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.

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.

 

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.

Without the Banks: YM, ES & TF

Indices are unable to rally without TRANS, TRANSQ, NQBANK & XLF.

Strong selling has led to a 5%+ decline in NQBANK – persistent selling has driven it down hard.

All real action occurs during he overnight sessions, the Indices are stuck in a range between the short and long.

Longs are absent, Shorts want their fill… batter over the trend continues.

Where this leads is lower – until we have something concrete with Tax Reform this will continue.

All the promises made during and after the last election remain unfilled…

This is slowly sinking the ship and until it’s scuttled or righted – the Indices will be in a slow bleed with violent retracements on resulting short covering.

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.