systems”, Medvedev said, mentioning Visa and Mastercard without elaborating.

Russia started to create the Karta Mir system after Western sanctions were imposed on the country in 2014, during the Ukraine crisis. The system is now widely accepted in Russia.

After new U.S. sanctions were imposed, Moscow promised to intensify work to cut dependence on Western payment systems further. Among other things, it wants to create more domestic financial services such as its own ratings agency.

“I think that the more financial instruments there are in the modern world, the more stable the global financial system will be,” Medvedev said.

Visa and MasterCard stopped providing services to clients of one Russian bank after Washington imposed sanctions over Moscow’s annexation of Crimea from Ukraine and support of pro-Russian separatists in eastern Ukraine.