PM Daily Market Commentary – 12/29/2015
Gold was unchanged at 1068.50 on light volume, while silver rose +0.02 to 13.94 on light volume. Both metals tried to rally, but the rallies failed. We can't blame commodities today; they did well.
Gold remains below its 9 EMA, and now appears to be in a shallow downtrend. It needs a close above that downtrend line or else it will eventually break down to test the 1045.40 low. The move below the 9 EMA is somewhat worrisome.
Silver's weak rally attempt after getting pounded yesterday suggests that there are few buyers at the COMEX for silver right now. Most everyone is on vacation.
GDX rose +1.16% on light volume, and GDXJ climbed +1.18% on light volume also. GDX is now back above its 9 EMA, and will soon resolve a wedge pattern which will probably result either in a breakout to the upside through the 50 MA, or a breakdown through the 9 EMA that ends up testing the Nov low. Miners remain relatively bullish compared with gold, and so that's a positive sign.
The buck climbed +0.17 to 98.17; it attemped a more substantial rally but faded somewhat by end of day. The dollar remains in a medium term downtrend, and is below its 9 EMA and 50 MA.
SPX rallied strongly today, climbing +21.86 to 2078.36, managing to close above its previous high at 2076.70. It also closed above its 50 MA. These two acts together with yesterday's rebound are starting to suggest some strength in SPX. Equities really need a close above 2104 to put an end to the downtrend, but today's rally suggests that might actually happen. VIX fell -0.83 to 16.08.
JNK rallied +0.68%, is back above its 9 EMA, and looks to be forming a bullish ascending triangle pattern. That's a hint of risk on from JNK.
Bond ETF TLT was crushed, dropping -1.66% and dropping below all 3 moving averages. Bonds did not like the equity rally; this move also supports the risk on case for equities.
CRB rallied +1.65%, a nice move, and it remains above the 9 EMA. Don't look now, but commodities have rallied 5 of the last 7 days. Pulling back to the weekly timeframe the move doesn't look all that impressive, but at least the downhill slide has been stopped and in the short term, CRB is now trending higher.
WTIC rallied +0.64 [+1.74%] to 37.33. The rally would have been more substantial, except for the API report that came out at 16:30 Eastern which said that oil inventories rose 2.9 million barrels – versus an expected drop of 1 million. Oil immediately dropped 70 cents following that report. Oil is really struggling to move higher here; it needs a close above the previous high of 38.28 to get things started, and a close above 40 resistance to start making the shorts nervous.
The US Natural gas ($NATGAS) rally is starting to slow down; it was up only +0.05 [+2.30%] to 2.32. Natgas is now clearly above its 50 MA, but it is starting to look a bit overbought on the daily chart.
Right now momentum is carrying PM towards a retest of the lows. I keep talking about that COT report, but so far it hasn't seemed to have any impact. It should at some point, but it hasn't yet. I'm not sure we have happy news before the new year. Computer is still short oil, gold, and silver, but is now long equities once more.
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Last week's CoT was released this afternoon and showed a fair amount of deterioration; Commercials adding shorts/Covering longs, MM the opposite.
Granted, the data is now almost a week old (Captured last Tues 22 Dec) and has likely improved since then.
Platinum is at a 9 year low. I'm wondering if it will keep going down. Probably a buy.