PM Daily Market Commentary - 6/25/2018

By davefairtex on Tue, Jun 26, 2018 - 2:23am

Gold fell -3.80 [-0.30%] to 1267.30 on moderately light volume, and silver dropped -0.13 [-0.82%] to 16.32 on heavy volume. The buck fell -0.26%; for gold to drop when the buck falls is a bad sign for PM. The other metals did poorly too, as did US equities, most likely on concerns over tariffs.

Gold bounced around in a fairly narrow trading range, attempting to rally after the close in Asia but ultimately failing. The candle print was a neutral-looking long black candle, and the forecaster inched up +0.02 to +0.01, which was a very tentative buy signal for gold. On the other hand, gold in Euros was hit hard, dropping -0.88%, making a new low, and falling below its 200 MA. I don't much like the look of the GC.EUR chart. Gold across-the-pond is not looking very good right now, in spite of all the Swiss refiners' kilo bars ordered by our friends in Asia.

COMEX GC open interest rose 2,359 contracts.

Rate rise chances (September 2018) fell to 73%.

Silver more or less tracked gold, but didn't do nearly as well. Silver's long black candle was neutral, but the forecaster fell -0.14 to -0.01, which is a tentative sell signal for silver. Silver's plunge today wiped out the gains from Friday's rally.  A drop below the previous low of 16.20 would be bad news, and a close below 16.10 could lead to a whole lot of selling.  Silver is in dangerous territory, and if the industrial metals keep plunging, they might just drag silver right through support.

COMEX SI open interest rose by 3,201 contracts today.

The gold/silver ratio rose +0.41 to 77.65, which is bearish.

Miners fell, with GDX off -0.77% on moderate volume, and GDXJ dropped -0.79% on moderately light volume. Both ETFs printed bearish haramis, which had a 32-44% chance of being a bearish reversal here. XAU forecaster dropped -0.18 to +0.03, which is quite close to a sell signal. XAU has yet to make a new low, but it is not far away from doing so.

The GDXJ:GDX ratio fell slightly, and the GDX:$GOLD fell also. That's bearish.

Platinum fell -1.13%, palladium dropped -1.55%, and copper moved down -1.44%. That's a pretty bad day for the other metals, including new lows for both copper and palladium, while platinum is being tugged back down to re-test the previous low. The other metals do not like the idea of real tariffs - copper especially - which is down more than 10% over the past 2 weeks.

The buck fell -0.24 [-0.26%] to 93.94. It appears that the buck is following through off last week's swing high. I don't have a reason for the move lower, except maybe just the buck being tired after a 10-week rally. The weekly is inching ever closer to a sell signal, while the monthly remains in an uptrend.  The Euro rose +0.37%, up for the third day in a row.  The Euro might have double-bottomed here, at least that's what the chart is suggesting, although I'm not quite sure why.  Perhaps it is because Italy hasn't blown up just yet.

Crude fell -1.09 [-1.57%] to 68.19. Crude's bearish harami was only mildly bearish, with a 29% chance of being a bearish reversal. Forecaster fell -0.32 to +0.44, which is still a reasonably strong uptrend. Crude remains in an uptrend in all 3 timeframes.  I think crude was just taking a rest after Friday's big rally.  The underlying supply fundamentals suggest that the glut is gone, and it will stay gone mostly due to the implosion of Venezuela's oil industry.  The OPEC meeting just cemented this into place.

SPX plunged -37.81 [-1.37%] to 2717.07.  Some of the drop came in the futures markets overnight, but the vast majority of the plunge happened during the trading session, with the selling starting right at the open.  There was a bounce in the last 30 minutes which result in a 20 point recovery right at end of day.

SPX sector map shows cyclicals (XLY:-2.17%) and tech (XLK:-2.08%) led the market lower, while utilities (XLU:+1.66%) did best. That's a bearish-looking sector map. China's SSEC fell -1.07%, avoiding a new low, while Germany's DAX plunged -2.46%. While the US gets taxed on Harley Davidson, Germany gets hit with tariffs on BMW, Mercedes Benz, and Volkswagen.  You have to like that trade-off if you're Trump.

Amusingly, the two big exporters (EU, and China) met and mutually agreed to fight protectionism, although there were some disagreements on the particulars.  “The cats got together and agreed that the canaries of the world should stand still and stop flying off so rapidly when they approached.”

VIX rose +3.56 to 17.33. Volatility is starting to more seriously increase.

