PM Daily Market Commentary – 4/15/2015
Gold rose +9.70 to 1201.60 on moderate volume, while silver climbed +0.17 to 16.30 on moderate volume as well. PM was assisted by the falling dollar which dropped -0.42%, and also by a great day for commodities, which rose 2.03%.
Gold rallied in Euros as well, climbing +0.52%. This tells us that gold had a good day independent of currency effects. Gold also marked a swing low – more or less anyway.
The miners rallied strongly, with GDX climbing +2.94% on moderate volume, while GDXJ jumped +4.94% on moderate volume also. The mining ETF charts are now showing an ascending triangle pattern, with GDX having closed slightly above the breakout point. GDXJ is lagging a bit, but is also is showing a similar bullish pattern. Miners at this point appear to be leading PM higher, which is a bullish sign.
The GDX:$GOLD ratio has improved substantially, and it too is now starting to look bullish, having crossed its 50 MA and it too looks ready to break higher.
The dollar fell -0.42 to 98.53, following through after the swing high marked yesterday. For the dollar correction to turn more serious, it needs a close below its 50 MA, at 96.85. We are still a ways away from that.
SPX climbed today, rising +10.79 to close at 2106.63 in spite of a bad Industrial Production report released at 0915 as well as a relatively negative manufacturing survey at 0830. Mostly, today's rally was due to a sharp rally in basic materials and energy stocks. Manufacturing is showing weakness largely because of exports – due to the strong dollar and weak economic conditions overseas. Still, for the market to rally on a bad report is a bullish sign for SPX which we cannot ignore. My case for a US equity market correction gets much weaker if SPX makes new highs – and especially if the market continues to rally on bad reports. VIX dropped -0.83 to 12.84.
Bond ETF TLT fell -0.11%, losing ground due to the rise in US equities. Bonds remain in bullish territory, but they appear to need a drop in US equities to get them moving higher.
The CRB (commodity index) shot higher, climbing a big +2.07%, marking a higher high and closing well above its 50 MA. Primarily this commodity rally was about energy, precious metals, and industrial metals.
WTIC had a huge day today, up +2.51 [+4.70%] to 55.95, closing above its previous high and confirming the double bottom in oil. The rally was launched by the Petroleum Status report at 1030, which revealed a very modest inventory build of 1.3 million barrels, the smallest build in weeks. This launched energy stocks dramatically higher, and was a prime reason why SPX rallied today.
Higher commodity prices and the lower dollar are helping gold, and to a lesser extent silver. Resurgent miners are giving us a clue that we may be at the start of a new leg up for PM. Not everything is lined up yet, but things are looking better.
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