PM Daily Market Commentary - 3/22/2016

davefairtex
By davefairtex on Wed, Mar 23, 2016 - 4:29am

Gold rose +4.70 to 1248.80 on moderate volume, while silver rose +0.03 to 15.90 on moderate volume.  Gold tried rallying today but mostly failed - it was much the same with silver.

Gold's rally today failed - ran into selling - right at the downtrend line, a logical place for the shorts to attack.  Gold was not even able to close above the 9 EMA.  Unless gold can close above the downtrend line soon, the most likely path for gold is probably lower.  Next support for gold is 1226, the low made the day before the FOMC meeting.

GLD tonnage was unchanged today.

Silver remains above its 9 EMA - it is chopping sideways near its recent high.  Two "spinning top" candles underscore the indecision with silver.  It remains in an uptrend in spite of the COT report.

Miners went nowhere again today, with GDX up +0.05% on very light volume, while GDXJ climbed +0.84% on moderately light volume.  Both miner ETFs, like silver, are chopping sideways near the highs, above the 9 EMA, but the light volume and spinning top candle prints suggest uncertainty as to direction.

Platinum rose +1.44%, palladium climbed +0.32%, and copper was up +0.22% - copper appears to be consolidating above its 200 MA for the past three days.  That's potentially bullish for copper.

The dollar rose for the third day, up +0.34 to 95.64; the string of up-days has almost wiped out last Thursday's big sell-off.  The buck does not seem to be directly affecting gold just yet as viewed from the intraday charts, but if the buck is entering a new uptrend, that will impact commodities to some degree; it may also impact sentiment for gold too.  Gold longs get nervous when the dollar rallies.

WTIC fell -0.40 to 41.22.  Oil was unable to rally today, selling off, then recovering, then selling off into the close.  WTIC is chopping sideways just below the 200 MA - not true for CLJ16; that's a puzzle for me.  Which "oil" should I use for my TA, continuous futures, or the current front month contract?  Normally its not much of an issue, but the front month contango has been $1 to $1.50 for many months now, which wangs the charts around.  If we assume "oil" is the (continuous futures) WTIC, the consolidation below the 200 looks potentially bullish; supposedly, the longer a consolidation below a particular moving average takes, the more likely it is to break through.  Theory is, the shorts come in when it first hits the 200 and they unload, but if they don't end up moving prices lower, that means the bulls are stronger and are willing to absorb all that selling even at these elevated prices.  The longer that continues, the more that eggs on the longs.

I kind of felt WTIC would sell off after it moved above 40, but that's not what happened.  A trader I respect once said that your emotions can become allies if - instead of blindly following them, you use them as clues as to what the rest of the players are probably feeling, fade them, and then consider doing the opposite.  Emotionally it is hard for me to imagine and/or buy oil here, but the chart patterns are hinting in that direction, and momentum indicators are still signaling "all systems go"...we will see what happens after tomorrow's Petroleum Status Report at 10:30.  If there is a drop down to the 9 EMA following the report, it might make a decent buy entry point for those imagining that oil could move higher from here.

SPX basically went nowhere again today, down -1.80 to 2049.80, making a new high but then selling off into the close.  My code tells me SPX printed a long legged doji - indecision.  Most sectors were actually down, with only healthcare moving higher.  VIX rose +0.38 to 14.17.

TLT opened higher, but then sold off all day long, ending down -0.02% coming to rest just below its 50 MA.  Even with today's poor showing, TLT looks as though it might be starting to move sideways, MACD tells me that downside momentum is starting to ebb, and - could TLT be sniffing out a top in equities?

JNK fell -0.14%, printing a swing high but for now remaining above its 9 EMA.  According to MACD and RSI, momentum for JNK is waning.  It is starting to hint at risk off.

CRB rallied today, up +0.43%, a decent showing given the dollar rally.  CRB remains in an uptrend, above its rising 9 EMA and 50 MA, which also has started to turn up.

I'd suggest gold would probably move lower after today's action, but I'd be cheating; in Asia, gold has already sold off, down $14, hitting a low point of 1231 so far - almost back to the point where gold was immediately prior to the FOMC release last week.   Silver is down too, off -0.21 to 15.67.  Gold needs to find support - those COMEX buyers need to appear around 1226 (the prior low) or else things could get more unpleasant.

