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.

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.

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.

 

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.

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.

 

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.