PM Daily Market Commentary – 3/11/2019
Gold fell -5.09 [-0.39%] to 1298.04 on heavy volume, while silver fell -0.04 [-0.26%] on moderately light volume. The buck moved slightly lower [-0.11%], while SPX rallied hard [+1.47%]. Something lit a fire under equities today at market open, but I’m not quite sure what the cause was.
Gold chopped lower today, with perhaps half of the losses possibly influenced by the rally in equities: starting at about 9:30 am, gold moved lower as equities took off. The bearish harami was actually just a bullish continuation, while gold forecaster moved higher into its uptrend. Today’s move didn’t change the trend at all; gold remains in an uptrend in both the daily and monthly timeframes.
COMEX GC open interest jumped +9,529 contracts today.
Futures are showing a 1% chance of a rate cut in March, and an 13% chance of a rate-cut by December. The market has pulled back from some of its December bearishness – possibly due to Fed Chairman Powell’s interview with 60 minutes that aired on Sunday, where he stated – well he stated lots of things, but maybe what the market heard is that the expansion could continue, albeit at a reduced pace this year.
Silver moved lower along with gold, but the pull wasn’t as strong, and there was an end-of-day rally that managed to pull silver back up to almost even. The doji candle was unrated, and forecaster moved higher into an uptrend. Silver remains in a downtrend in all three timeframes.
COMEX SI open interest fell -393 contracts.
The gold/silver ratio fell -0.11 to 84.67. That’s slightly bullish.
Miners sold off at the open, but rallied back after the selling pressure eased, erasing much of its losses. GDX moved down -0.36% on moderate volume, while GDXJ dropped -0.90% on very heavy volume. XAU fell -0.64%, the bearish harami candle was actually a bullish continuation, and forecaster moved higher into its uptrend. XAU remains in an uptrend on the daily and monthly timeframes. It looks as though traders bought the morning dip – I think that’s a good sign.
The GDX:$GOLD ratio rose +0.03%, while the GDXJ:GDX ratio fell -0.54%. That’s somewhat bearish.
Platinum rose +0.04%, palladium jumped +1.44%, while copper climbed +0.21%. palladium dropped -0.58%, while copper fell -0.21%. Platinum appears to be trying to put in a low, palladium may be setting up for another breakout to new highs.
The buck fell -0.11 [-0.11%] to 96.67, pulling back from the breakout attempt last week. Today’s short black candle was a bullish continuation, while forecaster moved a bit lower, but remains in an uptrend. The buck remains in an uptrend in all 3 timeframes.
Today’s major currency moves included: GBP [+1.07%]. May went to visit Juncker, and came back with a document that purported to be “legally binding” that “clarifies” the exit agreement, allowing the UK to withdraw unilaterally at some point in the future. Is this enough to get Unconditional Surrender past Parliament? Its hard to say. GBP thinks – maybe so.
Crude climbed +0.76 [+1.35%] to 57.25. Crude moved steadily higher for most of the day, closing near the highs. The candle print was a swing low which was very strong (62% bullish), and forecaster moved higher into an uptrend. Crude remains in an uptrend in all 3 timeframes.
SPX jumped +40.23 [+1.47%] to 2783.30. The move started right at 9:30 am, and equities moved relentlessly higher all day long, closing at the highs. The swing low candle print looked very strong (68% reversal), and forecaster issued a tentative buy signal. The move was just enough to pull SPX back above all 3 moving averages. That said, the weekly forecaster issued a long-awaited sell signal; this puts SPX into an uptrend in the daily and monthly timeframes.
Sector map had tech (XLK:+2.15%) leading, while utilities (XLU:+0.71%) brought up the rear. This was a reasonably bullish sector map.
VIX fell -1.72 to 14.33.
TLT fell -0.30%; the bearish harami wasn’t a reversal, but forecaster did drop fairly sharply. TLT remains in an uptrend, but not by much. TY fell -0.07%, a minor move; the short black candle was a bullish continuation, and forecaster fell, but remains in a reasonably strong uptrend. Today’s drop in bonds was not enough to reverse trend; TY remains in an uptrend in all 3 timeframes. The 10-year treasury yield rose +1.8 bp to +2.64%.
JNK climbed +0.28%, with the swing low candle print a likely bullish reversal (62% chance), and forecaster issued a buy signal. Like SPX, JNK is back into an uptrend.
CRB fell -0.10%; 3 0f 5 sectors fell, led by agriculture (-0.92%).
Equities were the big winner today – I have no idea what caused it, and neither did anyone else that I know. Rate futures are less bearish, JNK got a bid, oil moved higher, and bonds retreated, at least a little. Risk on is back, at least for now.
Still, gold didn’t see much selling pressure, and the miners showed a strong bid after the initial selling pressure had passed. The new daily uptrend in gold and the miners remains intact. We will have to see if this new equity move has legs to it.
And of course there is the ongoing economic difficulty in Europe. As that grows worse, the Europeans probably step up and buy more gold. It sure beats the negative return they get on their Euro deposits.
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