PM Daily Market Commentary - 10/23/2017

By davefairtex on Tue, Oct 24, 2017 - 4:17am

Gold rose +1.80 [+0.14%] to 1283.60 on heavy volume, while silver rallied +0.05 [+0.32%] to 17.10 on heavy volume also. Both gold and silver did well in spite of a decent-sized rally in the buck.

Gold fell in Asia and London, making a new low to 1273.60, languishing in the red until about 11:55 in the US, when it spiked higher, returning prices back into the green by the close. Candle print for the day was a takuri line, which had a 27% chance of being a reversal. That's not a very good rating for a takuri line. Forecaster moved up +0.08 to -0.15. When viewed in Euros, today's move was actually fairly strong.  A rally tomorrow could result in a fairly bullish reversal pattern.

COMEX GC open interest fell -763.

Rate rise chances (Dec 2017) rose to 97%.

Silver followed gold, making a new low to 16.87, and then spiked higher alongside gold at 11:55. Silver's candle print was a hammer, which had a very low rating – it was a bearish continuation. Silver's forecaster ticked down -0.01 nudging silver into a downtrend at -0.01. Silver continues to have some strong support at round number 17.

Open interest in COMEX SI contracts fell by -130.

The gold/silver ratio fell -0.14 to 75.06. That's bullish.

Miners edged lower, with GDX off -0.39% on moderate volume while GDXJ dropped -0.63% on moderately light volume. Junior miners continue to underperform; GDXJ made a new low today, while GDX did not. GDX printed a spinning top which was a bearish continuation; GDXJ printed a southern doji, which looked like a reversal (56%). That's a decent rating for a doji. Forecasters: GDX +0.01 to -0.23, GDXJ -0.09 to -0.41. Miners remain in downtrends, with GDXJ leading GDX.

Today, the GDXJ:GDX ratio fell, as did the GDX:$GOLD ratio. That's bearish.

Platinum rose +0.22%, palladium plunged -1.73%, while copper rallied +0.47%. Platinum appears to be putting in a low (its forecaster shot up +0.63 to +0.20). In spite of palladium's big move down today, it remains in an uptrend.

USD rose +0.22 [+0.24%] to 93.72. The short white candle was probably a bullish continuation, and the forecaster rose +0.33 to +0.47. The buck is moving slowly higher – the Euro has fallen to 117.49, with critical support at 117. If the Euro falls through 117, the buck could really take off. The upcoming ECB meeting (scheduled for Thursday) should provide some near term direction, although the situation in Catalonia could trump whatever actions the ECB takes. Technicals say the buck is in a reasonably strong uptrend right now.

Crude fell -0.21 [-0.40%] to 51.86. It was a fairly quiet day, with oil trading in a relatively narrow range. The short black candle was neutral. Forecaster moved up +0.32 to +0.12, which puts oil back into an uptrend. The resistance at 52 remains fairly strong. It feels as though oil needs a catalyst to get through this resistance area.

SPX sold off today, down -10.23 [-0.40%] to 2564.98. Print today was a bearish engulfing/bearish belt hold, which has a 68% chance of being a reversal. While SPX remains above all 3 moving averages, the bearish engulfing print does look fairly disagreeable. Sector map shows cyclicals leading lower (XLY:-0.68%) while utilities did best (XLU:+0.05%). That's the typical sector rotation for a bear market move.

VIX rose +1.10 to 11.07.

TLT rose +0.18%, moving only slightly higher. I thought it would have done better given the move in equities today. Bonds remain mired in a short term downtrend; TLT forecaster rose +0.08 to -0.36.

JNK fell -0.11%, printing a bearish engulfing on the day which could be a bearish reversal (47% chance). JNK forecaster dropped -0.23 to +0.15. JNK remains above all 3 moving averages, but today's move is starting to hint at risk off.

CRB rose +0.32%, with 3 of 5 sectors rising, led by agriculture (+1.40%). CRB continues its slow recovery.

While the metals remain largely in a downtrend, the selling does not seem particularly intense, and the slope of the downtrend itself is not particularly steep. The buck is slowly moving higher off its lows, the Euro is falling, and this continues to put pressure on the metals. Gold in Euros actually looks relatively neutral right now.

There was a hint of bearishness in the equity market today. Will it lead to anything? If it does, that should help gold.

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