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.

Crude Oil Production Up, Rig Count Up and a Build in Inventories

across Cushing and Gasoline… should see a pullback to 52.88s to 55.56 in the coming weeks.

SPR topped off and many Oil Companies on verge of bankruptcy.

Nothing to see, but Hedge Funds hanging fun now.

After an Historic October for Crude, we are hostage to geopolitical events – ie. Venezuela default.

Congratulations Goldman Sachs bag holders – surely there’s a bailout for that…

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.

 

Lines in the Sands

A ∑ Crudee Oil draw of 10.1M for the month of October 2017 – sans SPR draws – of which there was a cumulative draw throughout October.

This represents the second highest draw on record for an October – 11.1M in October 1990 after Iraq invaded Kuwait in August stands as the highest draw.

Prices more than doubled from the high at that time.

There have been 10 crude draws in the month of October over the last 36 years.

Since the inception of the Data there has never been a crude draw every week in October.

Crude Oil open this afternoon

Saudi Aramco’s tax rate was cut from 85% to 50% earlier this year, with a 20% royalty on revenues to incentivize investors for the future IPO.

The IMF has estimated a $70 break even price point to bring the Saudi budget into equilibrium.

“Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!”

NYSE Authorized this some time ago, but I can’t help but wonder who’s intelligence tipped off the Kingdom… US, Russia or Insiders… beginning to look like Season 3 of Tyrant.

Yemen appears to be adding fuel to the Rig Fires.