PM Daily Market Commentary – 4/10/2014
Gold closed up +5.40 to 1318.10 on moderate volume; silver was up +0.18 to 20.03 on heavy volume. Both metals steadily rose up until the jobless claims report was released at 0830 EDT; the unexpectedly positive report caused gold to sell off, and silver to sell off even harder. At one point silver had hit 20.40 setting a new high for this cycle, but it dropped off almost 40 cents from its daily peak.
The buck dropped again today, the fourth straight day down, closing off -0.11 to 79.47. The rate of descent is slowing a bit; it is getting close to a support zone, it will be interesting to see what happens when it hits the 79.30 range – which corresponds roughly to the euro's peak of 139.50. In the meantime, the steady move down seems to be helping gold out.
GDX was sold for most of the day and closed off -1.99% on moderate volume, with GDXJ down -2.19% on heavy volume. Although this seems like a bad day for GDX, the selloff in SPX may account for a good deal of the drop.
And that in fact was the big news of the day – SPX was off -2.09% on heavy volume, breaking 1840 support and the 50 day MA and closing near the lows of the day. Confirming the drop were the banks ($BKX) that were off -2.95% and the Nasdaq which was off -3.10%. It wasn't a massacre, but neither was it a happy day. The marking of a "lower high" is a sign of a trend change; if you add to that all of the previous signs of distribution for SPX, and the even stronger signs of distribution in the Nasdaq (QQQ) (not to mention the 3 lower highs seen in QQQ), it suggests we might see some real selling coming up. The market leadership is pointing down, and bonds are looking to break higher.
Bonds made another high today, with TLT up a big +0.93%. Although I'm not a huge fan of loaning money to the US government for 20 years for only 3.24%, from a trading perspective, TLT looks pretty good at the moment. As long as SPX is having troubles, the 20 year treasury will probably do well.
Next support level for SPX is 1820.