Disinflation Bias Rumbling Forward
All of the hawkish jawboning of the past week has sent the POSX higher which, in turn, has re-ignited the global disinflation bias trade. You can see it all across the commodity sector and it is adding fuel to the CoT rinse cycle.
In some regards, we're right back where we've been several times these past twelve months or so. Mother Fellen and her Goons jawbone The Pig higher with all of their rate hike nonsense and the "markets" react by anticipating disinflation/deflation. So far, we're only seeing this in commodities but, soon enough, it will become apparent in bonds and stocks, too.
For now, check the damage in copper. It's down nearly 2% today and back below 2.30.
As we've discussed forever, copper and silver are often paired together by commodity-trading HFT algos so when you see copper going down, you can almost always expect pressure on silver, too. I was wrong to sell my puts when I did as silver obviously did not stabilize near the 50-day as I had anticipated. Oh well, "you never go broke taking a profit", as they say but it was somewhat foolish to think that The Evil Ones would delay until Friday the continuation of their CoT wash. I mean, why delay when you've already got momentum on your side?
Friday will still, obviously, be critical. A BLSBS that "exceeds expectations" is going to spike The Pig and smash commodities, including gold. However, with so much damage having already been done over the past week (Silver is down nearly 9% for pete's sake!), maybe the BLSBS will be benign and then we'll just have to deal with additional jawboning in the weeks ahead.
As we watch price, keep an eye on copper. IF it breaks down and out of the pennant that I've drawn, it will almost certainly test the late summer lows between 2.20 and 2.25. And, IF that happens, you can bet that silver will break down and out of its pennant, too, and begin to test $14.00-14.25. Ugh.
And what if all this disinflation and commodity collapse ramps up the heat on companies like Glencore again? What if it leads us right back to where we were with the emerging market currencies? Can you see where, once again, Mother Fellen is playing a very dangerous game and balancing act? And for all of the "damaged Fed credibility" of the September FOMC, what credibility will remain after Fellen does nothing in December, too?
On the bright side, however, silver will soon be right back to where it was in September. Retail shortages and a cleaned-out CoT. So we've got that going for us...
And check platinum, too. It really needs to hold this area around $950. Below there, it risks a test of the $900 lows and this would not bode well for gold.
Ahhh, gold. The bane of The Bullion Bank Cartel. Do you remember this chart from just last Wednesday? At the time, even I thought that a goal of beating gold back to the Oct 2 levels was overly aggressive...
And now, here we are. It's as if October never happened...
Of course, this is all normal and fine according to jagoffs like the Jailbird or Trader Dick. Just a free and fair market at work. Whatever. Why anyone pays the least bit of attention to either of these losers or anyone else who denies the clear and present historical fact of precious metal price suppression and manipulation is beyond me. I mean, I'm all for discussion and self-examination but I'm not taking any world tours with someone who believes the earth is flat. I've got to draw the line somewhere as there really are at least a few absolutes out there. One of them is that the precious metals "markets"...and now ALL markets...are manipulated and attempted-to-be-controlled by the central planning central banks. Deny this and you are simply a fool...or a planted agent of disinformation. It's hard to tell one from the other so the best course of action remains "IGNORE".
Moving on, I just saw a tweet from ZH that stated that the FRBNY's own bank, Tungstenman, has just raised their NFP guess for tomorrow from 175M to 190M. If that's not a warning of what to expect at 8:30 am tomorrow, I'm not sure what is. Again, this is the same Tungstenman that has been saying for months that "a December rate was most likely".
Goldman: "we have revised up our forecast for October nonfarm payroll growth to 190k from 175k previously"
— zerohedge (@zerohedge) November 5, 2015
Finally, two links I beg you to read today. You should forward them, too. First, words can't even begin to describe the absolute FUBAR clusterfuck that is "Syria". This situation is beyond control and comprehension and this is extraordinarily dangerous. Oh my goodness...http://www.zerohedge.com/news/2015-11-05/cia-saudis-give-select-syrian-militants-weapons-capable-downing-commercial-airliners
And I think I'll make this next item a "guest post" on the home page. Simply terrific stuff from our pal, Jim Quinn: http://www.theburningplatform.com/2015/11/04/the-most-devious-liars-in-t...
As I close, I see that gold and silver have stabilized a bit but copper is still sinking...now down 2.5% at 2.265. Watch closely and, again, keep an eye out for some renewed headlines regarding Glencore et al in the days ahead.