PM Daily Market Commentary - 4/23/2015

By davefairtex on Fri, Apr 24, 2015 - 4:37am

Gold rebounded +6.70 to 1193.30 on moderate volume, while silver rose +0.09 to 15.85 on moderately heavy volume.  Since the buck fell -0.70% today, the PM rally today can be entirely explained by currency moves; gold in Euros actually fell -0.36%.

After dropping $15 yesterday, the $7 rally is not much of a bounce, especially given the very weak dollar today.  Gold still looks weak.  Adding to this sense, over the past two weeks, the volume on each up-day is much lower than the volume on the down days.  That's always a bearish sign.

The miners looked much stronger than the metals today: GDX rebounded +2.43% on moderate volume, while GDXJ rose +2.56% on moderate volume too.  Miners recaptured almost all their losses from yesterday, regained their 50 MA, and are generally looking substantially stronger than gold or silver.  Miners continue to hold up well even in the face of weak charts in the metals.

The dollar dropped a big -0.68 to close at 97.45, with the drop stopping right around the 50 MA, which has provided support for the buck for the last few months.  It looked to me like the dollar did not like the surprisingly poor New Home Sales report, nor did it like a weak manufacturing index report.  If the dollar plunges through its 50 MA, selling could become general and we could see a substantial correction.

Likely helping this trend is the perception that Greece now has enough money to pay its bills through June, because the central government basically raided the savings accounts of all the Greek cities.  That's a trick that will only work once.

SPX broke its previous high today, rallying through 2120 momentarily in the afternoon before falling back to close up +4.97 to 2112.93.  The sell-off into the close didn't look great.  VIX dropped -0.23 to 12.48.  Why did SPX rally today, while the dollar fell?  That I don't know.  The moves higher in SPX were not tied to economic reports that I could see.

Bond ETF TLT staged a tepid rally, rising +0.43% - this after dropping almost 2% yesterday.  Bonds continue to look weak.

The CRB (commodity index) rose +1.37%, snapping a 4-day losing streak.  Commodities remain in their short term uptrend.

WTIC rose +1.26 to 57.48.  Brent did even better, marking a new cycle high and closing up +1.99 to 64.73.  Oil continues to slowly recover from its big drop, and it is leading commodities higher.

We might be seeing a correction in the buck in the near future; this should help gold and silver to some degree.  Based on performance, the miners might benefit the most.

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