PM Daily Market Commentary – 3/9/2017
Gold fell -7.20 to 1200.90 on moderate volume, while silver fell -0.27 to 16.98 on moderate volume. For the fourth day in a row, there were no buyers for the metals; in addition to gold and silver, platinum, palladium, and copper all fell, with palladium dropping most.
Candle print was a long black candle, which the code thinks is bearish. The volume is starting to pick up a bit, which is bearish. Gold made a new low. Today’s drop took gold through its 50 MA, coming to rest at round number 1200. Gold continues to roll downhill; once again, there are no buyers. Gold has now fallen 5 days out of the last 6, as well as 7 of the last 9. If 1200 falls, next support level is the previous low at 1182.
Open interest at COMEX for GC rose +4,671 contracts.
Rate rise chances (March 2017) rose to 91%.
Silver’s decline continues to be steeper than gold; after today’s decline, silver came to rest today just below round number 17. Silver also made a new low. Candle print today was, once again, a “closing black marubozu” which the code says is somewhat bearish. Silver again closed at the lows. Next support level is the previous low around 16.60. Silver is somewhat oversold, with RSI-7=22. The gold/silver ratio rose +0.69 to 70.72. None of this looks like a reversal.
Miners tried to rally and failed; GDX fell -0.98% on light volume, while GDXJ dropped -1.02% on very light volume. GDX closed at the dead lows of the day, which is never a good sign. Miner daily volume remains exceptionally weak; the problem is not about selling, its about nobody buying. The candle print was a “confirmed NR7”, which the code found to be bearish. Miners probably won’t rally until gold and silver stop plunging.
Platinum fell -1.14%, palladium plunged a big -2.83%, and copper lost -0.60%. It was yet another bad day for the metals. Platinum continues to drop on very heavy volume, palladium has now broken down as well, while copper’s “spinning top” actually looks bullish, with a 47% chance of forming a low. If copper stops plunging that should help everything else.
The buck fell -0.23 to 101.72, printing a “long black” candle on the day. Code says that’s somewhat bearish. Still, the buck remains above its 9 EMA, and as such is still in an uptrend. Part of the reason for the dollar’s slide was due to an ECB meeting today where there was optimistic talk about the economy in Europe. At the ECB, there is no more fear of deflation, as the inflation projection for 2017 was raised from 1.3% to 1.7%. At the same time, there was no mention of any cessation of the bond-buying QE program. Lastly, Draghi reminded us all that “the Euro is irrevocable.” Perhaps he has forgotten the adage, “while lies require constant support, the truth needs no defense.”
Crude continued dropping today, falling -0.56 to 49.83. Crude made a new low to 48.59 (roughly the 200 MA) before bouncing back to where it closed. Trading range was large, volume was very heavy, and the candle print was a “spinning top”, which turns out to be bullish; a 39% chance of marking a low here. That’s a lot better than yesterday’s doom & gloom, but far from a sure-thing outcome. Oil equities supported the somewhat positive vibe; XLE rallied +0.66%, and while oil services fell, the OIH candle print (variously: southern doji, doji star) were quite bullish, with a 71% chance of marking the low. That’s the highest rated doji star I’ve seen. Context is everything; normally “doji” candles are useless, but after a long decline, with high volume, dojis become reversal bars. Unless oil collapses, we probably have a low for oil services.
SPX rose +1.89 to 2364.87. Energy led (XLE:+0.66%) while industrials trailed (XLI:-0.46%); the market was about evenly split. VIX rose +0.44 to 12.30. I’m not sure why the jump in the VIX, given that equities actually did all right.
TLT fell -0.80%, making another new low and in fact dropping below the lows set back in mid-December. The new low is just by a few pennies, but if we have another day like today, we could see a much larger move down as traders bail out.
JNK fell again also, dropping -0.30%, finding support on its 200 MA. Volume was very heavy. Candle code thinks this “spinning top” probably does not mark a low.
CRB plunged -0.99%, a big move down but less intense than yesterday’s near-collapse. 4 of 5 groups fell, led lower by energy. Commodities are oversold, with RSI-7=16. We may be nearing the low for this phase of the commodity correction.
Prices of most everything continue downhill. There are hopeful signs in copper, oil, and the very light volume in the mining shares, but mostly prices just continue to drop. Presumably, traders are moving to cash. Certainly they aren’t buying bonds.
No reversal yet for gold, silver, or the miners.
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From what i see it's about dollar/yen again, if it closes today above 115 it'd be a very bad sign for gold.
The real danger is how fast gold is falling comparing a marginal yen moving, it looks like usd/jpy 118 gold will meet at 1120-1130.
I wonder if traders moving to cash is indicative of something more signficant? If its diffficult for us to see where the growth will come from, they must surely see the same thing. If we can see that global stocks are unsually highly priced, then they can surely see the same thing. If we can see that the oil price fall is possibly indicative of a slow down in the global economy, as well as high inventory levels, that hasn't yet shown up in GDP figures.
Perhaps they're all starting to position for the run for the exits? Not before time, if so, but my goodness those exits will be very crowded.