PM Daily Market Commentary - 11/9/2017

By davefairtex on Fri, Nov 10, 2017 - 4:50am

Gold rose +3.60 [+0.28%] to 1285.60 on very heavy volume, and silver fell -0.05 [-0.26%] to 16.98 on very heavy volume. A big drop in the buck [-0.44%] - driven by the news that the Trump tax cut for big companies won't be phased in for another year - didn't seem to help gold and silver very much at all.

Gold moved slowly higher today alongside the rising Euro, but the move in the buck didn't quite keep pace with the currency. Looking at the price action intraday, it felt as though there was a fair amount of selling pressure on gold. There were lots of small spikes down, which seemed to keep a lid on price. More or less the same thing happened in platinum.

Candle print for gold today was a spinning top, which was a bullish continuation. Today's new high invalidated the possible (bearish) reversal bar from yesterday. The forecaster moved higher, rising +0.09 to +0.11. The volume today was immense – the highest volume in several months.  The large volume was a bit of a curiosity; price didn't move much at all, there was no large OI build - its a little perplexing.

COMEX GC open interest fell by -1,348 contracts.

Rate rise chances (Dec 2017) fell to 92%.  Perhaps the drop was about the tax reform delay.

Silver chopped sideways during Asia and London, but suffered a big spike assault just before the US market opened, dropping 16 cents in about two minutes, with 5000 contracts being traded. Low for the day was 16.91, the low point of the 2-minute spike. The spike definitely got silver to underperform today. Silver ended up printing a spinning top candle, which the code found to be neutral. Forecaster moved up +0.08 to read -0.06 – edging back towards neutral. Silver remains within its uptrend channel. Big picture, the spike didn't change anything.

COMEX SI open interest fell by -1,349 contracts.

The gold/silver ratio rose +0.41 to 75.69 That's bearish.

Miners mostly moved sideways today, with GDX falling -0.34% on moderately light volume, and GDXJ down -0.35% on light volume. Forecasters: GDX fell -0.14 to -0.26, GDXJ down -0.06 to -0.23. Downtrends in the miners are getting a bit more pronounced – although both ETFs remain above their 9 MA lines. HUI's forecaster also fell today, issuing a sell signal.  Its also a swing high for HUI - although since the HUI index doesn't have volume bars, the candle code can't assess HUI's candle patterns.

Today, the GDXJ:GDX ratio was flat, while the GDX:$GOLD ratio fell. That's bearish.

Platinum rose +0.62%, palladium fell -0.57%, while copper dropped -0.26%. Palladium's spinning top might be a bearish reversal (45%), copper's high wave might be a bullish reversal (62%), while platinum's new high is a bullish continuation. It was a mixed bag today for the other metals.

The buck plunged -0.42 [-0.44%] to 94.19, dropping on the news that the business element to the republican tax cuts may be postponed until next year. Candle print was a 3-candle swing high, and the forecaster dropped -0.55 to -0.24, which is a sell signal. USD ended the day well below its 9 MA. After a long sideways move, the buck is now in a downtrend.

Crude rose +0.20 [+0.35%] to 57.12; there was a strong (45c) spike higher at 10 am, which mostly faded by end of the day. The spinning top candle print was neutral, while the forecaster dropped -0.26 to a just barely bullish +0.09. That is suggesting it would not take much to tip oil into a downtrend. Then again, there is Saudi Arabia, which really could go either way.

SPX fell -9.76 [-0.38%] to 2584.62, falling initially on the news about the delayed tax cuts. Buyers showed up in the second half of the session, dragging prices back up to even. Candle print was a southern doji, which had a 45% chance of being a (bullish) reversal. However, the forecaster was not happy at all, dropping a massive -0.70 to +0.01. According to the forecaster, SPX is right at stall speed. SPX ended the day just above its 9 MA. Sector map shows energy did best (XLE:+0.30%) while industrials led the market lower (XLI:-1.25%) along with materials (XLB:-0.85%) and tech (XLK:-0.80%). Market didn't like the news about delayed tax reform.

VIX rose +0.72 to 10.50. It was up more than 2.5 points earlier in the day, but the gains in VIX vanished when the SPX dip-buyers appeared.

TLT fell -0.28%, printing a swing high (reversal 49%). The forecaster fell -0.73 to read -0.35, which is a sell signal for TLT. The 10-year treasury dropped into a sell signal yesterday.

JNK fell -0.65%, another big drop, breaking down below the previous low set back in August. JNK has been chopping sideways for quite a while, but today's move has dropped it into a longer term (weekly chart) downtrend. Forecaster is very bearish, reading -1.77. Often this sort of reading happens at or near reversal points. Candle print was an opening black marubozu, which has a 47% chance of being a (bullish) reversal.

Here's what that JNK chart looks like.  Two things going on: 1) breakdown below the previous low.  That's long-term bearish: the lower low puts JNK in a longer term downtrend.  2) an overextended forecaster - last time this happened (in August), it marked the low.  So short term, JNK probably bounces.  Longer term: risk off.

CRB fell -0.01% - unchanged again today. 3 of 5 sectors rose, led by livestock (+1.09%) and energy (+0.74%). PM continues to put in one of those slow, saucer bottoms.

The big drop in the buck didn't do very much to help gold and silver today. This is a bit concerning, as is the drop in the miners.

JNK is looking quite weak, and that's signaling risk off, as is the move down in SPX.  Market doesn't like the idea of delayed tax cuts - I suspect the market was anticipating a flood of stock buybacks, which won't happen if all that overseas money isn't going to be repatriated after all.  [Stock buybacks: making america great again, I suppose].

No clear direction for PM right now.  A declining dollar should help, but it hasn't helped just yet.

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davefairtex's picture
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btc update 2017-11-09

Yesterday they pulled the Segwit2x hard fork, and there was a rally to 8000 which generated a buy signal, but the rally failed, leaving behind a spinning top candle with a large upper shadow - code gave that a 60% chance of being a bearish reversal.  Then today, we see a dark cloud cover pattern, which is another 57% chance of a bearish reversal.  And today the forecaster dropped back below 0 once more.

It should be "good news" that there's no hard fork.  But the price action doesn't look like good news, does it?  The "no hard fork" rally was completely retraced.

And we're below the 9 MA.

"When markets sell off on good news..."

Run, don't walk.  :)

ETH actually looks substantially better than BTC, for a change.  There was a buy signal yesterday, with a follow-on rally today.  The only fly in the ointment is a spinning top candle today that with a large upper shadow which has a 53% chance of being a reversal.

lambertad's picture
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Posts: 185
Gold/Silver smack b/c.... Friday!

Friday Gold Smack

And silver

davefairtex's picture
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5694
btc - follow through

BItcoin followed through off its reversal, dropping 7.8% after yesterday's dead cat bounce.

What's going on?  I saw an article pointing out that bitcoin cash had almost doubled in the past few days.  Now you know where the money from bitcoin is going - from bitcoin, into bitcoin cash. 

Perhaps: no segwit2x means bitcoin cash is now the only option for people who want a lower cost transaction mechanism, and so money is flowing there.  Maybe.  I don't follow it closely enough to know for sure.

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