PM Daily Market Commentary - 8/13/2015

By davefairtex on Fri, Aug 14, 2015 - 3:58am

Gold fell -10.80 to 114.20 on moderately heavy volume, while silver fell -0.11 to 15.39 on heavy volume.  Gold more or less slowly sold off all day long, while silver sold off and then rallied back.  Silver even remained above its 50 MA at end of day, which was a positive sign.

The sell-off in gold was not entirely unexpected, as gold had moved up for 5 days in a row and was getting a bit overbought.  The lower volume and the relatively gentle nature of the selling suggests just a correction within the context of an uptrend.  Gold needs to avoid a close below that 9 EMA, currently at 1105.

Silver has been going up for the last 7 days, and its sell-off was even more contained.  Silver actually printed a hammer candle, which says that traders were willing to buy the dips even after the 7-day uptrend.  That looks relatively bullish to me.  As long as silver closes above that 9 EMA (15.08), the uptrend will be intact.

GDX sold off hard, dropping -5.67% on heavy volume, losing almost all the gains made yesterday.  The volume was not quite as heavy as yesterday's up-day, but the miners performed a lot worse than gold.  GDXJ dropped -6.24% on extremely heavy volume.

After 5 straight days, a little selling is expected.  Unfortunately, this was a lot of selling, and it has me a little concerned.

The USD closed up +0.17 to 96.46.  The strong Retail Sales report at 08:30 EDT was only good for a brief blip higher most of which was given back.  Although the commentators are suggesting that this unexpectedly positive report most likely cements a Fed rate rise in September, the buck seems unimpressed.

SPX traded in a range today, closing down -2.66 to 2083.39.  The good Retail Sales report didn't impress the equity market either; when markets don't rise on what should theoretically be good news, its generally a bad sign.  What's more, the rally off yesterday's big bullish rebound was nonexistent.  That's a bad sign too.  VIX is 13.49 - perhaps a bargain.  SPX is above the 200 MA, but below the 50 MA and 9 EMA, in a sort of "no mans land".  Based on the relatively weak dollar, and the poor reaction to the Retail Sales report, I think we go lower, more likely than not.

Bond ETF TLT fell too, dropping -0.32% but remaining above its 9 EMA, at least for now.  Bonds remain in a strong uptrend, above all 3 moving averages, although momentum is beginning to slow.

The CRB (commodity index) fell -0.54%, just barely setting a new low today.  While momentum has slowed for commodities (MACD has turned up, and we have a bullish divergence in RSI - TA-speak for "momentum has slowed to the point where rebounds sometimes happen"), commodities continue to move slowly lower.

WTIC (oil) sold off yet again, dropping -1.11 [-2.56%] to 42.20, dropping below the March 2015 low of 42.41, which means we have to go back to 2009 to find a previous low.  That's not a good sign; WTIC looks weak as a sick kitten.  After breaking support today, there may be some small support at round number 40, and then we're looking at the 2009 crash low of 33.55.  OMG oil in the 30s!  Brent looks stronger - it might have put in a bottom on August 10, and it too had a bullish MACD crossover.   However my computer says: no low yet for WTIC oil.

Gold and silver continue to look pretty good, the miners look a bit fragile, and overall commodities continue to move south, albeit more slowly than before.  Equities look weak - I'd bet on a correction coming soon.  Buck looks weak too, which should aid gold and silver.  All systems are still go for our nascent gold rebound.

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