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.

 

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.

Gold/Silver Update

Gold needs to hold above the October 6th low Sunday night, should it fail – I believe it will – we could see a deep retracement to the 1204s into year end.

Silver has a bearish divergence setting up on the cross and will – as always – trail Gold –  until Silver is the leader. The 15.50s should be hit.

***This is the Bear Trap prior to a return to $1362.50 breakout – which targets the 1401/1405 area – initially.

Aussie Dollar

Over the next 6 to 8 weeks the AUD is setting up for a very large run.

This will be extremely bullish for Silver as well, the correlation is holding up nicely.

Silver can easily fall back and will IF the AUD corrects heavily, but this is the place I will be buying SI Futures with both hands.

The time is approaching and it could arrive soon, but year end appears. to be the safest time frame.

Gold Update

AU traded its 50% short at 1278.3 – FR by 3

Au traded its 38% – 1268.5 to highs.

The -23% of the short lines up with the HWB @ 1272.9

Which way it breaks will be telling as the 1401/1405s are wide open – we may not head there until late this year or early next.

The 975s are open as well… we are range bound in a 48 year setup, it takes time to resolve these larger boundaries.

Dollar:Yen Strength does not equal Gold Weakness

I suggested several months ago the Dollar and Gold would become positively correlated at some point, whereby Gold ignores the relationship with the Yen ratio.

This may have well begun, then signs were there all this week, we’ll need to watch the 114.24 level for confirmation this flip has begun.

Crude Oil has moved to it’s 2017 Highs and front run them by one tick… Energy is becoming extremely intersting. API/EIA data shows the demand for energy Globally continues to grind higher as many areas within the complex begin to see a contraction in supplies.

The FED needs inflation, the genesis of real tangible price inflation can be created from energy price increases. I’ve noted this strategy for quite some time, it does appear to be in play as money velocity looks to be turning.

Last night move in the indices was a stop run, today we’ll see how funds position and If we will be up 1% or more as new money pours in at the beginning of the month.

New Highs at the open of November suggests the possibility of much higher highs into year end.

We have the potential to go vertical in Price(s).

Now the 2615s open for the ES and 23,730 for the Ym… these levels will indicate whether we run right to 3,000 on the S&P and 28,420 on the DOW.

 

Crude heading to 54.62s

Nice day for CL Longs – a large move to upside. With the Cross on the Daily there will room for a pullback, but then it should find a fair amount of new money entering the Complex.

Energy will be the big winner in 2018.

We are getting close to a ST high for the Indices, a minor pullback should do the trick in correcting most of the overbought condition.

Gold / Silver remain hostage to Bonds now… with the 10yr spiking, it’s going to get interesting.

2018 will be the Metals year, I expect we see a move up again shortly. The 6e is on it’s way to our 108 target, a solid short on the Euro completed the H&S and continues to drop – 113s next after a minor retrace.

FED Monday… December’s rate hike flattens the curve ever more so… it’s going to slowly chip away at confidence in the Bond Markets Globally and force Equity inflows… it’s certainly not going to asset the other Capital Stock – Real Estate.

of the 3 bundles – Equities remain the most viable as insanely overvalued as they are… Dow 36K+ looks like a lock.

YM Line in the Sand @ 23,274 – weekly bearish @ 23,084

We should begin to correct into November, targets range down to 20,1xx to multiple Gap Fills Below on the Daily.

Crude Oil inventories will be a market mover as the API numbers supported the Bullish case – Unfortunately as much as the FED wants inflation and the Saudis want a higher price for AARAMCO… we’ll need to watch it carefully as it can go either way – seasonally this is normally a very weak period – geopolitical events factor heavily into price.

Gold & Silver are struggling to hold their lines. The DX is gaining momentum.

We typically dip into Draghi, we’ll see what comes out the other side as the Euro-Taper gains further support or default.