PM Daily Market Commentary - 5/21/2015

davefairtex
By davefairtex on Fri, May 22, 2015 - 3:28am

Gold fell +3.00 to 1206.30 on moderate volume, while silver rose +0.06 ot 17.16 on light volume.  Gold and silver dropped about 45 minutes prior to the US market open, but managed to recover by end of day, with silver outperforming gold.

There were a slew of economic reports released today:

  • Jobless Claims [positive]
  • Chicago Fed National Activity Index [negative]
  • PMI Manufacturing Index Flash [negative]
  • Bloomberg Consumer Comfort Index [negative]
  • Existing Home Sales [negative]
  • Leading Economic Indicators [positive, except for manufacturing].

My summary?  Manufacturing is doing poorly, housing is mixed (building permits were up strongly, but existing home sales look weak), and employment and non-manufacturing (i.e. services) industries are doing relatively well.

Miners fell today, with GDX off -0.70% on very light volume; GDXJ dropped -0.96% on very light volume too.  Senior miners continue to look relatively weak, and now the juniors are starting to feel the effects too.  Things could get unpleasant if the junior miners uptrend line is broken.  Why is this?  Well traders interested in "buying the dip" tend to show up at these lines.  If there isn't enough buy-the-dip money, then the balance shifts to the sellers, and we could get a series of big red candles with high volume as the longs bail out.

The buck fell modestly, dropping -0.18 to 95.33; it was off more during the London trading session, but it rallied during NY. 

SPX (US equities) rallied +4.97 to 2130.82.  Equities have been trading in a very narrow daily range for the past three days, seemingly unsure if it wants to continue breaking higher.  VIX plummeted today, dropping -0.77 to 12.11 - the lowest close for the VIX since December 2014.  Perhaps this is just traders selling off their puts post-SPX breakout.

Bond ETF TLT rallied strongly today, up +1.40%, marking a swing low, and closing above its 9 EMA.  TLT appears to be trying to put in a low.

The CRB (commodity index) rallied today, up +0.80%, slowly recovering from its loss earlier in the week.

WTIC (west texas crude) did quite well, jumping +1.92 [+3.27%] to close at 60.68, regaining the ground lost during the sell-off earlier this week.  Oil needs a close above the previous high at around 62.60 to keep the uptrend alive, but there does appear to be a strong bid underneath the market.  Traders seem ready and willing to buy the dips in oil.  Sorting out truth from propaganda is tough right now; while oil production in the US appears to have peaked, that won't last long if oil is even marginally profitable at these levels given the 5,000 well fracklog just waiting to come online.

Things still are in a holding pattern right now; the buy-the-dip scenario is still in play.

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