PM Daily Market Commentary - 3/28/2016

davefairtex
By davefairtex on Tue, Mar 29, 2016 - 2:01am

Gold rose +5.10 to 1221.80 on moderately light volume, while silver rose +0.05 to 15.25 on light volume.  Both gold and silver were hit early in Asia, with gold making a new low at 1206.00, but buyers showed up pushing prices back into the green.  A softer dollar helped.  Mostly, it seemed like traders were still on holiday; volume was low in most everything I track.

The spike lower during the Asia session appeared to be a relatively low intensity probe of the kind we always see during downtrends for gold and silver.  It looks as though some player was trying to see if gold had any buyers down in its support zone.  Turns out, gold did, and price bounced back within a few hours.  However, the low volume tells me that we should probably not read too much into today's activity.

Not much happened in silver today; it followed gold lower, but avoided making a new low.  It then tried to rally, but failed.  This resulted in a low volume spinning top candle - about as boring a day as you can get.  No change in trend, no new information.

Trading in the miners was relatively subdued today also; GDX fell -0.21% on very light volume, while GDXJ dropped -0.30% on light volume.  GDX remains perched above 19 support, but the nascent downtrend remains intact.

Platinum fell -0.29%, palladium dropped -0.94%, while copper rose +0.25%.  Low volumes all around.

The dollar fell, losing -0.23 to 95.94, closing just below its 9 EMA.  The dollar printed a bearish engulfing pattern - a reversal pattern suggesting a top - but my code suggests that the chances are low (22%) we will reverse here.

WTIC fell -0.29, trading in a relatively narrow range on low volume, along with most everything else.  Oil remains below its 9 EMA, in the early phase of a new downtrend.

SPX rose +1.11 to 2037.05.  It too traded in a very narrow range on the day.  VIX rose +0.50 to 15.24.

TLT climbed +0.13%, slowly moving higher after finding support last week on its 50 MA.

JNK fell -0.50%, making a new low and generally looking fairly disagreeable especially given the light volume everywhere else.  JNK signals risk off.

CRB rose today, up +0.22% - not too surprising given the modest dollar weakness.

If you get the sense not much happened today, you'd be right.  No changes in trend on anything - the only possibly interesting move was in junk debt, but even that was fairly modest.  I think we'll have to wait for the traders to come back from what was clearly a long weekend before we get any more information.

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davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5418
Chair Yellen: Its Party Time!

In a speech today, Chair Yellen was once again dovish, saying "caution in raising rates is especially warranted" and that the Fed had "considerable scope" for stimulus if needed.

Gold immediately popped $12; SPX took off, as did TLT.  Buck is off a big -0.64, spiking lower.  Dollar chart is looking fairly ugly at the moment.

GDX is up +3.71% on the rise in gold.

I wouldn't be short gold right now - mostly because of the buck.

What might she be thinking of when she says "considerable scope?"  Negative rates?  My sense is, gold would go absolutely nuts if that happened.

http://www.streetinsider.com/ETFs/Yellen%3A+Fed+has+Considerable+Scope+for+Stimulus+If+Needed%3B+Caution+in+Raising+Rates+Especially+Warranted/11455195.html

In related news, FRB's GDP Now dropped the Q1 GDP estimate from 1.4% to 0.6% - that was yesterday.  That's a huge drop.  Q1 is starting to look uglier and uglier.

"Considerable scope."  Hmm.....

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