PM Daily Market Commentary - 4/9/2019

davefairtex
By davefairtex on Wed, Apr 10, 2019 - 6:14am

Gold climbed +6.79 [+0.52%] to 1309.45 on moderate volume, while silver fell -0.03 [-0.20%] to 15.19 on heavy volume. SPX fell [-0.61%], as did crude [-0.23%], but really not much else happened.

Gold rallied primarily during London trading hours, breaking out to a new high and holding most of those gains through to the close. The long white candle was a bullish continuation, and forecaster moved higher into what is now a reasonably strong uptrend. Today's move was enough to unwind the monthly sell signal; that puts gold remains in an uptrend in both the daily and monthly timeframes.  The 1330 level is the next level to watch.  A close above that suggests we could see a more significant breakout - its also a logical place for the shorts to really load up.

COMEX GC open interest jumped 8,318 contracts today. That's 4 days of global production in new paper; a moderately large increase. Shorts are piling in as price rises. That's probably the commercials.

Futures are showing a 3% chance of a rate cut in May, a 39% chance of one rate-cut by December and a 15% chance of 2 rate cuts. That's a small increase over yesterday

Silver tried to rally today but the rally failed, briefly making a new high to 15.31 but then selling off into the close. The spinning top candle was a bullish continuation (i.e. not a reversal), and forecaster moved higher, resulting in a buy signal for silver. Today's move really did look as though it could be a reversal candle, but the candle code says otherwise.  Silver is now in an uptrend in both the daily and monthly timeframes.

COMEX SI open interest rose +2,298 contracts.

The gold/silver ratio jumped +0.61 to 85.87. That's bearish.

Miners gapped up at the open, fell a bit during the day, but then rallied back into the close. GDX rose +0.57% on light volume, and GDXJ moved up +0.62% on heavy volume. XAU climbed +0.21%, the NR7 candle was unrated, and forecaster moved slightly higher, remaining in a mild uptrend. XAU remains in an uptrend in all 3 timeframes.

The GDX:gold ratio rallied +0.05%, and the GDXJ:GDX ratio moved up +0.05% too. That's neutral.

Platinum dropped -1.87%, palladium climbed +0.55%, and copper fell -0.03%. Platinum printed a swing high pattern (48% reversal) that looked pretty unpleasant, and PL forecaster dropped hard but just managed to avoid a sell signal.

The buck fell -0.05 [-0.05%] to 96.45. The short black/spinning top was a bearish continuation, and forecaster dropped deeper into a downtrend.  In spite of the short term move lower, the buck remains in an uptrend in the weekly and monthly timeframes.

There were no major currency moves today.

Commons passed May's proposed BRExit extension plan (through June 30) by a 310 vote margin. May was compelled to bring her plan before Commons by yesterday's historic act ordering her to do so. Tusk suggests that the EU should offer the UK a one-year extension, while France says a year is too long. One Tory suggested that the UK will “elect an army of Nigel Farage Mini-Mes” if the UK is forced to participate in the EU election.  The currency market still continues to project some sort of a soft BRExit. 

Crude fell -0.15 [-0.23%] to 64.17. The spinning top candle was a bullish continuation, and forecaster ticked lower but remains in a strong uptrend. The API report was mixed (crude: +4.1m, gasoline: -7.1m, distillates: -1.3m) and didn't seem to affect prices at all. Crude remains in an uptrend in all 3 timeframes.

SPX fell -17.57 [-0.61%] to 2878.20. Much of the move came in the futures markets prior to the open. The move resulted in a swing high (42% bearish), and forecaster dropped substantially, but remains in an uptrend – at least for now. SPX remains in an uptrend in all 3 timeframes.

Sector map had industrials (XLI:-1.36%) and energy (XLE:-1.22%) leading down, while communications services (XLC:+0.27%) and utilities (XLU:+0.24%) did best. It was a relatively bearish sector map.

VIX jumped +1.10 to 14.28.

TLT rose +0.32%; the print was a confirmed bullish NR7 (48% reversal). TLT might be putting in a low here. TY rose +0.13%, and its long white candle might also be a bullish reversal (35% chance), and forecaster jumped higher, issuing a buy signal for TY. This puts TY in an uptrend in all 3 timeframes. The 10-year treasury yield fell -2 bp to 2.50%.

JNK was unchanged, as was its forecaster. JNK remains in an uptrend.

CRB fell -0.07%, with 2 of 5 sectors dropping, led by livestock (-1.04%).

Gold is slowly moving higher now - it really needs a close above the near-term previous high at 1330. Will this happen?  I see the shorts piling in on the way up, and the volume right now isn't all that heavy.  The miners are moving higher, and that's a plus, but the volume there isn't all that exciting either.

I know that some of us are awaiting the top in equities. Is this it? There is no confirmation from junky debt, so it seems more likely that this is just a 1-3 day reaction move that we've been seeing all along during this current uptrend.  The longer term weekly and monthly charts support this thesis - they both remain in uptrends right now.  I'll show you what I mean on the daily chart:

Armstrong believes that the capital flows from the EU are driving prices of US assets higher, and that the domestic-focused analysts tend to not notice such things, and so in situations like this, they end up making the wrong call.  Its just a thought.

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