PM Daily Market Commentary - 5/10/2018

davefairtex
By davefairtex on Fri, May 11, 2018 - 2:00am

Gold rose +9.00 [+0.69%] to 1321.80 on very heavy volume, and silver jumped up +0.23 [+1.39%] to 16.75 on moderately heavy volume. The buck fell -0.41% - printed a swing high, forecaster sell signal – the whole nine yards. Most of the metals celebrated by staging reasonably strong rallies.

Gold rallied steadily for most of the day, moving higher alongside the rising Euro. Candle print was a swing low (62% reversal), and while the forecaster was happy (+0.12 to -0.07) it was not enough to generate a buy signal for gold.

COMEX GC open interest rose 12,786 contracts. That's a large increase.

Rate rise chances (June 2018) remain at 100%.

Silver moved higher along with the rest of the metals. Candle print was a long white/bullish continuation, and forecaster jumped +0.45 to +0.44, which was a buy signal for silver. Today's move took silver through the 50 MA, making a new high and stopping right around the 200 MA. Silver is looking quite strong.

COMEX SI open interest rose by 4,440 contracts today.

The gold/silver ratio fell by -0.55 to 78.94. That's quite bullish.

Miners rallied along with the metals, with GDX up +1.41% on moderately heavy volume, and GDXJ jumped +2.03% on heavy volume. Both miner ETFs made new highs, with the junior miners looking particularly strong. XAU forecaster jumped +0.25 to +0.01, which is a buy signal for XAU – just barely. XAU also managed to close above the 200 MA, which is a bullish sign.

The GDXJ:GDX ratio moved higher, as did the GDX:$GOLD ratio. That's bullish.

Platinum rallied +1.34%, palladium shot up +2.39%, and copper rose +1.58%. All the other metals had great days – certainly their moves helped gold and silver to move higher. All three metals have moved into strong uptrends after today's price action. The reversal in the buck appeared to be a key driver in metals prices today.

The dollar fell -0.38 [-0.41%] to 92.28. The buck fell pretty much all day long, with a particularly brisk drop right before the US market opened. Candle print was a swing high (60% reversal), and the forecaster dropped -0.31 to -0.17 – a sell signal for the buck. The pause in the dollar rally has really provided some relief for the metals.  If the buck drops below the 9 MA, that's bearish.

Crude edged up +0.15 [+0.21%] to 71.37. Crude tried rallying, then dropped, and then rallied once more. Forecaster looked reasonably happy, up +0.14 to +0.56. Its hard to know what today's move means; my technicals suggest that crude remain in an uptrend.

SPX rallied +25.28 [+0.94%] to 2723.07. Today's rally took SPX above the upper downtrend line – this is a strongly bullish sign. SPX is now in an uptrend in all 3 timeframes. Utilities led (XLU:+1.41%) while cyclicals trailed (XLY:+0.36%). What's going on with utilities? I have no idea. The chart for tech (XLK) looks quite strong – maybe about to break out to new highs. That's a bullish sign.

VIX fell -0.19 to 13.23.

TLT rallied +0.81%, printing a swing low (69% reversal), forecaster issued a buy signal too. TY rallied +0.17%, however the TY forecaster only moved up +0.10 to -0.67. TY doesn't seem to be confirming the TLT reversal. The 10-year treasury closed at 2.97%.

JNK rallied +0.22%, forecaster moved up +0.20 to +0.29.

CRB rallied +0.40%, making a new multi-year closing high. 4 of 5 sectors rose, led by PM (+0.85%).

The reversal in the buck has definitely helped both industrial metals and PM.  Its hard to know if the move will continue; rising US rates should draw money back to the US over the longer term.  Near term, we might see a further move down in USD.

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1 Comment

Michael_Rudmin's picture
Michael_Rudmin
Status: Platinum Member (Offline)
Joined: Jun 25 2014
Posts: 807
Could you do a study on...

... volume swing frequency?

What I mean is this: as I see it, we are getting a lot of very high volume up, high volume down in short order. So my question is: when you see a 128-day FFT of volume weighted change, how does that predict moves?

Does it predict moves at all?

Does it imply that the next 2-standard-deviation shift in price is a strong trend (up or down)? Or not?

I don't know if my questions are the right questions, but I hope I've conveyed the idea.

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