PM Daily Market Commentary - 4/14/2016

By davefairtex on Fri, Apr 15, 2016 - 1:29am

Gold fell -14.80 to 1229.30 on moderately heavy volume while silver dropped just -0.05 to 16.18 on very heavy volume.  Gold was hit early in Asia by a $10 down-spike, managed to rebound, but then sold off during the London and NY sessions.  Silver proved much more resilient; it was hit too, but it bounced back and closed relatively strongly.

Gold drove through the 9 EMA and closed just below its 50 MA.  There do appear to be buyers at the 50, but I don't think that will last very long.  The right shoulder of the H&S pattern is forming more clearly now; a break of the "neckline" could lead to a precipitous drop lower.  Risk continues to increase for gold longs.  I expect more spikes may well appear.  The commercials have a big short position, and they are motivated to pounce on any perceived weakness.

Today, silver was much stronger than gold - silver sold off in Asia too, but buyers showed up and pushed prices almost back to green.  To underscore this, the gold/silver ratio fell -0.68 to 75.95; the ratio has done nothing but drop for the last five trading sessions.  Silver remains well above its 9 EMA.

Here's something odd: my code has identified today's candle pattern for silver as a "bearish tasuki line" with a 75% chance of marking a reversal.  This is not what I would expect - to me the chart looks a lot stronger than that.  It will be interesting to see if my code sees something that I do not.

After yesterday's swing high, the miners continued dropping today, with GDX off -2.92% on heavy volume, while GDXJ fell -3.02% on moderately heavy volume.  Miners did manage to find support at the 9 EMA, but I don't think this will last if gold continues to fall.

Platinum fell -0.88%, palladium rose a big +3.25%, while copper fell just -0.16%.

The USD continued to move higher off yesterday's big rally, rising +0.15 to 94.91.  Today's trading range was wider than that, however, and I noticed that silver would fall whenever the buck climbed more substantially.  From this, I guess that any sustained rise in the buck may cause a decline in silver prices.

Oil moved largely sideways today, dropping -0.11 to 42.65.  Not much happened today in oil.

SPX was virtually unchanged today, up just +0.36 to 2082.75.  SPX made a new high, but it didn't hold; SPX printed a "northern doji" candle pattern which is sometimes (17.4% chance) a sign of a top.  RSI is showing a bearish divergence as SPX momentum slows down.  VIX fell -0.12 to 13.72.

TLT fell -0.48%; bonds are moving lower in a sort of slow-motion correction.  TLT is below its 9 EMA but is still above the 50 and remains in a longer term uptrend.

JNK was almost flat, down just -0.09%.  JNK is above all 3 moving averages and is in a relatively strong uptrend.

CRB fell -0.50%; perhaps just a rest after four straight up days.

Gold appears to be leading the miners lower, with silver remaining strong for now.  I believe it would take some significant news to reverse direction in PM; at this point, we're in a downtrend and until the market tells us differently, it is probably safer to be watching from the sidelines than jumping in looking for bargains.

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