PM Daily Market Commentary - 2/22/2018

davefairtex
By davefairtex on Fri, Feb 23, 2018 - 2:32am

Today, gold rose +7.50 [+0.57%] to 1334.10 on moderately light volume, while silver climbed +0.11 [+0.67%] to 16.59 on very heavy volume. The buck fell today [-0.31%] which definitely seemed to help PM and a number of other commodities to move higher.

Gold chopped sideways until about 8 am, and then took off roughly alongside the Euro, which rose almost a full point over a 3 hour period. Gold didn't do quite as well, but still managed to close near its highs for the day. The candle print for gold was a low-rated bullish engulfing, which was a bearish continuation.  GC forecaster was much more optimistic, rising +0.42 to -0.10.  Still, the volume today was a bit light, which isn't really what you want to see on a reversal day.  Perhaps that's why the candle code wasn't so enthusiastic.

COMEX GC open interest rose 1,531 contracts today.

Rate rise chances (March 2018) remained at 83%.

Silver tracked the Euro too; it started moving higher at 8 am and managed to keep most of the gains through the close.  Today was a long white candle – but it was an inside day with no candle rating assigned. Forecaster moved up just +0.01 to -0.25; no change in direction for silver.  Silver did manage to move back above its 9 MA today, which is a positive sign, as is the heavy volume.  Trend remains down.

COMEX SI open interest fell -1,701 contracts today.

The gold/silver ratio fell -0.08 to 80.42 That's slightly bullish.

Miners gapped up at the open, rallied briefly, but then sold off for the remainder of the day, closing at the lows. Intraday, the miners really looked weak, since they were dropping as gold itself was climbing. GDX fell -0.28% on light volume, and GDXJ lost -0.03% on light volume also. XAU forecaster jumped +0.44 to +0.01, which is a buy signal for the miners. What's up with that? I have no idea. Today's candle looked bearish to me (as did the behavior intraday) but GDX and HUI forecasters both thought today was bullish too.

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

Platinum rose +0.68%, palladium climbed +1.48%, while copper rose +1.05%. The charts of the other metals look reasonably good; all 3 rallied, which is generally supportive for PM. Perhaps that's why the miner forecaster did well.

The buck fell -0.28 [-0.31%] to 89.39, after rallying 3 days out of 4. Candle print was a low-rated bearish engulfing - a bullish continuation. Forecaster moved up +0.08 to +0.16. JPY was the big mover, up +0.94%.  It will take more than one day to change direction for DX.

Crude shot higher, up +1.31 [+2.14%] to 62.65. Mostly this was due to a bullish-looking EIA report [crude: -1.6m, gasoline: +0.3m, distillates: -2.4m] that came out at 11:00 am. Immediately after the report, crude launched higher, and held most of its gains through end of day. Forecaster jumped +0.29 to +0.27, which is a buy signal for crude. Yesterday's sell signal was just a headfake, and I think the light volume yesterday was the tell.  Yesterday's weak swing high was invalidated by today's new high.

SPX rose +2.63 [+0.10%] to 2703.96. SPX rallied along with crude oil, but it encountered selling and ended up losing almost all its gains by end of day. Forecaster thought his was bearish, and dropped -0.38 to -0.32, which is a sell signal for SPX. Energy did best (XLE:+1.10%) while the financials did worst (XLF:-0.83%). Although energy was the leader, it actually gave up more than half its gains, printing a shooting star candle on the day. For whatever reason, energy equities can't do well even on a strong day for crude oil. That's not a good sign.  Perhaps it is based on the fear that the rapidly rising US crude production will soon overwhelm the OPEC production cuts.

VIX fell -1.30 to 18.72.

TLT rose +0.30%, with all of its gains coming on a gap-up open. In spite of the move higher, TLT continues to look weak. TY moved up +0.19% - it appears to be (once again) trying to form a low. 10-year treasury yield fell 2bp to 2.92%.

JNK was flat; it tried to rally but failed. JNK forecaster dropped -0.34 to -0.02, which is a sell signal for JNK. This suggests risk off.

CRB rose +0.56%, with 4 of 5 sectors moving higher. Best sector was energy (+1.46%) - almost all crude oil.

The fall in the buck took the pressure off PM and the other metals.  Miners aren't so enthusiastic, however, and they are sometimes the tell as to where we go next.  Buck remains in an uptrend, and gold in a downtrend.

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