VIX on the Dec 10, 2017

Since the last post Commercial twice built up a short position – both times VIX sharply soared above 11.5 points, followed by returning to 9 points.

Both times, the index e-mini SP500 does not fall below the previous low – positive divergence.

At the moment, open interest is declining, possibly reducing volatility.

/GC on the Dec 10, 2017

For a set of net shorts, gold needs to raise the price to at least 1300, attract new customers, sell them goods and continue to wait for the price drop.

Gold futures met expectations – the price touched $ 1300 twice, and, not being above this level, fell to the current level of $ 1250.

Commercial began to liquidate some short position, as evidenced by the reduction in open interest.

Now we need to see how the market behaves in the region of $1250 – $1240.

/CL on the Dec 10, 2017

Gold futures reached $59 and adjusted to $56. At the same time, the price for an important area of resistance is $56 – $57.
After adjusting the price from $59 to $56, the Commercial continues to increase its short position. The heating season has already begun – it is likely that a further insignificant price increase to $60 – $63.

But, with the expectation of the growth of the dollar, this growth in oil futures may take a month or two.

Interest rates (TNX) and Dollar (EUR/USD).

Another series of intermarket analysis …

Today we will focus on what is the cause of all the movements in the market cause the overflow of big money … interest rates and currency (US dollar).

Interest rates (important to change them) determine the value of money. Below are two charts: the yield of 10 year US bonds and the currency pair EUR/USD.

Growth rates leads to an increase in the national currency, the fall – a fall.

The image below clearly shows this relationship, but with a slight delay, ie, large capital needs more time to redistribute, as it takes time to the banking sector (the supplier of cash in the form of loans) to respond to the change in interest rates.

  • growth rates up to 2007 led to a rise in the dollar (falling of pair EUR / USD) in 2008;
  • growth rates in 2009 and early 2011 led to an increase in the dollar in 2010, and since mid-2011, respectively;
  • increase in interest rates resulted in a rise in the dollar by the end of 2013 in 2014 (coinciding with the fall of the ruble by 50%);
  • growth rates at the end of 2016 and the stabilization of this year could lead to a subsequent increase in the dollar (the same as the payment of dollar liabilities that will need to pay in dollars, thereby selling the national currency (in this case, in rubles), and coincides with the end of the year, “New Year’s rally”).

The analysis is not so difficult, but it is very important to start the analysis of the world situation from the outset.

Next will be more interesting …

/HG on the Nov 19, 2017

Slowly, but on large volumes, reached $3.05 and stopped.

What happened from the end of October / beginning of November is the rebuy of the Commercial of its huge short positions on Copper. Further, expect the movement to $3.2

On this movement it will be necessary to observe the open interest …

Intermarket Analysis: e-mini SP500 (/ES) vs. 30-year USA Bond (/ZB).

In a previous post about one of the dependencies (relationship) in intermarket analysis suggests that the bonds sagged seriously (it is the price of bonds, rather than the yield), while the price of the futures /ES continued to grow.

Last week, futures /ES dropped to 2560 – and that’s working out of this relationship.

To determine the time of the turn of the /ES it was necessary to follow the tape (every day) and watch several other tools (which will be discussed later).

All financial instruments are interconnected – money (by themselves) is not needed by anyone – you only need what you can buy (somewhere to invest). So in the market of futures, bonds, forex and raw materials – money (huge amounts) flow from one asset to another. And these marks are visible!

ES vs. ZB correl




/GC on the Nov 19, 2017

Short positions Commercial bought off a quarter (starting in September 2017). Gold stabilized at around $1270, after the price went to conquer the nearest $ 1,310 extreme.

For a set of net shorts, gold needs to raise the price to at least 1300, attract new customers, sell them goods and continue to wait for the price drop.

Short position of the Commercial group (most likely) will start to fall by this moment.

We are waiting for the development of the situation …