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6 Comments

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5418
dollar rally => gold, silver, oil down

Its an ugly day out there, that dangerous-looking COT report is finally having its way with both gold and silver.  My sense is, first the ECB and then the FOMC saved gold two weeks running, but now that the buck is bouncing back, the air is leaving the tire in a hurry.

So far, no buyers at COMEX for gold or silver.  Or oil, for that matter.

Boy, that gold chart looks unpleasant.  Maybe some support at 1200...and then there's a whole lot of "air" underneath...

Penny551's picture
Penny551
Status: Silver Member (Offline)
Joined: Nov 8 2012
Posts: 154
Rob Kirby rumor

JimH,

I picked up on what Kirby was saying last week also, and my first thought was that if Kirby knows about it, so does JPM,etc and I suspect the regulators would give them the "courtesy" of advance notice so as to get themselves out from under their massive short position ahead of time...perhaps even get net long so as to profit from their "punishment" since PM would rise w/ such news.

   *This is a carry-over from yesterday's thread where JimH noted how Rob Kirby is saying that a large banking entity will be imminently facing charges of PM rigging.  He's extremely long/vague on speculation and short on details, of course.

Personally, I've gotten all spun up about these type of rumors too many times over the past few yrs only for nothing to come of it and have become numb to them by now.  Who knows...maybe this time will be different, but I'm not holding my breath.

 

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2385
Agree Penny...

Yes, There would be no way that Kirby would know without the bullion banks knowing.  What we are seeing today may in fact be the final dump whereby the banks get back on the long(er) side of the COT.  Then again, maybe Kirby is getting smoke blown up his is behind...and this is just another rinse/repeat cycle...  I am open to that possibility. 

Kirby is smart enough and connected enough that it's worth noting - and if it comes to pass, I don't want Dave to be able to say, "if your pundit has information you should bring it out before that thing happens".... or something like that  : )  

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5418
kirby gets credit...if...

Jim!  Thanks for wrapping the context around your Kirby post!

Kirby is smart enough and connected enough that it's worth noting - and if it comes to pass, I don't want Dave to be able to say, "if your pundit has information you should bring it out before that thing happens".... or something like that  : )

Indeed we would not.  He gets full credit if JPM ends up...what were they supposed to be doing this cycle, again that was different?  Ah right.  Someone was going to be charged with ... something.

One of the things I wish we had was a version of snopes for all the goldbug writers out there.  Dates and a short blurb about what they predicted, the final outcome of that prediction, an accompanying price chart, and any explanation they gave as a result of any failure in prediction that might have occurred.  If no explanation was given, we can just assume "FED MANIPULATION!"  :-)

This might be instructive to aid all the goldbug newsletter readers in their quest to find the most accurate guru to follow.  Or, like Fox News, accuracy could be ignored, and they could simply be viewed as entertainment, and/or a scapegoat provider, a comforter during bear markets, and a steady stream of confirmation bias.

I like Jim Grant.  He's both intelligent AND honest.  Rare as hen's teeth.

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1616
Prosecuting insiders

In a world where an employee of the Fed (in a negotiated guilty plea to a misdemeanor) just got 1 year probation and a $2,000 fine (and, oh, 200 hours of community service) for stealing secret Fed information and selling ("giving") it to a TBTF bank, I'm hard pressed to believe that any megabank would be seriously prosecuted for rigging precious metals.  And IF prosecuted, would said bank pay a fine any bigger than 10% of the profits they made off said rigging (eg. a $100 million fine on a $1 billion illegal profit)?  Don't make me laugh.

Hitlery hasn't been indicted for clearly violating laws regarding national security.  Maybe the FBI will eventually (in this decade) recommend an indictment to the Department Of inJustice.  Maybe the DOiJ will actually indict her.  Maybe she will be convicted (in the 2020's when we can all say, "What difference does it make now?").  But never in my imagination would she get anything but the proverbial slap on the wrist.

However, when/if we do reach a tipping point on society's general acceptance of public corruption, there will be Hell to pay.  Then the pendulum will swing to the other extreme and it will be a different kind of ugly than we have today.  I can't wait.  sad

"Welcome to the Hunger Games. And may the odds be ever in your favor."

Penny551's picture
Penny551
Status: Silver Member (Offline)
Joined: Nov 8 2012
Posts: 154
Downside Targets?

Anyone care to stick their neck out on a downside target in Gold?  I'm watching the 200DMA (~$1190) and the 50DMA (~$1140) and around $17 on GDX (200DMA), but w/ the CoT structure the looking the way it does I wouldn't be surprised if they can get it even lower.   

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