PM Daily Market Commentary – 10/18/2017
Gold fell -4.30 [-0.33%] to 1282.70 on moderate volume, while silver dropped -0.03 [-0.18%] to 17.02 on moderate volume also. A falling dollar appeared to keep PM from declining more rapidly.
Gold continued dropping for a third day in a row, making a new low to 1278.60. The long black candle was a bearish continuation, and the forecaster continued falling, losing -0.16 to -0.51. Given that the Euro rallied +0.22% on the day, the move down in gold was actually a bit worse than it appeared.
COMEX GC open interest fell -3,071. Ka-ching!
Rate rise chances (Dec 2017) remains at 92%.
Silver fell alongside gold but was slightly more resilient. Silver made a new low to 17.01, and silver’s print was a high wave candle (also a bearish continuation), but silver’s forecaster actually rebounded, up +0.19 to -0.28. Viewing silver intraday, it definitely felt a bit stronger than gold. Its neat that the forecaster picked that up.
Open interest in COMEX SI contracts fell by -23.
The gold/silver ratio fell -0.12 to 75.39. That’s somewhat bullish.
Miners drifted lower; GDX fell -0.38% on light volume, while GDXJ dropped -0.91% on very light volume. Prints for both ETFs were NR7 candles; GDX was a doji/NR7, and GDXJ was a closing black marubozu/NR7. Forecaster liked the prints; GDX +0.12 to -0.30, GDXJ +0.05 to -0.41. Those are still downtrends, but the projected pace of the downtrend is slowing. The pair of NR7 candles could be indicators of a strong movement coming tomorrow, but the direction is uncertain.
Today, the GDXJ:GDX ratio fell, as did the GDX:$GOLD ratio. That’s bearish.
Platinum fell -1.46%, palladium plunged -2.51%, while copper dropped -0.81%. Both palladium and platinum are now in steep downtrends (forecasters PL: -0.55, PA: -0.56), while copper’s forecaster just issued a sell signal (-0.06 down -0.47 on the day). The other metals are starting to look iffy. While copper and palladium are near their highs, platinum’s plunge has taken it back below all 3 moving averages. The pace of the platinum drop suggests we may see new lows for platinum in the near future. That doesn’t bode so well for gold & silver.
USD fell -0.13 [-0.14%] to 93.15. The buck rallied during the day, making a new high to 93.57, but the rally failed, and the buck printed a shooting star candle which had a 44% chance of being a reversal. Forecaster fell too, dropping -0.17 to +0.07. The dollar uptrend seems to be stalling out. That should limit the damage in PM.
Crude rose +0.09 to 52.22. Crude made a new high to 52.53, but ended up losing most of the gains. Print was a spinning top/doji, which might be a reversal (32%). Forecaster dropped -0.10 to +0.22. Resistance at 52 remains quite strong; on the chart, we may be seeing a double top forming. Even a relatively bullish-looking EIA report (crude -5.7m, gasoline +0.9m, distillates +0.5m) did not seem to move the needle in terms of prices; crude sold off right after the report was released, and only managed to struggle back to slightly above even by the close.
SPX rose +1.90 to 2561.26. That’s another new all time high. Financials led (XLF:+0.53%) while energy did worst (XLE:-0.70%). Those energy equities – especially the oil services sector – are unwinding a chunk of their recent gains. They seem to be suggesting oil won’t make it past 52.
VIX fell -0.24 to 10.07.
TLT plunged -0.66%, printing a swing high (reversal 48%) and dropping its forecaster a massive -0.82 to read -0.56. TLT is back in a downtrend. The plunge in bonds started right at the end of the Asia trading session (in the futures markets) and continued through the morning in the US. I’m not sure what that’s about, but it was a pretty big move. Perhaps I should be watching the 10 year treasury futures (TY) instead of the TLT ETF, since it trades 23 hours a day.
JNK rose +0.05%, making a new high, but printing a spinning top candle which had a 46% chance of being a reversal – probably due to a relatively large upper shadow. Forecaster liked it though, moving up +0.14 to +0.46. That’s a short-term uptrend for JNK.
CRB dropped -0.13% today,with 3 of 5 sectors falling, led by agriculture (-0.37%). CRB is still close to its recent highs, and remains above all 3 moving averages. Longer term, CRB is still trying to recover. The long term CRB:SPX chart remains at near all-time lows.
While the PM downtrend continues, it doesn’t seem to be falling at any sort of breakneck pace. While there is selling pressure, it doesn’t seem to be too severe – not in the senior miners, and not in silver, which seems to have buying support at round number 17. Gold remains under pressure, as do the junior miners.
The dollar also doesn’t seem eager to move higher. That reduces the pressure on PM too.
We have that ECB meeting coming up next week. If we get some good news about tapering, that would probably be Euro positive.
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So after that swing high yesterday, bitcoin sold off hard – only to be met with a ton of buying. Candle print was a doji star, which got a 67% chance of being a reversal. It was a very high rated reversal bar.
Even ETH, which has been lagging bitcoin pretty heavily, produced a spinning top which the code gave a 60% chance of being a reversal.
Forecasters have moved more heavily into a downtrend, but they tend to lag by a day.
I'm calling this a probable reversal – for bitcoin. I'm less sure about ETH, which has now dropped below both the 9 MA and the 50 MA.