PM Daily Market Commentary - 7/15/2014

davefairtex
By davefairtex on Wed, Jul 16, 2014 - 2:36am

Gold was down again today, dropping -13.80 to 1294.00 on heavy volume, while silver was down -0.22 to 20.74 on moderately heavy volume.  After yesterday's big down day, gold rallied modestly in Asia and London, only to be sold hard in NY trading; at 10:55 EDT sellers managed to push prices below yesterday's low, which triggered a burst of selling driving gold to 1292.

Gold tried rallying after that, but failed, closing near the lows of the day.  Gold did manage to find support at the 50 MA, which also happened to be the 50% retracement point from the high of 1348.

However, in spite of the downside move, there is some good news.  During the recent move down, silver has been doing relatively well: in a downdraft one generally expects silver to sell off harder than gold, but that isn't happening.  The gold/silver ratio has been holding steady at 62.41, unchanged after two days of heavy selling in PM.  That's an indicator that the uptrend remains in place.

The ratios GDX:$GOLD and GDXJ:GDX aren't doing quite as well as gold:silver, but neither have they broken down.  Both ratios remain above their respective 20 day EMAs, which is still a "risk on" posture.  That's positive as well.

The USD moved up strongly today, closing up +0.21 to 80.43, moving back up above its falling 200 MA.  The buck seems to be struggling for direction right now; a rising dollar will make it harder for gold to rally.

The miners had a bad day today; GDX was off -3.08% on heavy volume, and GDXJ was down -4.34% on very heavy volume.  Miners were doing well right up until gold was driven through support at 1055 EDT, at that point miners just followed gold lower.  Once GDX moved below its support level of 26.50, that was pretty much all she wrote for the rest of the day.  There is some support for GDX at 25.50, but it looks like GDX is following gold's lead right now, and so if gold continues dropping tomorrow, likely GDX will also.

SPX closed down -4 to 1973, with the VIX moving up a bit to 11.96.  The broad equity market seems unsure of where it wants to go right now, although SPX remains above its 20 EMA so it is still very much in a bull mode.

Bonds dropped a bit, off -0.20% but remain above their 20 EMA and still look bullish overall.

Brent crude may have put in a reversal today; at one point it was down $3 to 104.40, but it rallied strongly back; it was off only -0.83 to 106.02 by end of day.  Brent crude is off $10 in 3 weeks time.

It occurs to me if I were plugged into the plans of ISIS, I could buy a serious number of oil futures in advance of the attacks, wait for the attacks to peak, and then sell - with the plan being to fund the group with the profits I made.  Sometimes the market just knows stuff in advance, bids the price up beforehand, and then the insiders sell the news - while the clueless public (you and me) buy the "sure thing" near the top, only to see the expected big move vanish before our eyes.

"How come oil isn't going up even though Iraq is in such strife?"  That's one explanation anyway.  Sure it could be a Fed Plot, but it could also be smart people within ISIS who are making money from their inside knowledge of plans and the timing.

Its not like they'll get arrested for insider trading or anything.

 

3 Comments

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1469
"It occurs to me if I were

"It occurs to me if I were plugged into the plans of ISIS, I could buy a serious number of oil futures in advance of the attacks, wait for the attacks to peak, and then sell - with the plan being to fund the group with the profits I made."

I am sure this is why we have the constant cycles of violence in M.E.   How much money are the insiders/enablers making from opium production in Afghan???  Ollie North anyone???

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1469
A detailed exposé on how the market is rigged from a data-centri

http://www.nanex.net/aqck2/4661.html

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5683
nanex guys

Kugs-

Those Nanex guys kick butt.  Two thumbs up, as they used to say before the thin one passed away.

It is beyond unfair when one set of traders get a faster data feed than another set.  "I'll take the slow feed, please.  I don't mind trading off stale data and having my orders front-run."

Pilfering indeed.  Hopefully IEX ends up eating these people's lunch, crushing them like bugs, etc.

 

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