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PM Daily Market Commentary – 5/2/2019

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  • Fri, May 03, 2019 - 01:06am

    #1

    davefairtex

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    PM Daily Market Commentary – 5/2/2019

Gold fell -6.33 [-0.49%] to 1275.24 on heavy volume, and silver dropped -0.05 [-0.34%] to 14.63 on moderate volume. Crude was hit hard [-3.20%], SPX moved down [-0.21%] along with bonds [10Y +4.1 bp], while the dollar rose [+0.18%].

Gold moved steadily lower for most of the day, making a new low to 1267.30. The long black candle was a bearish continuation, and forecaster dropped into a strong downtrend. Gold remains in a downtrend in all 3 timeframes. Gold/Euros remains in an uptrend in the weekly and monthly timeframes. No bullish reversal for gold.

COMEX GC open interest jumped 11,104 contracts. That’s 5 days of global production in new paper. Shorts are piling in as price falls, and that’s bearish.

Futures are showing a 10% chance of a rate cut in June, a 37% chance of one rate-cut by December and an 12% chance of 2 rate cuts. Rate cut odds are slowly rising.

Silver also chopped slowly lower for most of the day, making a new low to 14.57. The spinning top candle was a bearish continuation, and forecaster fell, moving deeper into a strong downtrend. Silver is now in a downtrend in both the daily and weekly timeframes. No bullish reversal for silver, although it did managed to outperform gold – at least today anyway.

COMEX SI open interest rose 965 contracts. No short covering on today’s decline.

The gold/silver ratio fell -0.13 to 87.11. That’s mildly positive.

The miners fell too, making its new low early in the morning.  Miners then tried to rally, but the rally failed. GDX dropped -1.71% on moderate volume, while GDXJ fell -2.19% on very heavy volume. XAU plunged -1.93%, the long black candle was a bearish continuation, and forecaster moved deeper into a strong downtrend. XAU is in a downtrend in all 3 timeframes. No bullish reversal for the miners.  There were hints of buy-the-dip, but it didn’t last long.

The GDX:gold ratio fell -1.22%, while the GDXJ:GDX ratio dropped -0.49. That’s quite bearish.

Platinum dropped -1.86%, palladium moved up +0.40%, while copper fell -0.21%. Platinum is looking really unhappy at this point – both gold and silver look great by comparison.

The buck rose +0.17 [+0.18%] to 97.29. The swing low pattern looked strong (59% bullish), but forecaster was largely unchanged, and remains in a strong downtrend. Today’s rally pulled the weekly back into an uptrend. The buck is now in an uptrend in both weekly and monthly timeframes.  The possible bullish reversal in the buck doesn’t bode well for PM.

Large currency moves included: EUR [-0.60%], GBP [-0.49%], AUD [-0.55%].

Crude plunged -2.04 [-3.20%] to 61.64. Crude saw an intraday waterfall move down today, starting in Asia and then accelerating as the day wore on, finally plunging to its day low at 60.95 at about noon. The long black candle was a bearish continuation, and forecaster plunged, dropping into a moderately strong downtrend. Crude is back in a downtrend in both the daily and weekly timeframes – and the monthly is right on the edge of a downtrend too.

SPX fell -6.21 [-0.21%] to 2917.52. The swing high pattern was bearish (48% reversal) and forecaster edged lower, but remained in a shallow uptrend. SPX remains in an uptrend in all 3 timeframes.

Sector map saw energy leading lower (XLE:-1.74%) along with tech (XLK:-0.52%), while sickcare (+0.43%) and REITs (XLRE:+0.19%) did best. This was a mostly-bearish sector map.

VIX fell -0.38 to 14.42.

TLT fell -0.48%, the swing high pattern was bearish (58% reversal), but forecaster moved higher, and remains in an uptrend. TY fell also, dropping -0.31%; it too printed a swing high (49% reversal), and forecaster fell hard, but was just short of dropping into a downtrend. TY remains in an uptrend in all 3 timeframes. The 10-year treasury yield rose +4.1 bp to 2.55%.

