SD Monday Outlook: The cartel may be ready to pounce, but they are having trouble on Monday morning…
Gold and silver are surging in the Monday morning session (silver up over 2.5%):
Crude has just breached $57 to the upside, and the dollar is having trouble holding on:
Let’s not get too far ahead of ourselves however. We know what happened after the surge last Wednesday. Two days later, and, POW! The problem is open interest. As we said before, there are two ways to lower the number – short squeeze or price smash.
Nearly every single time the cartel is successful in the price smash operation, but every once in a while, price must rise, and we could be seeing that right now. If they are simply feeding the paper to the markets, which we don’t know just yet, then the level of open interest is just getting even more ridiculous. If they are short-covering, the level of open interest is coming down and therefore price is “allowed” to rise so the cartel can reload.
We shall see over the next couple of day which one has been the case, but with all the geo-political and domestic turmoil, the case is, as it has been for some time, quite bullish for rising prices of gold & silver.
This is a light week for the markets on the economic calendar.
NY Fed President Bill Dudley may be retiring, and the Fed may be actively looking for his replacement, but first, Dudley needs to hit the speaking circuit to do a little short-timer good ole-fashioned Fed jawboning:
Other than a couple sporadic data points in the first few days, we end the week about as melodramatic as we begin it:
The federal government observes Veteran’s Day this Friday, November 10th, 2017. That said the markets are open, but federal employees get the day off. Since the actual holiday falls on a Saturday, the federal holiday is not observed by the banks, so the banks stay open all week.
The point is we could be set up for a prime smashing this week and on Friday since there will not be federal employees day trading their personal accounts during their regularly scheduled work. That means we could see light volume to close the week, and by now, everybody should know that light volume is one of the key factors in the ability to smash.
Speaking of light volume:
After the Friday smash and overnight as trading opened on Sunday, silver has basically flat-lined.
Gold has done a little better:
But it’s still nothing to write home about.
The gold-to-silver ratio is right up on the 75.50 mark:
And the only bright spot, yet again, is palladium:
So we need to focus on support, because we are going to need it.
Silver needs to hold $16.60:
Open interest has barely budged at all last week. Silver needs to see the level of open interest come down. We were hopefull that was going to happen last week, but the cartel decided to just issue even more paper to contain price.
After the stellar gain on Wednesday, and blatant smash on Friday, the silver price looks like it is about to be strong-armed into submission. The volume overnight (Sunday) was weak, and as such, don’t be surprised to see a drop lower. That $16.60 line does not look to be tall that stout either. A major theme of the year has been just how little consolidation there has been in silver. It’s mostly been up or down, and since we have gone nowhere since last week, it would be safe to assume that silver is about to start moving. Granted, by all technical measures, not really in the direction we want.
The cartel is ready to pounce at any moment, let’s hope they’re too full to move, however.
Gold has its own line of contention:
That line is $1262. The significance of that price level is that it’s the 200-day moving average. A breach under that price level and gold is most likely going lower. The last time it happened, all it did was pierce the 200-day, and then a day or two lower we lost it. Gold is very close to that line now, and while last time we were hopeful the intra-day breach was a one-off, do-over type mulligan, this time, it’s wise to not be so optimistic.
Things could be looking bad for platinum in a hurry too:
There has been much more consolidation in platinum, but platinum is set up right at the point of putting in a lower-low.
Copper has been holding on and even had a busy night as the trading opened on Sunday night:
And we have been saying this for several weeks, but it bears repeating, because it is about to hit everybody in their wallets – Get ready to pay more for everything:
Crude oil broke through $56 last night. News coming from Saudi Arabia is perplexing and we’ll let the experts sort it out, but between the weekend “purge” and then the helicopter crash of high ranking Saudis, something is going on in petro-dollar land. Wouldn’t it be something to find out that some of the names either purged or dead from the crash were key players in the Saudi Arabia/Russia oil deals signed just last month? That is something that merits further investigation.
If this was the case, wouldn’t this create more incentive to speed up the death of the petro-dollar from a China/Russia point of view? Said differently, whatever happened over there in Saudi Arabia, if any part was Deep State/ US Petro-dollar motivated, it could end up being a policy error that weakens the dollar.
We’ll see if all this Saudi Arabia stuff matters when it comes to market “fear”:
The number of days the VIX has spent under 10 this year is a sight to be seen. Is there really so little uncertainty in this world?
Stock market seems to think so:
Even if it’s too hard to tell on the 10-year yield:
And the US dollar, well, we still have that 96 level as a target, but it’s about to be crunch time for all those dollar bulls out there:
So where do we stand for the week?
Well, it is becoming risky to go out for entertainment, and now, it’s even getting risky to go out to worship God. The level of complacency in the markets is at record highs, just as fear is at record lows. This week is starting off with low volume, and combined with an end to the week that federal employees are already looking for, well, the outlook is not good.
The cartel looks hungry and may just be ready to pounce.
But then again, powder kegs don’t blow gently. While it looks like the cartel is in control, all it takes is one single match.
– Half Dollar