PM Daily Market Commentary - 9/21/2015

By davefairtex on Tue, Sep 22, 2015 - 12:42am

Gold fell -6.50 to 1132.60 on light volume, while silver rose +0.03 to 15.18, also on light volume.  Gold broke lower a few hours before US market open, and never really recovered.  The dollar had an immense rally on the day, and that likely hurt gold to some degree.

Gold is encountering a bit of trouble at 1140, but so far the selling is low volume.  It actually did pretty well given the strong dollar rally.  Gold in euros rallied +0.42% on the day, so gold's drop was just a currency effect.

Silver is still moving slowly higher, but it did not manage to make a new high today.  Low volume, not much price movement; not much happened today in silver.

Miners did not like the strong dollar; GDX dropped -3.31% on moderate volume, while GDXJ dropped -3.09% on moderately light volume.  Senior miners are now back below the 50 MA.  I have noticed that the mining shares tend to be a lot more sensitive to moves in the buck.  If the dollar continues rallying, its probably bad news for miners.

The USD rocketed higher today, up +1.04 to 96.03, closing back above the 200 MA and more than erasing the post-Fed meeting move.  A bunch of Fed "hawks" gave speeches over the weekend about how they really wanted to raise rates; another more centrist member said that it was a close decision from his viewpoint.  Market is responding - Fed managed to avoid raising rates, while still getting the market to backtrack on its response.  Faith in the Fed remains unchanged.  Continued dollar strength will probably send the miners right over the cliff, and right now the buck looks quite strong.

SPX rose +8.94 to 1966.97; SPX was up around the 1980 level in the morning, but the rally mostly failed. VIX fell -2.14 to 20.14.  Put premiums have really decayed since the panic of three weeks back.

Bond ETF TLT sold off again today, dropping -1.63%.  Long bond is now back below its 50 MA and its 9 EMA.  It just can't seem to catch a break.

The CRB (commodity index) rallied +1.37%, a great performance on a day when the dollar rallied strongly.  CRB has moved back into its recent trading range, the danger of a breakdown averted for now.

WTIC (oil) rallied as well, climbing +1.40 to 46.72, and has now moved back above its 50 MA.  OIl remains well above 44 support; if it can close above 48, we might see another burst of short covering.  Oil equities are definitely not believers in the rally, as the XLE:$WTIC ratio has plummeted for the past 5 weeks, and the ratio dropped -2.44% just today.

HAA has 100 oz gold bars right now in NYC at 1158.04/oz [+2.26% over spot], and 1000 oz silver bars in NYC at 15.75/oz [+3.78% over spot].   Eagles in NYC are quoted at 20.54 [+35.35% over spot].  Premiums on the big bars fell, but Silver Eagle premiums continue to rise.

Although gold fell in dollars, it rose in Euros; gold's drop today was a currency effect.  Miners however don't like a rising dollar.  My computer still likes gold, but is short term bearish on silver and crude.

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