We show the underlying costs of QE by the Federal Reserve in terms of much higher inflation that counters the benefits of lower interest rates on the Home Ownership Rate by lowering disposable income for consumers.
Watch for a lot of inflation data and central bank commentary by fed officials next week. We could also get some fireworks in currency markets next week.
Basically, a lot of Oil was pushed through the system in terms of refined product just to get it out of oil storage inventories, refining for the sake of refining, regardless of need.
Focus on Bond Prices, and forget about Bond Yields, nobody is trading or investing in the Bond Market since Helicopter Money by Central Banks hit financial markets in 2008 because they are searching for Yield.
We do a deep technical dive into the Silver Market now that it has officially broken out, and has the potential to do something special if market forces align correctly for the precious metal.
It is important to know your market well, and identify which catalysts are drivers for supporting a Reversion to the Mean Trading Strategy that you can assign probabilities, timeframe and position sizing around in constructing a viable investing model.
We point to the necessary components for pulling this idea off, and what separates Japan and China from the US and Europe in this regard, and what is the likely match or catalyst that blows this whole monetary experiment up.
Institutional Traders often close out or initiate new positions on the last 5-minute bar of the "Pit Trading Session" which often results in large relative volume to overall market liquidity dynamics and leads to explosive spikes in Oil at the close (1:30 CST).
We are starting to price back in a December Rate hike by the Federal Reserve, slowly but surely we are coming off the zero bound for this market event.
The Silver Market really broke out this week, far outpacing Gold, and is the market to watch in my opinion going forward regarding more "Central Bank Currency Devaluation QE Stimulus Initiatives" and the resultant implications for financial markets.
