Update: it only took 2 tests of the hourly trend line drawn last night for gold to break through and rally. In the redrawn chart below you can see the strong hourly trend line formation we collapsed through yesterday. This gave warning of another $23 extension lower. It still does unless we can get above the congestion coming in at the $1294.50 mark, circled below.
This chart is basis spot. There are 2 short term trades from here:
1- sell with a stop above $1294.50 based on your risk tolerance.
2- Buy on a penetration of $1294.50, especially late in the day, provided you can take it home with you overnight.
It is beginning to seem to us like a tug of war as late exiters throw in the towel for 2017 and early entry players in anticipation of 2018 allocations step in.
Remember, some funds end their year in November. Fresh money is beginning to flow, from our information. For our taste, we’d like to see a large short OI build up for some fireworks to happen. Otherwise, smart money that wants to buy is almost always rewarded by just waiting for the market to come to them, courtesy of bullion dealers and producer hedging. But it is starting to look like we are “almost there” as far as EOY longs exiting go.
Skb-
original post last night on Asian open:
- Gold will find renewed pressure under $1280 basis Feb futures.
- Washington criticizes Beijing over pace of economic liberalization
- Short sellers fuel China bond rout,
- OPEC in agreement on oil output.
Gold at (Hourly) Crossroads
Via Moor Analytics
Today saw more selling of gold with little cause coming from the USD. The tape and the players give credence to “end of year” puke-age from mid size funds likely to be buying in 4 weeks. As long as macro levels hold, dips are safe.
We left a short term bearish reversal above yesterday that warns of more pressure, likely for days. Only high volume trade back above $1294.50 will negate this.There is a rising trend line coming in at $1280 this evening that portends of a $23 selloff should we not get back above it quickly. If we do break back above for any legitimate length of time, look for short covering to come in to propel us back to that $1294.50 level.
Hourly Spot Chart
Right now, selling rallies before buying dips is the way to go if you are playing the day trading game. Sell as we approach the trend line with stop reversals above. The exception to this is a blowback through the rising trend line. Then decide your bias near the $1294.50 area
These remain the levels that matter for macro longs.
Simply put:
- SKG Fund Finder: Patient Long above the 12 month MA with a sell stop on a monthly settlement below $1245
- Moor Analytics: Traditional Analysis says a long bias is in order with the ability to swing trade in either direction as described in the levels below
- Echobay's VBS Macro: Explosive volatility on a move above $1338 or below $1192 in either direction. implying a $200 move in either direction if triggered
A Busy End of Week
Get ready for a slew of data releases to start December. Friday's highlights in Asia include CPI, trade and final third quarter GDP from South Korea, while CPI and capital spending data is due from Japan. There will be a a number of of manufacturing PMIs across Asia and Europe, and the U.S. ISM manufacturing indicator for November is forecast to weaken for a second month after spiking to a 13-year high in September. The U.S. day also brings some Fedspeak our way, with St. Louis Fed President James Bullard talking about the economic outlook at the Clinton Presidential Center in Little Rock, Arkansas, and Dallas Fed President Robert Kaplan due to address a Border Economic Development and Entrepreneurship Symposium in McAllen, Texas.
Washington Rebuke; Tillerson on the Hot Seat
The Trump administration called on other major economies to find a united response to China’s slowing embrace of market principles as the nation’s role in the global economy continues to rise. The rebuke, which was unusually strong, comes as the U.S. seeks help from Beijing in corralling North Korea’s nuclear-weapons program. The U.S. also joined the European Union in rejecting China’s claim that, under the terms of its accession to the World Trade Organization, it should have graduated last year to market-economy status, which would offer greater protection from anti-dumping duties. Separately, the White House is weighing a plan to replace Secretary of State Rex Tillerson with CIA Director Mike Pompeo, three administration officials said, amid frustration with the top diplomat’s slow pace of hiring and repeated policy disagreements with the President, including how hard to seek a diplomatic solution with North Korea.
Blame the Short Sellers
China’s biggest bond selloff in four years might be getting worse because of short sellers. There isn’t an official measure of short sales, but analysts are pointing to a rise in bond lending as a sign that bearish bets are on the rise. A record 1.82 trillion yuan ($274 billion) of notes has been lent out this year, 18 percent more than the total for all of last year. Short sellers profit from falling bond values by selling borrowed notes and buying them back after prices decline. A rise in inflation and an official attempt to pare back excessive borrowing has caused the debt market to struggle. The benchmark 10-year sovereign yield is set for the biggest annual increase in four years. While Chinese regulators have been known to clamp down on bearish wagers in the stock and currency markets, they haven’t taken any major measures to curb short-selling of bonds.
FANGs Make a Comeback
The pullback didn’t last very long for tech stocks. Thanks to a helping hand from Senator John McCain, whose backing of the Senate tax bill fueled a rally in U.S. equities across the board Thursday, the biggest technology stocks rebounded from their worst selloff in more than a year. The Dow Jones Industrial Average extended its climb past 24,000 after the statement of support from the Arizona Republican, while the S&P 500 was set for its longest monthly winning streak since 2007. Oil whipsawed traders after OPEC and Russia agreed to extend production cuts. The Stoxx Europe 600 slipped while the euro and pound strengthened as Brexit negotiators moved closer to a divorce agreement. Treasury yields rose, capping the least turbulent month for 10-year notes in almost four decades.
Speaking of Oil
Crude contracts fluctuated throughout the day as traders digested news that OPEC and its partners, including Russia, came together to extend oil-production cuts through the end of next year, with Libya and Nigeria included for the first time. Iraq’s oil minister, Jabbar al-Luaibi confirmed the decision after a day of talks that took place in Vienna and reflected a rare consensus between members. At the meeting, all agreed that the market is moving in the right direction, but is not yet balanced. Russia was the most skeptical, but ended up supporting the deal which will result in countries accounting for more than half the world’s oil supply restraining output for two years.
***Dear Readers:
"Day job" obligations are making it difficult to expend resources toward writing original pieces consistently. We do not have a Soren K. site but wish to continue writing. To do so we will need to incur expenses. Marketslant is kind to post our work and the work of others here. We hope to be setting up a Soren K. Group Patreon page in the next weeks to continue giving our original work, as well as proprietary research for Precious Metals traders. Anytng offered will be greatly appreciated.
We also hope to do the following for readers
- weekly settlement price competition for token prizes - Silver Eagles etc.
- opportunity to guest post under SKG and on zerohedge where we write and post under Vince Lanci's Blog
- Ability to place your own editorials on Kitco if they accept as relevant to the market.
Finally we are in the process of raising capital for a fund and are speaking to seeders in that pursuit. Between our SKG members we have 65 years trading experience in PM, Energy, and Equities. Among our group are algo writers, analysts, $BB Fund partners, lawyers, Wall Street bank executives, and other complementary minds. Trade ideas we execute when up and running will be shared with site Patrons as investors permit.
If you have an opinion, interest or wish to write please contact us at
***
Read more by Soren K.Group
