preposterous
market vibes
November 17 … )
"O wonder! How many goodly creatures are there here! How beauteous mankind is! O brave new world, that has such people in it." Miranda, The Tempest
In the news
Tyson lost his 8-rounder to Jake Paul on Netflix last Friday but it was poignant entertainment because Trump and his A team were at the Garden on Saturday; glory days past and present.
Doomberg wrote an enthusiastic ovation for Trump’s latest cabinet nomination on Sunday, portentous of higher nat gas and lower oil imo…
In one of the more tone-deaf news items since Beyonce and Oprah netted millions for nothing, the military industrial state has ventriloquized leaders in the US and Europe saying “more war is the only path to real peace in Ukraine.”
Ueda, speaking for the BOJ last night said,”We will raise rates or lower rates or leave them unchanged.” The Yen went down. MS sees S&P =11% by New Years’. GS sees gold at $3000 in 2025.
I have the flu.
In the markets
WTI prices closed at the low of the week and month on Friday. This articulate wedge in weekly data is accelerating down as multiple sellers have been competing for buyers for three years with consistently lower offers. Ultimately these sellers will converge with buyers in the mid 60s where prices will either rally again or go lower as unfilled buyers seek liquidity.
The technical situation in gasoline is even more acute. A three-year flat bottom below $2.00 has been developing horizontally accepting these low prices, not rejecting them. Gasoline has been in a steep down trend for a full year including a seasonal period of high demand. An island gap down from September 3rd (encircled) is often a negative form.
NYMEX #2 heating oil a US benchmark for all distillates. The heat chart is a little different. High OI in a flat market implies commercial hedges. And high embedded OI is of paper supply and that weighs on prices. The key is crude, which is too high, imo.
Big picture:
At last count the total inventory of all above ground global strategic and commercial crude oil inventories is estimated at 5 billion barrels or 50 days of supply if every well on earth stopped operating. The issue with a weaker oil market is not supply or demand, it is capacity to produce it faster than ever at historically low cost with historically high accuracy. The earth is a tank farm; cheaper to store it, unnecessary to insure or hedge it. It is possible that falling inventories are bearish.
Gold
Gold spent most of 2024 virtually ignored by western financial institutions. Sub texts like unsustainable treasury debt didn’t have an effect on investors because frankly, they were either too poor to care or getting incredibly rich on stocks. This $200 selloff in gold has generated an equal lack of interest.
There is a fib retrace to $2345 and a 1-year compression POC (point of control) at $2340 in weekly data (chart below). Notwithstanding an insane escalation in Ukraine there are no safe long entries on this chart. Gold might find balance anywhere. Maybe here, maybe lower. Let it.
Trump has been credited for the strong dollar and cheaper gold. I disagree that, 100%. That and more coming up shortly….
