PM Daily Market Commentary - 12/6/2016

davefairtex
By davefairtex on Wed, Dec 7, 2016 - 4:58am

 

Gold fell -0.70 to 1171.40 on light volume, while silver dropped -0.03 to 16.78 on moderately light volume. The dollar rebounded from its big loss yesterday; this acted as a bit of a drag on PM, which more or less just traded sideways in a narrow range.

Gold's candle print was a spinning top, but one of the useless ones, providing us no information as to where we go next. I should have a candle pattern entitled “useless spinning top.”  Gold remains below the 9 EMA.

Rate rise chances fell to 93%.

Gold open interest at COMEX fell -4,891 contracts.

Like gold, silver generally drifted lower. Silver printed a doji candle, which unlike gold, is actually mildly bullish (20%). Silver remains above its 9 EMA, which is also bullish.  I do see a bit of a danger in the next week or so, however: the previous sideways consolidation ended up with a week-long rally that ran into resistance at the 50 MA, and then sold off hard.  If we do get a rally in silver, we really need to see a conclusive close above the 50 MA to avoid this outcome happening again.  The shorts will probably jump all over silver at the 50 - something to think about.

Miners did a little worse than the metal, with GDX falling -0.61% on light volume, while GDXJ dropped -0.48% on light volume also. GDX printed a spinning top, which turned out to be mildly bearish, a 23% chance of a top here. Today's slight drop took GDX back below its 9 EMA.  GDX remains in the middle of its recent consolidation range.

Platinum fell -0.37%, palladium sank -1.56% and copper dropped -0.91%. Copper printed a bearish harami, a 39% chance of a top, but copper still remains above the 9 EMA. Palladium has now fallen below its 9 EMA and appears to be entering a downtrend.

The USD slowly recovered from yesterday's big move, climbing +0.43 to 100.39. This resulted in a bullish harami candle print, which is actually fairly bullish (55%). The rebounding dollar did gold no favors, but at least gold didn't fall further.

Crude fell just -0.04 to 50.91, first attempting to rally, then falling, then rebounding back to even once again. Candle print was a doji, which provides us no information – another one of those useless doji candles. Still it doesn't seem like there was much follow-through off yesterday's shooting star, so that's a plus. The API report showed a (surprisingly bullish) 2.2 million barrel inventory drop, which caused a late-day 30 cent rally in the price of crude. EIA petroleum status report tomorrow.

SPX rallied today, moving up +7.52 to 2212.23, led once again by the financials (XLF:+0.87%) with utilities (XLU:-0.19%) trailing. The financials were helped by news of an impending Italian taxpayer-funded bank bailout, which was announced just after the failed referendum. Reading the price “tea leaves”, I note that DB jumped up a huge +9.78% on the day (and is up more than 50% off the lows set back just three months ago) – I'm just guessing they own an unfortunate quantity of distressed Italian bank assets that will benefit greatly from a taxpayer-funded bailout. I'm sure the 5-Star party in Italy will make noises about yet another taxpayer-funded bailout, but the prospective new Italian “technocrat” government (technocrat = “unelected”) will see to it that no disagreeable “electoral result” will disturb the plans of the gang in Brussels. Someday this thing will blow – but not today.

“Those who make peaceful revolution impossible, will make violent revolution inevitable.”

And also

“Those who don't learn from history will be condemned to repeat it.”

And one more

"It became necessary to destroy the town to save it."

VIX fell another -0.35 to 11.79.

TLT fell -0.08% - it continues to chop sideways after last week's swing low, and remains below its 9 EMA.

JNK rallied, up +0.39%, finally eliminating the pattern of lower highs and lower lows by breaking above the prior high. JNK's downtrend is over.

CRB fell -0.49%, printing a swing high. 3 of 5 sectors fell today, led by energy.

We did get a little bit of new information today; SPX might be ready to break to new highs soon enough, JNK is looking bullish, and in general, when financials rally, they tend to pull the overall market higher. In short, its a risk on picture, and the continuing strength in crude appears to be helping.

As for gold – it hasn't stopped falling yet, while silver is still trying to form one of those saucer bottoms. Miners are chopping sideways; traders seem happy enough to buy the miners at these levels - certainly happier to buy the miners than to buy gold itself. The GDX:$GOLD ratio has been slowly tracking higher over the past few weeks.  That's gentle hints of "risk on" for PM.  Maybe its a tell.

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2 Comments

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5417
nice silver rally; gold lagging

I'm seeing gold +6.90 and silver +0.41 [+2.47%], with miners just +1.89%.

Silver easily broke out of its recent consolidation and is looking strong.  Gold isn't yet above its 9 EMA, and the miners are moving slowly higher but have not yet broken out.

I don't have an answer for why gold is doing so poorly, relatively speaking, but that gold/silver ratio has been steadily plunging now for the past few weeks, and it appears to be dropping another -1.50 just today.

 

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5417
Trump vs Clinton campaign crews shoot it out

Fascinating dialog between the Trump and the Clinton campaign teams.  Its a pretty cool look at the inside of both campaigns, with the HRC team being "somewhat" more defensive.

Scroll to the bottom of the web page.

http://iop.harvard.edu/get-inspired/campaign-managers-conference/campaign-president-managers-look-2016

Representatives from the Trump and Clinton campaigns joined together to discuss the general election. The roundtable was moderated by Dan Balz of The Washington Post, Katherine Miller of Buzzfeed, and Andrea Mitchell of MSNBC.

Participants

Clinton: Robby Mook, Mandy Grunwald, Teddy Goff, Karen Finney, Jennifer Palmieri, Joel Benenson

Trump: Kellyanne Conway, David Bossie, Tony Fabrizio, Brad Parscale, Corey Lewandowski

 

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