PM Daily Market Commentary - 7/29/2015

By davefairtex on Thu, Jul 30, 2015 - 12:25am

Gold rose +1.50 to 1095.80 on heavy volume, and silver climbed +0.12 to 14.78 on moderate volume.  Gold traded sideways in a range again, nosing down after market open, and then spiking higher briefly after the FOMC announcement at 14:00.  Silver on the other hand rallied and kept most of its gains.  In addition, silver marked a swing low on the day.

Gold printed a doji once again.  No change in the status of gold's rebound.

As mentioned, silver marked a swing low.  It may not have held onto all of its gains into the close, but the swing low is definitely good news!

Miners had a good day, with GDX up +2.05% on moderate volume, while GDXJ climbed +2.13% on moderately heavy volume.  GDXJ made a swing low too!  Both miner ETFs climbed for most of the day, closing relatively near to their highs.

The dollar rose +0.21 to 97.08; while the move overall wasn't all that dramatic, the buck rose sharply after the FOMC announcement.  There was a lot of tea-leaf reading of the FOMC statement - words added here, words changed there, attempts to suss out probabilities of a rate rise in September (less likely) or in December (unsure).  Don't ask me what they'll do - a few months back, I bet my friend we'd see a rate rise in September, and I think that's a total loser bet at this point.

SPX rallied strongly again today, rising +15.32 to 2108.57, knifing through the 50 MA and generally looking positive - climbing further after the FOMC announcement.  Energy equities was once again the leading sector by far.  VIX fell -0.94 to 12.50.  The commodity rally seems to be supporting equity prices.

Bond ETF TLT fell -0.37%; the equity market rally isn't helping bonds.

JNK had a fantastic day, climbing +0.61%.  JNK had a nice relief rally, most likely because of how oil performed on the day.

The CRB (commodity index) rose +0.54%, climbing nicely for the second day in a row.

WTIC (oil) rose +1.12 [+2.34%] to 48.89.  Oil printed a swing low on the day.  Another swing low!  Oil's big rally happened immediately after the Petroleum Status report at 10:30 EDT, which showed a drop in oil inventories.  This was bullish, but it also just seemed to me like oil was ready to rally given how oversold it was.  Sometimes, the market is just waiting for a reason.  Oil equities formed swing lows yesterday, and continued moving strongly higher today; oil services were up +2.73%, while E&P was up +1.99%, two of the top performing equity sectors on the day.

I have to say, gold is not behaving well.  Everything in creation seems to be printing swing lows, while gold is lagging behind.  Will gold eventually move higher?  Well, perhaps silver will drag it higher.  Its hard to know.  Junior miners are doing well, as is silver.  Copper put in its low yesterday, and oil did so today.  All we can do is watch and wait.

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1 Comment

davefairtex's picture
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5738
gold drop in asia

Looks like 3 days of no serious bid under gold has emboldened the shorts, who hammered gold lower late in the Asian session.  If it can recover that's good, but as of right now gold isn't looking so strong.  This is why we wait for that swing low - for the market to demonstrate there is enough buying to push prices higher before jumping in with both feet.

The COT positioning is definitely set up for a rally but (my opinion) the big banks don't seem like they want to push prices higher at the moment.

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