PM Daily Market Commentary – 3/25/2019
Gold rose +8.63 [+0.65%] to 1327.77 on extremely heavy volume, while silver moved up +0.11 [+0.71%] to 15.54. The buck inched lower [-0.10%], the 10-year yield continued to fall [-3.5 bp], SPX stayed even [-0.08%], while the other metals rallied fairly strongly.
Gold spent the day moving higher, closing relatively near the highs, making a new high for this cycle. The long white candle was a bullish continuation, and forecaster moved slightly higher into a strong uptrend. Gold remains in an uptrend in all 3 timeframes, and the uptrends are strengthening. Gold’s ongoing, high volume rally looks positive to me.
COMEX GC open interest rose +7,494 contracts today.
Futures are showing a 6% chance of a rate cut in May, and a 70% chance of one rate-cut by December and a 27% chance of 2 rate cuts. Who knows what will really happen that far out, but that’s the impression that traders have right now on where things are going: recession, and a string of Fed rate cuts.
Former Fed Chair Yellen agreed about the increase in rate cut prospects because of the slowing economy but said she didn’t see this as a signal of recession. https://thehill.com/policy/finance/435670-yellen-sees-no-recession-in-sight-says-rate-cut-may-be-needed
Market is concerned, but Yellen is not. Anyone remember: “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.”
Silver rallied along with gold; the long white candle was a bullish continuation, and forecaster inched higher – the uptrend is very slight right now. Silver remains in an uptrend in all 3 timeframes – but that daily uptrend is really no trend at all. Silver really needs a close above that 50 MA. Gold may drag it higher, but its hard to know if silver would make it up there on its own. Volume remains lackluster, and it appears to be struggling.
COMEX SI open interest rose +1,254 contracts.
The gold/silver ratio fell -0.05 to 85.22. That’s slightly bullish.
Miners staged a reasonably strong rally; GDX rose +2.11% on heavy volume, while GDXJ climbed +2.29% on moderately heavy volume. XAU climbed +2.44%, breaking out above the recent high set two weeks back. The opening white marubozu was a bullish continuation, and forecaster moved higher into an already-strong uptrend. XAU remains in an uptrend in all 3 timeframes. Miners continue to look strong.
The GDX:gold ratio rose +1.44%, and the GDXJ:GDX ratio climbed +0.18%. That’s bullish
Platinum rallied +1.26%, palladium jumped +1.50%, while copper moved up +0.33%. The other metals moved higher, but really they were only partially recovering from yesterday’s strong sell-off.
The buck fell -0.10 [-0.10%] to 96.00. The bearish harami was mildly bearish (32% reversal), but forecaster actually moved higher, resulting in a tentative buy signal for DX. The weekly has also issued a buy signal too. This puts the buck back in an uptrend in all 3 timeframes. Today’s move looked a bit like a day of rest after the strong rally at the end of last week.
There were no strong currency moves today.
Crude moved up +0.09 [+0.15%]. Not much happened; the trading range was narrow, the southern doji was a bearish continuation, and forecaster inched lower into its relatively mild downtrend. Crude did manage to close below the 9 MA, which is a bearish sign. Even so, crude remains in an uptrend in both the weekly and monthly timeframes.
SPX dropped -2.35 [-0.08%] to 2798.36. SPX did try moving lower, but found dip-buyers each time. The trading range wasn’t all that wide, and high wave candle was a bearish continuation, and forecaster moved slightly lower into what remains a mild downtrend. SPX remains in an uptrend in the weekly and monthly timeframes.
Sector map shows consumer discretionary leading (XLY:+0.59%) along with industrials (XLI:+0.23%), while financials (XLF:-0.44%) and tech (XLK:-0.43%) did worst. That’s relatively bearish.
VIX fell -0.15 to 16.33.
TLT rose +0.16%, which is another new high, but the candle had a high upper shadow – a bit of a failed rally. The actual print is a high wave (bullish continuation), and forecaster inched lower but remains in a strong uptrend. TY did very well today, up +0.31%, which is also a new high. The long white candle was a bullish continuation, and forecaster inched higher into its already-strong uptrend. TY remains in an uptrend in all 3 timeframes. The 10-year treasury yield fell -0.35 to 2.42%. The day low was 2.38%.
JNK was unchanged again today; the spinning top candle was a bearish continuation, and forecaster fell, resulting in a tentative sell signal for JNK.
CRB climbed +0.08%, with 3 of 5 sectors rising, led by PM (+0.81%).
Today gold and silver started to catch up with bonds, at least a little bit. Bonds continue to make new highs (and yields, new lows), and aligned with that, the Fed Funds Futures just continue to get more bearish: the market is now predicting a slim chance of 3 (three!) rate cuts by December 2019.
Miners continue to look best in the PM space – well, if we ignore palladium, of course. While I’m not sure the miners are ready to break out just yet, they are the closest to doing so, followed by gold, and then silver. And since miners tend to lead, that tells us there is a steadily-increasing interest in the PM space overall.
The next step for the Fed is clearly a rate cut. That’s gold positive – and bonds-positive too.
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How can you tell who is a real journalist? When the person dislikes Trump but gives him a fair shake anyway. Taibbi falls into this camp, so does Glen Greenwald (at https://theintercept.com/). These are the people I will trust to tell me – something approximating the truth – going forward.
All the rest of the “bombshell” promoters I hereby consign to the dust heap of history.
Given that “collusion” has turned out to be dry well, to the ordinary viewer it will look a hell of lot like the MSNBCs of the world humped a fake story for two consecutive years in the hopes of overturning election results ahead of time. Trump couldn’t have asked for a juicier campaign issue, and an easier way to argue that “elites” don’t respect the democratic choices of flyover voters. It’s hard to imagine what could look worse.
For the commercial press to recapture any dignity after this collusion debacle, it has to at least start admitting to its role in artificially raising expectations in the last two years. It’s hard to imagine them doing that, however. This story has been so enormously profitable for cable stations, in particular, it will be hard for them to let go of this narrative. What are they going to do, go back to just reporting the news? One can almost feel how depressed network executives must be at the thought. They’ve trained audiences to expect bombshells. What will they sell now?