PM Daily Market Commentary - 11/16/2017

davefairtex
By davefairtex on Fri, Nov 17, 2017 - 1:07am

Gold rose +0.70 [+0.05] to 1278.50 on moderate volume, while silver climbed +0.10 [+0.59%] to 17.08 on moderate volume also. In the PM space, it was an fairly uneventful day.

In risk assets, things were more exciting.  Republicans in the House passed their version of Tax Reform, and the Senate finance committee voted to approve the Senate version of the bill (which includes removing the Obamacare mandate) to the full Senate for a vote.  This was seen by the markets as a positive for equities and other risk assets.

Gold basically chopped sideways all day long. Candle print was a doji – neutral. Something got the forecaster upset: it dropped -0.70 to -0.31, which is a sell signal for gold. Yesterday it was happy, today it was not happy, and gold just seems to be chopping sideways.  Forecaster does poorly in projecting the future for sideways-moving markets.

COMEX GC open interest fell by -3,600 contracts.

Rate rise chances (Dec 2017) fell to 92%.

Silver moved sideways until after Japan closed, whereupon it moved slowly but steadily higher into the close in New York. Candle print was a short white/NR7, which was neutral. Silver's forecaster fell -0.04 to +0.02, which suggests silver will continue moving sideways. Silver did manage to close above its 9 MA, which is a positive sign, and it remains above its shallow uptrend line, which is also good news.

COMEX SI open interest fell by -1,882 contracts.

The gold/silver ratio fell -0.40 to 74.85. That's bullish.

Like gold, the miners basically just moved sideways today, with GDX down -0.22% on light volume, and GDXJ up +0.09% on moderate volume. Forecasters: GDX -0.38 to -0.19 (sell), GDXJ -0.12 to -0.22.  HUI looked the most positive, rising +0.11 to -0.01.  With a longer track record, I'm hoping the HUI's improvement is the one we should be watching; it is suggesting that a reversal might be coming for the miners.  Maybe.

Today, the GDXJ:GDX ratio rose, while the GDX:$GOLD ratio fell. That's neutral.

Platinum rose +0.15%, palladium climbed +0.42%, and copper moved up +0.07%. Platinum: uptrend, palladium: buy signal, copper: downtrend. Copper may be putting in a low here, but its uncertain.

The buck rose +0.13 [+0.14%] to 93.67, a small move, but just enough of a rally to print a swing low reversal pattern (54%). Forecaster rose +0.24 to -0.57, which is an improvement, but still a strong downtrend. I'm going with the forecaster; I'm not sure the buck is out of the woods just yet.

Crude fell -0.04 [-0.07%] to 55.42, basically unchanged. The doji candle was neutral, and the forecaster moved up +0.12 to -0.24; that is still a downtrend for crude. The last few days has the feeling of a dead cat bounce for crude.  I suspect the downside move for crude may not be over. I say this mostly because of the COT report, which shows a large number of managed money longs, and an equally large short position by the commercials – which is not something you want to see if you're betting on a rally.

The article from Al Jazeera that claimed the whole “anti-corruption” drive in Saudi Arabia was all about a shakedown (sheikdown!) has some reinforcement from the FT (via oilprice.com): https://oilprice.com/Geopolitics/Middle-East/Saudi-Sheikdown-Arrested-Royals-Offered-A-Deal-Your-Money-For-Your-Freedom.html

Executive summary: if you're a Saudi billionaire, and you're a current guest of the Ritz Carleton in Riyadh, you must cough up up to 70% of your net worth, and you can go free. My guess: if we use rules for rulers as a roadmap, the current raft of billionaire-beneficiaries of the Saudi corruption network are either being swapped out, or the new controller of the network is levying a “membership fee” to allow the existing beneficiaries to remain on the gravy train.  It probably depends on how much you pay, and the deal you negotiate.  With hundreds of billions at stake, they are all playing "Let's Make a Deal."

"Corruption isn't some kind of petty crime, but a tool of power...in democracies and dictatorships."  And, pretty clearly, in Kingdoms too.

SPX rallied hard, up +21.02 [+0.82%] to 2585.64. That's a swing low (56% reversal). Forecaster jumped +0.43 to -0.10; that's not a buy signal just yet. SPX closed back above its 9 MA. Tech led (XLK:+1.40% along with staples (XLP:+1.38%) while energy trailed (XLE:-0.40%). The sector map looked relatively bullish. Is the brief downtrend over? Maybe so.  This could well be because of the success of the Tax Reform legislation in the House. We'll have to see if there is follow-through tomorrow. 

VIX plunged -1.37 to 11.76.

TLT fell hard today, dropping -0.87%, printing a swing high/bearish tasuki line pattern, which has a 44% chance of being a (bearish) reversal. TLT forecaster dipped -0.19 to +0.40. Is this the top for TLT? Today's move is suggesting risk on.

JNK screamed higher today, up +0.93% printing a very strong swing low (80% reversal) off yesterday's high rated spinning top reversal. That's a win for the candle code. Forecaster also screamed higher, up +1.23 to +0.41, which a buy signal for JNK. It still remains in a longer-term downtrend, so its probably not a good idea to chase this rally, but today's move is definitely risk on.

CRB fell -0.21%, with 4 of 5 sectors falling, with livestock (-0.68%) falling most. PM was the sole sector that moved higher (+0.10%).

In the PM space, today was uneventful. However, in the rest of the market, it was a day for risk on: there was a strong rally in equities and junk debt, and a roughly equal drop in the bond market.   That's money sloshing from one market to the other.

We're still waiting for a clearer picture on where the metals go next.

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1 Comment

Cold Rain's picture
Cold Rain
Status: Gold Member (Offline)
Joined: Jul 26 2016
Posts: 364
Happy Friday

What's the deal with metals today?  Nice run.  Nice move in miners too.

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