PM Daily Market Commentary - 9/26/2017

davefairtex
By davefairtex on Wed, Sep 27, 2017 - 4:14am

 

Gold plunged -16.90 to [-1.29%] to 1314.10 on very heavy volume, and silver fell -0.38 to 16.84 [-2.18%] on moderately heavy volume. Yesterday's safe haven trade unwound today; gold, silver, bonds, and the Euro all dropped.

Part of the problem was a speech given by Janet Yellen, where she said that “gradually rising interest rates is the most appropriate policy approach amid higher uncertainty about inflation.” The market interpreted this as an increased chance of a rate increase. This both caused the buck to rally, and gold to sell off.

Candle print was a bearish engulfing, but the candle code found it to be just neutral rather than bearish. Forecaster just dipped -0.10 to read +0.17. It appeared that buyers showed up in the 1295-1300 range. Gold remains in an uptrend, but not by much. Gold is back below the 9 EMA.

COMEX GC open interest fell -1,786 contracts.

Rate rise chances (Dec 2017) jumped higher to 76%.

Silver fell starting late in Asia trading, and pretty much didn't stop until the market closed in New York. Candle print was a long black candle, which the code felt was bearish – it did not mark a low. Forecaster plunged –0.50 to -0.41. Silver dropped below all 3 moving averages, and is now in a downtrend.  All my indicators look fairly unhappy with silver.

Open interest in COMEX SI contracts fell by -341 contracts.

The gold/silver ratio rose +0.70 to 77.01. That's bearish.

Miners gapped down at the open, and traded mostly sideways. GDX fell . GDX printed a spinning top/bearish harami, which the code found neutral, while GDXJ printed just a spinning top, which the code found bullish. Both ETFs are now back below the 9 MA as well as the 50 MA. Forecasters: GDX +0.13 to +0.23, GDXJ +0.04 to +0.11. I don't know what that's about. Maybe the forecasters see something I don't.  It will be really interesting to see what happens tomorrow.

Today, the GDXJ:GDX ratio fell -0.43%, as did the GDX:$GOLD ratio (-0.91%). That's bearish.

Platinum fell -1.87%, palladium rose +0.39%, while copper dropped -0.60%. Platinum made a new low, and is back in a downtrend, as is copper. Palladium found support on its 50 MA. Copper is in a shallow downtrend, while platinum is in a steep one.

USD rose +0.34 [+0.37%] to 92.78, following through on yesterday's strong move. Really the move was about the Euro (-0.48%), which is continuing to fall after Merkel's poor showing in the German elections. The string of articles I've read are all fairly negative about what this means for the EU, and the fleeting hope that Macron would bring about some sort of Eurozone renaissance.

Crude fell -0.04 to 52.09. Crude was actually down a bit more, but came back at end of day following a relatively bullish-looking API report, which showed a crude draw (-745k) and a gasoline build (+2.4m) which caused a 25c pop in the price. Today's candle print was a doji, which the code felt was bearish, with a 55% chance of marking the top. Crude's forecaster ticked up +0.01 to +0.46. Direction will probably be determined by the EIA report tomorrow at 10:30 am. RSI7 is currently at 82, which is fairly overbought. Still, the COT report (which came out yesterday) show that managed money still has a fair number of shorts left to squeeze.

SPX rose +0.18 to 2496.84. SPX rallied slightly during the day, but sold off in the last few minutes. Candle code was a long black candle, which the code felt was neutral. Tech led (XLK:+0.36%) while materials trailed (XLB:-0.44%). Really not much happened.

VIX fell -0.04 to 10.17.

TLT fell -0.18%; it was actually down more substantially but managed to come back by end of day. Candle print was a bearish harami which the code felt was neutral. TLT's forecaster dropped, but remains relatively bullish at +0.29.

JNK climbed +0.11%, making a new high and printing a shooting star candle – but the shooting star did not mark a top. JNK remains in a slow uptrend.

CRB fell -0.66%, dropping back below its 200 MA by a few pennies. All 5 commodity groups fell, led by PM (-0.83%).

So what happened to the metals today? Well let's see. The buck rallied, which is never good, on a falling Euro and a hawkish Janet Yellen. The whole commodity index tumbled, which isn't helpful either. Certainly platinum is selling off hard, that's not helpful either.

Just FYI, top positive correlations with gold (since 1997) are: HUI, silver, platinum, HUI/Gold, and silver/copper.  Top negative correlations are SPX/HUI, USD, gold/silver, and the 1 year treasury yield.

I'd give you a chart on the Euro, except I haven't managed to get my forecaster to work on it just yet.

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4 Comments

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 382
Still Going

Another nice big move down for the metals today.  Silver was just about to execute a golden cross.  They will have stopped that a couple of pennies short, when it's all said and done.  Excellent work.  At least the miners didn't get killed today.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5694
patience

We just need to wait until the stars & moons align again.  The rally on Monday was a headfake.  It happens.

And as you say, the miners actually did surprisingly well.  Some of the ones I watch were actually up today.

 

PeakGold's picture
PeakGold
Status: Bronze Member (Offline)
Joined: Jun 3 2017
Posts: 78
Gold chart

Here is my chart for gold...

https://i.imgur.com/AV7NKMk.png

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 382
davefairtex wrote: We just
davefairtex wrote:

We just need to wait until the stars & moons align again.  The rally on Monday was a headfake.  It happens.

And as you say, the miners actually did surprisingly well.  Some of the ones I watch were actually up today.

 

Your forecaster may be on to something there.  Will be interesting to see what it comes up with tonight.  And Peak, looks like we won't have to wait too long for your $1250 target.

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