TLT rose +0.22%, making a new multi-month closing high. TY also climbed, rising +0.10%, which is also a new high. Bonds don't seem to be rallying that enthusiastically to the sell-off in equities.  Perhaps that's because the buck is now dropping, which suggests money is leaving the US. The 10-year treasury yield fell -2.5 bp to -2.87%.

JNK fell -0.22%; the pace of the decline in JNK is starting to increase somewhat. JNK's cousin, HYB, plunged -0.81%, making a new low that dates back to mid-January 2018. That's another day of risk off from the high yield sector.

CRB fell -1.11%, with all 5 sectors moving lower, led by livestock (-2.58%). That's more damage from the threatened tariff regime; unhappy news for agriculture, livestock, and industrial metals, with a sideswipe at PM and energy.

Tariffs are bad for PM, that's what I've concluded from watching prices move in recent weeks.  They aren't great for the buck either, and they are terrible for industrial metals, especially copper.

So how will the tariff thing play out?

China appears to be willing to test Trump, while the sense I get is that Europe will probably cave.  Those German automakers are really exposed, their spines don't appear to be nearly as stiff as the folks over in China, and I'm hearing noises that they are currently offering to drop all tariffs on autos.  That's a 2.5% reduction on our side, and a 10% reduction on theirs.  If this happens, it would be a major political victory for Trump; it would show he was right to "threaten our allies" to obtain a fair trade deal, with the only cost being some temporary consternation to US manufacturers who were targeted by the EU.

Even Mish has to like that outcome.

If and when the tariff fights come to an end, we should expect copper to scream higher.  Theoretically, that should help silver too, and probably gold also.  How long will this take to play out?  Merkel is teetering on the edge of losing her job; this may be a battle she can't afford to fight right now.  My guess is, the EU could cave within the week.

China may be a different story.  We'll have to see how that one plays out.  But if the EU caves, pressure on China will increase, and domestic pressure on Trump will drop - strengthening his hand.

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davefairtex's picture
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5787
what did Peter Strzok do?

Here's an article I ran into on The Hill about who Peter Strzok is, and what he did.  It was pretty cool.  Then I tracked the author to her own website.

As former top FBI official Peter Strzok faces congressional requests to testify, it’s worth examining who he is.  Strzok is the subject of what I see as one of the most damaging conclusions in the Department of Justice (DOJ) inspector general report:

As the nation’s top FBI counterespionage official, he indicated “a willingness to take official action to impact [Donald Trump’s] electoral prospects.”

Well now.   Apparently she read that IG report more thoroughly than I did.  The guy leading both Clinton Email and Russian Collusion investigations indicated a willingness to take action to interfere with the electoral process.  Boy I'd sure like to see what's on those missing texts.  Maybe he should look on the NSA's big data center in Utah.  They have them for sure.  They have everything else.


So then I went to her front page, and saw this article she wrote about catching the US government breaking into her computer:

Forensics reports showed sophisticated remote monitoring of my devices over an extended period of time that included a keystroke monitoring program, surreptitious use of Skype to listen in on my audio and exfiltrate files, the planting of classified documents on my CBS laptop, access to the CBS corporate computer system, remote efforts to erase the spyware (once discovered) and delete their tracks, downloading of spyware attached to an otherwise innocuous hotmail email, use of a BGAN satellite terminal in the remote access, specific times and dates of entry, hacking and monitoring of my social media accounts, and much more.

If the government is monitoring her, she's gotta be making them nervous, right?  Might be worth following.

cmartenson's picture
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 6060
She got lucky...
davefairtex wrote:

If the government is monitoring her, she's gotta be making them nervous, right?  Might be worth following.

If she was a dude she probably would have had child porn installed too.  I'm really wondering abou the Vault 7 guy...

That's quite an impressive list of hacks and tricks being used against her, and she's really not all that significant of a threat or interest compared to, say a vital UN delegate, powerful Senator, or corporate executive in a sensitive industry.

Her experience really screams  out that electronic intrusion and infiltration/snooping is just SOP.

"Hey Jimmy, why don't you run package #3 on subject Y?"



Michael_Rudmin's picture
Status: Diamond Member (Offline)
Joined: Jun 25 2014
Posts: 1000
Putting two and two together...

Hmm... considering all the Vault seven programs and what they were; and that they hadn't gotten out into the wild until recently; and the hacking methods being the same,

It makes me think that the Carbanak heist well might have been the CIA, no different than the russian Mafia; and hiring Russians as the mules would be their style.

Considering the Mena drug running, getting money on the side ALSO would be their style.

But who could ever bring the world's biggest crime wave to justice?

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