PM Daily Market Commentary – 11/21/2017
Gold moved up +3.90 [+0.31%] to 1280.10 on heavy volume, and silver moved up +0.05 [+0.33%] to 16.94 on heavy volume also. Both gold and silver tried to rally after yesterday’s big smash, but the rallies largely failed.
Gold’s candle print was a bullish harami, but the code felt it was a bearish continuation. Gold forecaster dropped -0.21 to -0.39. Today’s very modest rally looked a bit like a dead cat bounce. Sometimes that leads to an intense sell-off the following day or two. In the chart below you can see the pattern I’m concerned about: big drop (Friday), dead cat bounce (today), and more selling tomorrow.
COMEX GC open interest fell by -17,921 contracts – 55 tons of paper gold vanished. Wow. What could that be about?
Rate rise chances (Dec 2017) remain at 92%.
Silver looked a lot like gold, attempting to rally but failing. Candle print was also a bullish harami which was actually a bearish continuation, and silver’s forecaster dropped -0.16 to -0.52. Dead cat bounce here too. Silver’s chart looks weaker than gold’s chart, because of the uptrend line break.
COMEX SI open interest rose by +2,771 contracts.
The gold/silver ratio fell -0.02 to 75.57. That’s neutral.
The miners rallied too, with GDX up +0.80% on moderate volume, and GDXJ up +0.60% on moderate volume also. The forecasters show that the juniors and seniors are starting to diverge: GDX +0.28 to +0.05 (buy), GDXJ -0.15 to -0.45 (downtrend). GDX managed to close back above its 9 MA today, which is a positive sign. Mostly, miners continue to move sideways, with the juniors looking a bit worse.
Today, the GDXJ:GDX ratio fell, while the GDX:$GOLD ratio rose. That’s neutral.
Platinum rallied +1.16%, palladium rose +1.05%, and copper moved up +1.33%. It was a reasonably good day for the other metals; both palladium and copper are back in uptrends, and platinum’s recovery was substantially better than that of gold or silver.
The buck fell -0.13 [-0.14%]. In spite of the drop, the spinning top candle was rated a bullish continuation, and the DX forecaster jumped +0.36 to -0.04. That all suggests strength rather than weakness, even though the buck retreated somewhat. Looking at the EUR/USD, I’m seeing downtrends in both the weekly and monthly timeframes, so that reinforces the sense that the buck should probably be moving higher.
Crude rose +0.71 [+1.26%] to 57.09. Prices rose in fits and starts for much of the day, with the API report at end of day popping prices an extra 25 cents into the close. API was surprisingly bullish: crude draw (-6.4m) gas build (+869k) distillates draw (-1.67m). The 57 level was resistance last week; a close significantly above 57 should cause the usual short covering rally. Candle print today was an opening white marubozu (bullish continuation), and the forecaster moved up +0.10 to +0.51, which is a fairly strong uptrend. Oil equities may still be languishing a bit, but the commodity is doing well right now. Oil is now at multi-year highs.
We have the EIA report tomorrow, and an OPEC meeting coming up Nov 30th.
SPX jumped +16.89 [+0.65%] to 2599.03, which is a new all time high for SPX. This validates the forecaster buy signal from a few days ago. Print today was an opening white marubozu: bullish continuation. Forecaster up +0.30 to +0.52, which is a reasonably strong uptrend. Tech led (XLK:+1.05%) along with sickcare (+0.85%), while energy brought up the rear (XLE:+0.22%). This was a bullish-looking sector map.
VIX was crushed, dropping -0.92 to 9.73. We are back to single digits for the VIX. Selling volatility wins again, as it has for months and months now.
TLT rose +0.32%, breaking out to a new high. Candle was a spinning top: 39% reversal. Forecaster moved up +0.28 to +0.57, which is a strong uptrend. The 10 year looks different; it was largely unchanged today, and remains in a downtrend. The yield curve looks to be flattening – I suspect the divergence between TLT and TY is money is moving from short-duration bonds to the long end of the curve. A flattening yield curve and new highs in SPX don’t exactly match.
JNK rose +0.19%, making a new high. Print was a short white/spinning top, which was a bullish continuation. Forecaster fell -0.08 to +0.55, which is still a strong uptrend. JNK didn’t do as well as I would have expected, given the strong rally in equities today.
CRB rose +0.33%, with 5 of 5 sectors moving higher. Industrial metals did best, rising +0.71%, followed by energy (+0.53%) and PM (+0.53%).
PM continues to chop sideways – viewing the charts, there appears to be some danger of a larger sell-off.
Still, commodities overall are doing relatively well. If energy continues to rally, that should help gold and silver. Same thing with industrial metals.
FOMC minutes release tomorrow at 2:00 PM. Tomorrow should be a quiet day leading up to the Thanksgiving holiday on Thursday.
Note: If you’re reading this and are not yet a member of Peak Prosperity’s Gold & Silver Group, please consider joining it now. It’s where our active community of precious metals enthusiasts have focused discussions on the developments most likely to impact gold & silver. Simply go here and click the “Join Today” button.
BTC- $ 8,205
ETH- $ 377
ETC- $ 17.85
LTC- $ 71.00
I certainly am.