The collision of global markets and social mood

Friday, December 30, 2016

Friday -- A Badass 2017

S&P E-mini Futures:
Modestly higher from yesterday's lows.

On this last trading day of 2016, it already looks like 2017 is shaping up to be a badass year.

Someone bought $3.5 billion in gold at yesterday's European close, roughly coincident to the US expelling 35 Russian diplomats in "retaliation for election hacking" (still without proof).

Then last night, EUR spiked over 1600 pips higher.

Geopolitics and macro events could take center stage in 2017 causing both massive mean reversions and price discovery in treasuries, gold, commodities, FX, and equities.

And then there's China where record capital outflows could overstress its financial system and destabilize the yuan.

Strangely, with such bad air quality that it periodically has to shut down entire cities, China's just announced its coal output will increase to 3.9 billion metric tons in 2020, about 18% higher than this year.

Sounds obtuse unless you're skimping pennies.

Oh, and Russia just scored a media & PR coup by announcing it will not expel any US diplomats.

EUR spiked over 1600 pips higher last night. GBP on the move too.

Once again hearing dollar is toast talk. Will say one thing: unless the USD fails to take out its 2001 high at 121, it could be forming a multi-decade corrective wedge to below .70 that would explode higher afterward.

But for now, unless the $9 trillion global USD carry trade de-stresses itself, USD could be pressured much higher, as crowded as the trade is currently.

Prices having another hesitant time.

WTI crude choppy pullback amid what is looking like a larger weekly wedge formation from its 2016 lows.

NG pressuring $4 -- and possibly its multi-year trading range if successful (~4.20).

Not yet seeing what others are "seeing" in gold: that the next bull phase has begun. The 78.6% retracement still remains, and the rally pattern is still suspect. Nonetheless, gold is higher along with silver, platinum, palladium, and copper.

S&P Outlook:
Not yet seeing what others are "seeing" here, either: that the S&P made a true bottom yesterday, even though it "hit" the 2244.73 Fib target, landing just ticks away at 2244.56.

Simply put, not yet satisfied with the wave structure off the low.

Would need a strong and sharp close above 2260-2266 zone to change my mind.

2243.12 is the 38% Fib retracement (support) of the rally from 12/01.

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