PM Daily Market Commentary - 7/16/2014

By davefairtex on Wed, Jul 16, 2014 - 7:43pm

Gold rebounded today, rising +6.20 to 1300.20 on moderate volume; silver was up +0.09 to 20.83 on moderately light volume.  Gold rose slowly throughout the trading day, at one point hitting a high of 1305 but could not hold its gains.  The light volume rally off gold's 50 MA is not particularly convincing to me, I was hoping for something more definitive.

Silver had a nicer looking print today - it almost printed a hammer candle off a spike down this morning at around 0820 EDT.  Silver touched 20.63 at one point, but rebounded nicely.  If the volume was better, I might be willing to call it a possible low; it wasn't though.

The USD was up strong again today, closing +0.19 to 80.62; perhaps the dollar has figured out where it wants to go now.  The euro is having difficulties right now, and that's why the dollar is doing well.  This will make life a bit harder for gold.

The miners were mixed today; GDX closed up +1.94% on moderate volume, while GDXJ was down -0.05% also on moderate volume.  When a relatively lighter volume smaller rally follows a heavy volume big downside move, its generally a bad sign.  Also, GDXJ dropping on a day when GDX is up - that's not good either.  I'm not saying the uptrend is over - just that there is probably more downside ahead for this correction.

Gold could keep moving higher now and that would probably rescue everything, but that is a relatively lower probability outcome.  My favorite outcome for tomorrow: a nasty spike down that stops out a bunch of longs which is then bought.  Give me a nice high volume doji or hammer candle and I'll feel a lot more secure that the low has been set.

SPX was up +8 to 1982; it looks like another all time high is coming soon.  VIX dropped to 11.

Bonds rose today as well - TLT closed up +0.53%.   My sense is, money is flowing into the US: USD up, TLT up, SPX up all in the same day.

Brent crude rallied today, confirming yesterday's high volume rebound, closing up +1.15 to 107.17.  


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