Where Do We Go From Here?

As expected, the Federal Reserve left interest rates unchanged at last week’s post-Election Day monetary policy meeting, while signaling another 25-basis point increase in the federal funds rate at its December 18-19 get-together.

But the results of last week’s elections, which returned control of the House to the Democrats, may put future rate increases next year in doubt. That bodes well for long-term Treasury bond prices – i.e., yields may have peaked.

As we know, Maxine Waters, D-California, is now the likely next chairman of the House Financial Services Committee. To put it mildly, she doesn’t like banks. Her first order of business, no doubt, is to impeach President Trump, as she’s said countless times. But a more realistic second goal will be to roll back all or most of the recent bank regulatory measures made so far by the Trump Administration, which, of course, rolled back much of the regulatory measures passed under the previous administration, mainly through the Dodd-Frank financial reform law.

If she’s successful, that will reduce the mammoth profits the banks have been making the past several years, which were boosted further by the Republicans’ tax reform law. That sharply reduced corporate income tax rates, not just for banks but all companies, although the banks seem to be the biggest beneficiaries. No doubt Waters and her Democrat colleagues have that in their gunsights also.

But that won’t be the end of it. Continue reading "Where Do We Go From Here?"

Gold & Silver: Falling Knives

Silver has failed to complete the second leg up as it couldn’t break above the August top of $15. It is interesting that this misbehavior of the white metal didn’t surprise you as the majority of you had bet last week that silver would fail and drop below $14.2. It’s impressive how accurate your forecast was!

In this post, I would like to update downside targets as we should be prepared for the resumption of the drop in metals after pullbacks have been finished.

Chart 1. Gold Weekly: Bear Flag Targets Bottom

falling knives
Chart courtesy of tradingview.com

Last week I reminded you of the big range of trade, which requires the retest of the downside of the range to complete the setup. Continue reading "Gold & Silver: Falling Knives"

Will Oil Find Support Near $60

Our research team warned of this move in Crude Oil back on October 7, 2018. At that time, we cautioned that Oil may follow a historical price pattern, moving dramatically lower and that lows near $65 may become the ultimate bottom for that move. Here we are with a price below that level, and many are asking “where will it go from here?”.

We believe the support near $65, although clearly broken, may eventually become resistance for a future upside price move. Our proprietary Fibonacci price modeling system is suggesting a new target near $52~53, and we believe this downside move in Oil is far from over at this point.

global climate

The current global climate for Oil is that suppliers are pumping more and more oil into the market at a time when, historically, prices should continue to decline. One of our research tools includes the ability to identify overall bias models for each week, month or quarter. Traditionally, Oil is dramatically weaker in November and relatively flat for December. Continue reading "Will Oil Find Support Near $60"

Cyclical Commodities Continue To Weaken

Crude Oil and Industrial Metals continue downward. This is significant per this NFTRH monthly chart showing these items and the broad CRB itself having hit trend lines from the 2008 highs. These pullbacks from long-term trend lines are notable and qualify cyclical commodities as risk indicators for the cyclical macro.

industrial metals

Here is oil’s weekly view. Key support was lost last week as noted in this article: Positive Implications for Gold Miners if Crude Oil Breaks Down. I expect currently oversold WTI to rally from the noted support area, but remain ‘not bullish’ on this cyclical commodity (and remain in scouting mode for the upcoming gold miner buying opportunity). Continue reading "Cyclical Commodities Continue To Weaken"

Weekly Futures Recap With Mike Seery

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures in the December contract settled last Friday in New York at 1,233 an ounce while currently trading at 1,211 down over $20 for the trading week as the precious metals across the board look to move lower in my opinion. Gold prices are trading below their 20 and 100-day moving average as the trend has turned negative because the U.S. dollar is right near another contract high as interest rates in the United States are on the rise and should continue to climb into 2019. If you are bearish, I would place the stop loss at 1,239 as an exit strategy as it looks to me that prices will retest the 1,195 level possibly in next week's trade as the commodities across the board look very week as now everything is following crude oil to the downside. Silver prices are down over $0.25 today as it looks like that will retest their contract low of 13.96 possibly in next weeks trade as that is also putting pressure on gold as the only bullish commodity is the S&P 500 which reacted very positively to the midterm elections. Volatility in gold is starting to increase and remember if you're trading a smaller account you can trade the mini contract which is 1/3 of the size of the large contract, therefore, reducing the monetary risk.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE

Continue reading "Weekly Futures Recap With Mike Seery"