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Crude Rallies (on No Gaza Truce?), and Biden’s Replacement

The Biden Replacement operation picked up speed this week. The timing suggests that a near term Replacement Event might be about to drop, which could lead to ‘volatility.’ Oil’s rally comes on the back of another failed Gaza truce suggesting Middle East unrest could become more widespread.

The User's Profile davefairtex February 11, 2024
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  • Fed Balance Sheet (WALCL): +1.2B
  • Total Bank Credit (TOTBKCR): +1.1B (+0.01% w/w); contractionary.
  • 30 Year Mortgage Rates (MORTGAGE30US); 6.64% (+1 bp)
  • 10-Year Treasury (DGS10): 4.18% (+15 bp); big increase.

It was a quiet week from the standpoint of economic news; at least on the items I track anyway.

There was some minor dollar-deconfetti this week – the buck rose 0.21 (+0.20%) to 103.99.  All the gains came on Monday – the buck moved up about 0.5%, but then faded as the week progressed.   The “spinning top” candle looks bearish, but the candle model didn’t seem worried.

The 10-year treasury rate rose 15 bp, which pulled it back above the 200 MA – that’s bullish for the rate trend going forward.  The 10-year yield is now back in an uptrend in weekly & monthly timeframes.  Note that bank credit stopped expanding this week too – perhaps higher rates resulted in fewer loans?  Or maybe it was something else.

Gold moved slightly lower, dropping 5.20 (-0.25%) to 2038.70.   I keep talking about open interest – here’s a chart with OI (blue line) added.  OI is lower now (at gold=2039) than it was back in Oct 2022 – when gold was trading almost $400 cheaper.  While OI and “commercial shorts” aren’t exactly the same, OI gets updated daily – and it suggests that the level of short interest for gold is much lower than it was back in 2022.  “Something has changed” – and curiously, this happened more or less as gold has moved above 2000.

I’ve been saying this for a while: “someone” doesn’t want to short gold right now.  And this (price-bullish) situation appears to be getting “worse” (i.e. better for the goldbugs) as goes on.

Silver fell 0.20 (-0.89%) to 22.59.  Most of the losses came on Monday – with silver recovering much of the losses by the end of the week.  Silver continues to be weak – but it is stronger than the “other metals.”  Unlike gold, silver’s Open Interest continues to rise as price declines.  This is not normal; the usual pattern is for the banksters to close their short positions during price declines, But for the past month, OI has continued rising while price has declined.

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I’m just wondering how long is the appropriate “mourning time” that I should offer to my “Vaccine”-loving, Trump-hating, Fauci-adoring, RFK Jr.-Disparaging, Biden-supporting, Liberal-arts-educated sister,
… yeah,...
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