PM Daily Market Commentary – 3/19/2019
Gold rose +2.82 [+0.22%] to 1311.54 on [+0.12%] to 1308.72 on very heavy volume, while silver moved up +0.03 [+0.16%] to 15.38 on light volume. +0.06 [+0.39%] to 15.35 on moderately light volume. Crude [+0.93%] and SPX [+0.37%] both rallied, which they have been doing for a while now, but not much else happened today of note. Well, except for yet another all time high for palladium [1541.80]. Again.
Gold didn’t do very much today; the long white candle was a bullish continuation, and forecaster inched higher into an uptrend. Gold’s modest move pulled price above the 50 MA. Gold remains in an uptrend in all 3 timeframes.
COMEX GC open interest fell -2,825 contracts today.
Futures are showing a 1% chance of a rate cut in March, and a 28% chance of a rate-cut by December.
Silver looked about as boring as gold; the short white/spinning top was a bullish continuation, and forecaster moved higher, issuing a buy signal for silver. Silver is now in an uptrend in both the daily and weekly timeframes, and the monthly is right on the edge.
COMEX SI open interest rose +2,166 contracts.
The gold/silver ratio rose +0.07 to 85.16. That’s neutral.
Miners gapped up at the open, but then sold off in the last hour of the day. GDX rose +0.36% on moderately light volume, while GDXJ climbed +0.72% on moderately light volume too. XAU moved up +0.37%; the short black/NR7 candle was unrated, and the forecaster inched higher, but remained in a strong downtrend. XAU remains in a downtrend in the daily and weekly timeframes.
The GDX:$GOLD ratio rose +0.15%, and the GDXJ:GDX ratio climbed +0.35%. That’s somewhat bullish.
Platinum jumped +1.97%, palladium climbed +0.78%, and copper rose +0.24%. That’s yet another new all time high for palladium, platinum managed to jump above its previous high on some really heavy volume, while copper had a bit of a failed rally. All 3 of the other metals remain in uptrends.
The buck fell -0.16 [-0.17%] to 95.79, making a new low today. The short black candle was a bearish continuation, and forecaster plunged deeper into downtrend. The buck ended the day just below its 50 MA. The buck remains in a downtrend in both the daily and weekly timeframes, but it has yet to drop below its previous low, so for now the longer term uptrend remains intact.
There were no large currency moves.
Crude rose +0.04 [+0.07%] to 59.48; while crude made another new high today, it really looked a lot like a failed rally. The bearish doji star might be a reversal (37% chance), and forecaster fell, issuing a sell signal for crude. I guess the forecaster didn’t like that doji very much. Crude remains in an uptrend in the weekly and monthly timeframes.
SPX inched down -0.37 [-0.01%] to 2832.57. SPX rallied in the futures markets overnight, tried to rally more, but then failed, dropping some 20 points from the day highs. The long black candle was mildly bearish (37% reversal), and forecaster moved lower, but remains in a reasonably strong uptrend. SPX remains in an uptrend in all 3 timeframes.
Sickcare did best (XLV:+0.79%) along with consumer discretionary (XLY:+0.50%), while utilities did worst (XLU:-1.14%). That’s a pretty big move for the utility sector; bonds didn’t crater, so it wasn’t an interest rate thing. Neutral secttor map today.
VIX rose +0.47 to 13.56.
TLT fell -0.22%; TLT actually gapped down at the open, and then moved higher as SPX moved down off its highs. Forecaster issued a buy signal. TY dropped -0.06%, and forecaster fell, but remains in an uptrend. TY remains above all 3 moving averages, and is in an uptrend in all 3 timeframes. The 10-year treasury yield rose +1.2 bp to 2.61%.s in an uptrend
JNK moved up +0.08%; it was another day of going nowhere for junky debt. Forecaster moved lower, but remains in an uptrend.
CRB rose +0.20%, which is another new high for CRB. 4 of 5 sectors rose, led by industrial metals (+0.89%).
Apart from the fairly large moves in palladium and platinum, not much happened today.
We have the FOMC announcement tomorrow at 2pm, with a press conference at 2:30. Who knows, maybe Powell will say something interesting. Certainly gold and silver look to be marking time ahead of the meeting. Maybe the Fed will break something loose – but in which direction, I can’t really say.
Given the recent strong move down in the buck, my sense is that gold should have done a bit better, so maybe that’s a bit of a warning sign.
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So the Fed did nothing about rates.
But – they did tell us what they would do about QT – it starts slowing down in May, and ends in September. No more balance sheet roll-off after September. Although the increasing demand for cash means that – very slowly – an increasing demand for USD cash will slowly eat into excess reserves.
Gold seems reasonably happy about this outcome: gold +7.50, silver +0.12, GDX +2.35%.
Bond were also a big winner: the 10-year treasury yield cratered, collapsing to 2.53%. That’s a new multi-year low, dating back to early 2018. TLT +0.95%, IEF (the 7-10-year treasury ETF): +0.61%.
Reading the tea leaves and looking at Powell’s overall attitude, I conclude that the FOMC is focused far more about an upcoming recession than they are about inflation, or anything else.
Powell’s comments about how the Fed expects a 2% growth outcome this year felt very pro forma.
Ok, that’s the tea-leaf-reading for today.
Big news of the day: QT ends in September.