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PM Daily Market Commentary – 11/4/2019

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  • Tue, Nov 05, 2019 - 04:27am

    #1

    davefairtex

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    PM Daily Market Commentary – 11/4/2019

Gold fell -4.44 [-0.29%] to 1517.92 on moderate volume, and silver fell -0.06 [-0.33%] to 18.16 on moderately light volume. The buck rallied [+0.32%] along with SPX [+0.37%] and crude [+0.55%], while bonds fell [10Y yield rose +5.8 bp].

Gold drifted lower in a narrow range today; the short black/NR7 candle was unrated, and forecaster fell hard, and remains just barely in an uptrend. Gold remains in an uptrend in all 3 timeframes.

COMEX GC open interest rose +8,503 contracts. That’s 4 days of global production in new paper.

Futures are projecting an 8% chance of a rate cut in December.

Silver moved sideways with a lower bias; the spinning top candle was a bullish continuation, but forecaster fell, dropping into a downtrend. Silver is still in an uptrend in the weekly and monthly timeframes.

COMEX SI open interest rose +1,865 contracts. That’s 4 days of global production in new paper.

The gold/silver ratio rose +0.03 to 83.59. That’s neutral.


Miners fell all day long; GDX dropped -1.75% on moderate volume, and GDXJ fell -1.57% on light volume. XAU fell -1.34%, the long black candle was a bullish continuation, and forecaster moved lower but remains in an uptrend. XAU remains in an uptrend in all 3 timeframes.

The GDX:gold ratio fell -1.46%, and the GDXJ:GDX ratio rose +0.18%. That’s bearish.


Platinum fell -1.52%, palladium dropped -1.64%, while copper moved up +0.06%. The drop in platinum was surprisingly strong; the moves in gold and silver were tame by comparison.

The buck rallied +0.31 [+0.32%] to 97.13. The bullish engulfing pattern was quite bullish (51%), and forecaster moved higher but remains in a slight downtrend. The buck remains in a downtrend in both daily and weekly timeframes.

Large currency moves include: GBP [-0.40%], EUR [-0.33%], JPY [-0.34%], AUD [-0.35%].

Crude moved up +0.31 [+0.55%] to 56.57. The doji star candle was somewhat bearish (36%) and forecaster moved lower but remains in an uptrend. Crude remains in an uptrend in all 3 timeframes.

SPX rose +11.36 [+0.37%] to 3078.27. All of today’s gains came in the futures markets overnight. The gap up doji was a bullish continuation, and forecaster moved higher, into a strong uptrend. SPX remains in an uptrend in all 3 timeframes.

Energy led (XLE:+3.26%) along with industrials (XLI:+1.16%), while utilities (XLU:-1.28%) and REITs (XLRE:-1.12%) did worst. This was a bullish sector map.

VIX rose +0.53 to 12.83.

TLT plunged -1.32%, the short black candle was bearish, and forecaster plunged into a downtrend. The 30-year yield rose +6 bp to 2.27%. TY fell also, losing -0.38%, the swing high pattern was bearish (45%) and forecaster dropped into a downtrend. TY is now in a downtrend in all 3 timeframes. The 10-year yield jumped +5.8 bp to 1.79%.

JNK rose +0.16%, the doji candle was a bullish continuation, and forecaster jumped back up into an uptrend. -0.34%, the closing black marubozu was a bearish continuation, and forecaster fell into what is now a strong downtrend. JNK is now strongly signaling risk off. BAA.AAA differential is now at +87 bp. Credit concern remains modest at best.

CRB jumped +0.45%, 3 of 5 sectors rising, led by energy (+0.99%).

It was a moderate risk-on day, with crude and SPX rising, while PM and bonds fell. The new all time high in SPX – it is tough to be a short these days, what with $51 billion in new cash printed up just last week that needs to be “put to work” by our friendly banksters.

Don’t fight the Fed, they say. Maybe: don’t fight money printing. $51 billion is a lot of new cash. And after 10 long years of experience with money printing, we know by now what it does: it drives up asset prices, and steals money from savers.

What disaster is the Fed trying to cover up with all that printing?  That’s the big unknown.  It could be something pretty exciting.  Wolf Richter thinks it might be some hedge fund borrowing in the overnight markets to fund long term debt purchases.  Seems right to me. 

Related: Wolf’s article on CLOs, with an example of a company that had to go BK when (re)funding was cut off.  Could funds with these “assets” in them be borrowing in the overnight market to fund their super-crappy debt purchases?  https://wolfstreet.com/2019/11/04/leveraged-loan-downgrades-spike-collateralized-loan-obligations-clo-get-cold-feet-trigger-selloff-b-rated-loans/

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  • This topic was modified 2 weeks, 1 day ago by davefairtex davefairtex.
  • Tue, Nov 05, 2019 - 05:41am

    #2
    pieffe

    pieffe

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    Reply To: PM Daily Market Commentary – 11/4/2019

Hy Dave… the is some problem on your charts…It appears truncated on the right side…

Thanks

  • Tue, Nov 05, 2019 - 08:14am   (Reply to #2)

    #3

    Penny551

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    re: Reply To: PM Daily Market Commentary – 11/4/2019

The charts are cutoff on the right margin when viewed on a mobile device or tablet.  I believe it began a week or so ago.

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