evening wrap, October 29

market vibes

October 29…

“Within a hundred years of physical and chemical science, men will know what the atom is. It is my belief when science reaches this stage, God will come down to earth with His big ring of keys and will say to humanity, ‘Gentlemen, it is closing time.’ “ Pierre Berthelot, 1869

Earlier this morning silver traded back towards the void above $49.22 noted on this bar chart. When Powell said a cut in December is not a forgone conclusion …bargain hunters looking for another dovish FOMC dumped their longs.

This is a 10-session compression profile illustrating resistance approaching the void noted in the chart above and the short-term point of control at $48.07ish. Now that a reaction rally has been rejected, this void above $49 becomes a benchmark for silver to overcome as time and development continues.

This a bigger picture of the same time frame in gold that shows the severity of selling last Tuesday. All development has been below the POC since Wednesday. The two horizontal lines are the high today at $4046.00 and the low of the day at $3930.00.

The bar chart underscores the intensity of rejection at $4000.00. OI is falling and volume is low. Gold is still in early days of a correction, in my opinion, but it could begin a range under $3900 and create successive challenges of $4000 with a few dips into the $3800 handle. I’m just guessing.

(December gold daily data)

In monthly data gold prices are still very high with the highest volume in October since 2020 and the highest volume occurring for three days at the absolute highs (encircled) indicating significant number of shorts have needed perfect location. Gundlach was on CNBC doing his usual excellent post-FOMC commentary. He mentioned his call last winter that gold would trade $4000 and updated his view to lower allocation from 20% to 10%. Smart guy.

Development in S&Ps is less bullish than it was Monday morning. Prices have not extended their gap higher. In fact, horizontal activity implies prices are accepting this new high level. MSFT and META both down 3.5% and 6.5% respectively after reporting. GOOG +2.5%. Interesting post by JPM from Z-Hedge

Bitcoin is still in a funk.

WTI is holding above $60/barrel but the front of the curve has lost most of its tension. The Dec/Jan roll has been down every day since the panic short covering on the tariff announcement last Thursday. BBG has been writing about the glut again, after the markets started to sag.

Thee dollar index has not traded out of a narrow range since April 21. The point of control and range compression, by my eye at 98ish, is no less in duration than the $3385.00 POC that launched gold into a $1000 rally from September 2 to October 17.

I am not predicting a 30% rally in DXY but the positioning of these markets, higher interest rates, iffy gold and silver, and an island forming in stock indexes… generally favors the dollar.

The 5 year note needs no further comment.

my vibe

Jay Powell this afternoon: “Risks to inflation are tilted to the upside, and risks to employment are tilted to the downside.” Despite concerns about labor he said he doesn’t see any weakness. He did acknowledge AI and said the problem with labor is low demand for workers but avoided saying AI is the reason but he said it by not saying it. That’s called Fed speak.

Gold is a good example of a safe asset with risky prices. Silver alwys risky and never safe. I think…Putin said “game over” on an X post this afternoon. Could be wrong.

loyalty

I miss these guys

night all …good luckin Asia…

JJ

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