PM Daily Market Commentary - 10/28/2014

davefairtex
By davefairtex on Wed, Oct 29, 2014 - 1:45am

Gold rose +2.70 to 1228.00 on moderately heavy volume, while silver rose +0.08 to 17.18 on moderate volume.  PM was generally positive today - it rallied early and then spiked up hard at 0830 EDT on a "soft" durable goods report, but sold off as the day wore on, keeping only a small amount of gains by the close.  The spike higher blew through the EMA-9 and stopped out a bunch of shorts, but it was clear that the longs were not interested in chasing prices higher and dropped back down by end of day.  Bottom line: another failed rally for gold & silver.  That's bearish.

The dollar dropped again today, closing down -0.15 to 85.45.  Even though the buck has dropped for the past three days, gold has dropped too, suggesting that gold has been especially weak recently.  Today gold managed to rally, but the rally was very modest.  Lately, not even a dropping dollar has lifted gold, which is really quite bearish.

Mining shares rallied strongly today, gapping up at the open, retreating, and then rallying for the rest of the day, closing at or near the top of the day's range.  GDX was up +2.09% on moderate volume, GDXJ was up +4.23% on moderately heavy volume.  Something got into the mining shares today - I don't know what it was, and neither mining ETF has managed to rise above its EMA-9 just yet, but both ETFs definitely had bids, even though both gold and silver had failed rallies.  Yesterday's losses were wiped out.  Still, I'm still waiting for the mining ETFs to cross their EMA-9 before celebrating.

SPX started rallying in the futures markets prior to the open, had a bit of trouble on the soft durable goods report at 0830 EDT, but shook that off to rally for the rest of the day, closing up +23.42 to 1985.05, catapulting over the 50 MA and is now 25 points away from breaking out to a new all time closing high.  No doubt today's rally sent a bunch of shorts scampering for cover.  Might we see new highs?  We might.

Long term treasuries (TLT) dropped -0.63%, continuing the long bond's retreat from the massive peak set two weeks ago.  The strong performance in SPX no doubt sucked money out of the bond market.  JNK traded sideways today; while it is hinting at "risk off", SPX doesn't seem to be paying attention.

Commodities rose +0.69%, closing above the EMA-9 for the first time in several weeks.  WTIC rose +0.91 to 81.58, while Brent was up +0.20 to 86.03.  Although the oil futures chart still looks quite bearish, the related energy equities did quite well today - energy was the best performing sector.

Its a confused picture right now - gold weak, miners may be recovering, oil equities doing well, oil still in a downtrend, and SPX rallying strongly.

FOMC meeting ends tomorrow, with the market-moving minutes release scheduled for 1400 EDT.

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