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Gold, as high as $1,280 intra-day Wednesday, quickly got pushed back to a 3-week low since the Fed rate hike announcement after some market participants heard a somewhat more bullish tone than they expected from Fed officials…

Failure to hold support on a weekly basis at $1,260 has the potential to put additional pressure on bullion next week; however, according to John’s TA, which has been as accurate as any of the top analysts covering the sector, Gold is unlikely to fall below the mid-$1,230’s…that means another dip to the downside would turn out to be a “head fake”, similar to what occurred in late December last year (also after a Fed rate hike)…this is something to prepare for…

“Big Picture” Gold View

The day-to-day noise in Gold doesn’t change the “Big Picture” – below is another case from John for Gold to power much higher over the next 2–3 years, back toward its late 2011 high around $1,900…

Note the transition from an extended period of sell pressure to increasing buy pressure on this 25-year monthly chart…the same thing is being seen in Silver…

Crude Oil Update

It has been another rough week for Crude Oil which also helps explain the Venture’s recent slump…WTIC is poised for a 4th straight week of losses, and is now trying to rebound off 6-month closing lows, as OPEC-led production cuts have so far failed to allay concerns regarding global oversupply…

Adding to those concerns, non-OPEC member Russia is expected to export 61.2 million tonnes of Oil via pipeline in the 3rd quarter, equivalent to about 5 million bpd, against 60.5 million tonnes in the 2nd quarter, according to industry sources and Reuters‘ calculations…

Meanwhile, it was just announced by Baker Hughes that the number of U.S. Oil drilling rigs in operation rose by 6 to 747 in the week to June 16…drillers added rigs for a 22nd consecutive week as part of a year-long recovery after prices pulled back from a 2-year rout to above $50…the pace of additions has slowed, however, and lower prices will certainly test shale drillers…

Interesting piece in today’s Wall Street Journal by Bradley Olson as he reviews how Big Oil companies including Chevron, Exxon and Royal Dutch are piling into the Permian Basin, the Oil-rich region straddling Texas and New Mexico that is the epicenter of the second wave of U.S. shale drilling…we’ll see if they can actually do it, but Chevron and others say they will soon achieve something that has proven surprisingly elusive for their smaller peers: turning a profit…

“The shale-drilling renaissance rocked global markets and helped send Crude prices into a prolonged slump.  What it didn’t do was bring in much cash.  Since 2011, the largest 30 independent U.S. shale producers spent an average of nearly $1.33 for every $1 they made drilling wells, according to a Wall Street Journal analysis. In the past 2 years, those 30 have lost $130 billion. More than 120 companies have gone bankrupt, and many of those that survived have done so with cash infusions from Wall Street, which rewarded the drillers for their fast growth. That model won’t work for Chevron, Exxon and other companies who pay shareholders generous dividends and need to bring in more cash then they spend over time.  To transform an important – yet money-losing – technology into a source of profit, executives like Mr. Niemeyer, the head of Chevron’s midcontinent business, are turning to their strengths.  Those include massive scale, deep pockets that have given them time to learn from the successes and failures of others and an ability to bring techniques used all over the world into West Texas. They are joining the race to push Crude production here to 4 million barrels a day within a decade, rivaling the output of Iraq,” Olson wrote…

Venture Update

A reversal in the Venture is close at hand and a key “turnaround” point is likely somewhere between 770 (touched yesterday) and 760 based on this fresh 6-month daily chart from John…

Key takeaways:

• RSI(14), 20% after yesterday, is very close to support at 2 previous lows over the last 6 months – December 2016 and March 2017;
• RSI(2), not shown below, is at extreme levels on the daily chart not seen since the bear market bottom in January 2016;
• Sell pressure (CMF) is in the process of peaking;
• -DI is in the process of peaking;
• Strong band of support between 760 (trend line connecting the December and March lows) and 770, with the rising 300-day moving average (not shown below) at 768;
• The Venture has always corrected at least once to (or slightly below) its 300-day SMA during a bull market cycle, the last time being July 2010.