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PM Daily Market Commentary – 3/6/2019

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  • Thu, Mar 07, 2019 - 05:48am

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    davefairtex

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    PM Daily Market Commentary – 3/6/2019

Gold fell -1.41 [-0.11%] to 1291.36 on moderately heavy volume, while silver dropped -0.06 [-0.40%] to 15.09 on moderate volume. The buck was largely unchanged, while SPX fell [-0.65%] and bonds rallied [+0.37%]. Things may be starting to happen in the equity market.

Gold chopped sideways today in a narrow range; the short black/spinning top candle was unrated, while forecaster jumped higher, but remains in a shallow downtrend. Gold remains in a downtrend in the daily and weekly timeframes. The daily downtrend has almost stopped, but there is no reversal for gold today.

COMEX GC open interest jumped +8,764 contracts today.

Futures are showing a 1% chance of a rate cut in March, and an 6% chance of a rate-cut by December. No more rate increase.

Silver chopped lower, also in a narrow range, making a new low by a penny. The short black candle was a bearish continuation, and forecaster jumped sharply, but remains in a shallow downtrend. Silver remains in a downtrend in all three timeframes. No reversal for silver today.

COMEX SI open interest rose +1,466 contracts.

The gold/silver ratio rose +0.25 to 85.52. That’s somewhat bearish.

Miners sold off for most of the day; GDX fell -2.05% on heavy volume while GDXJ plunged -2.58% on very heavy volume. GDXJ made a new low, invalidating the swing low from yesterday. XAU fell -2.35%, narrowly avoiding making a new low, but the black marubozu was a bearish continuation, and the forecaster moved lower, remaining in a downtrend. XAU remains in a downtrend in all 3 timeframes.

The GDX:$GOLD ratio plunged -1.94%, while the GDXJ:GDX ratio dropped -0.54%. That’s quite bearish.

Platinum fell -1.22%, palladium rallied +1.30%, while copper dropped -0.66%. Platinum made a new low and continues to look very weak, palladium is chopping around near its high, and copper is also managing to avoid any large move lower.

 

The buck rose +0.01 [+0.01%] to 96.34. The doji candle was a bullish continuation, and forecaster remains in a strong uptrend. The buck remains in an uptrend in all 3 timeframes. Not much happened in the major currencies today, but some of the smaller currencies had some large moves.

Large currency moves: AUD [-0.76%], CAD [-0.57%]. The drop in AUD may have had to do with weak GDP growth.

Crude fell -0.08 [-0.14%] to 56.67. That’s actually really good news; the EIA report (crude: +7.1m, gasoline: -4.2m, distillates: -2.4m) looked pretty unpleasant, but the market actually rallied after the release. The southern doji candle could be a reversal (37%), while forecaster was unchanged, remaining in a shallow uptrend. Crude remains in an uptrend in all 3 timeframes.

SPX fell -18.20 [-0.65%] to 2771.45. SPX sold off for most of the day, closing near the lows. The long black candle was a bearish continuation, and forecaster dropped hard, resulting in a sell signal for SPX. SPX is now convincingly through its 9 MA. SPX remains in an uptrend in the weekly and monthly timeframes, although the weekly is starting to look a little iffy.

Sector map has sickcare (XLV:-1.46%) and energy (XLE:-1.27%) leading lower, while utilities (XLU:unch) and materials (XLB:+0.22%) doing best. That’s a relatively bearish sector map.

VIX rose +1.00 to 15.74.

TLT climbed +0.37%, moving higher for the third day in a row. TLT remains in an uptrend. TY also rallied, up +0.20%; the move was just enough for a forecaster buy signal on the daily. Today’s move also caused the monthly to reverse its sell signal. That puts TY in an uptrend in all 3 timeframes. The 10-year treasury yield fell -3.0 bp to +2.69%.

JNK plunged -0.20%, making a new low. JNK is moving lower, and remains in a downtrend, but the trend is still fairly mild.

CRB fell -0.37%, with 4 of 5 sectors falling, led by agriculture (-1.44%). Commodities overall remain in a medium-term uptrend – above the 50 MA.

So how come gold didn’t rally on the equity-market sell-off? I have no idea. Perhaps it was the flood of new paper – about 27 tons of new paper-gold-equivalent hitting the market today. Its hard to know who is going short down here after a $60 decline, but that’s what seems to be happening.  If gold isn’t rallying when risk assets plunge and bonds rally, that’s some bad news for PM.  I suppose I could blame platinum.  It has been really weak lately.  And the equity market drop wasn’t all that severe.

But I think gold should have done better.  Sorry I don’t have better news to report. 

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