JNK rose +0.06%, printing a mildly bullish hammer candle (32% reversal), and forecaster was unchanged and remains in a downtrend.

CRB dropped -0.96%, with 3 of 5 sectors dropping, led by energy (-2.11%). Commodities are now clearly moving down.

To me it looked as though most moves today were simply follow-through from yesterday’s FOMC meeting; Powell decided not to cut, and markets that sold off as a result of that announcement just continued moving downhill.

No bullish reversal for PM or the miners. There’s not much more to say about that.

Today’s smash in crude prices – what’s that about? Now this is just a guess: its about the failure of the coup (a “US regime change” attempt) in Venezuela. The military remains in Maduro’s camp; without removing his keys to power, Maduro will remain in place.

Amusingly, “hate group” FAIR pointed this out (h.t. Ilargi @ https://www.theautomaticearth.com/); the group dedicated to reducing immigration penned an article detailing just how universally enthusiastic US corporate media was for regime change in Venezuela.  (When “regime change” is tried on us, it’s seen as “meddling in our elections” which of course is just awful, basically its an act of war.  When we do it – well, its only good, right, and proper, because we’re the good guys.)  Presumably, FAIR is opposed to regime change because a civil war in VZ would end up creating a Syria-like wave of actual refugees, all of whom we would have to accept under our current laws.  How many times has the US “changed governments” in Latin America, and then had to deal with the blowback over the next 20-30 years?  Dozens?  And yet we still just can’t seem to resist.

https://fair.org/home/zero-percent-of-elite-commentators-oppose-regime-change-in-venezuela/

Anyhow, the failure of the coup could well be why the price of crude plunged.  No civil war = VZ oil remains on the market, and then the market has to pay attention to the very large crude build that yesterday’s EIA report showed.  Result: oil prices plunge.  The fact that managed money is heavily long doesn’t help matters at all – there isn’t anyone left to buy the dip.

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  • Fri, May 03, 2019 - 07:12am

    #2

    davefairtex

    Status Diamond Member (Offline)

    Joined: Sep 03 2008

    Posts: 3082

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    NFP +263k

Headline number: +263k

Avg hourly earnings: +0.2% m/m (2.4% annualized)

CLF Working Part Time/Economic (only PTW avail): +117k

CLF Working Part Time/Economic (all): +155k

While the headline number might be nice, the increasing number of people working part time for economic reasons does not look good at all.  These numbers suggest a recession may be at hand.  We need another month to confirm.

Gold, silver, and bonds all popped higher following the report.  Gold +9.80, Silver +0.31, 10 year -2.9 bp.  Maybe they all read my daily column.  🙂

 

  • This reply was modified 2 weeks, 5 days ago by davefairtex davefairtex.
  • Fri, May 03, 2019 - 07:27am

    #3

    davefairtex

    Status Diamond Member (Offline)

    Joined: Sep 03 2008

    Posts: 3082

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    vice grip

It seems that Big Pharma has a vice grip on the mental state of the country.  Way back when, vaccination rates of 60% were no big deal.  Now, an immigrant comes in with a case of the measles, and civil liberties get thrown right on the fire in the rush to direct a firehose of money at Big Pharma.

All for a disease with a case fatality rate of 0.01%.

I track this back to allowing advertisements for drugs.  We’re the only major industrialized nation to allow this sort of thing.  We also pay the most for our drugs.  And our healthcare is the most expensive in the world.  And it has the worst outcomes.  I think it is all linked.

Once we allowed medicine to become a for-profit industry, that’s when things all went south.

  • Fri, May 03, 2019 - 08:05am   (Reply to #3)

    #4

    cmartenson

    Status Platinum Member (Online)

    Joined: Jun 07 2007

    Posts: 4475

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    re: vice grip

Once we allowed medicine to become a for-profit industry, that’s when things all went south.

I agree wholeheartedly, and I would extend that to many other areas,not least of which is politics.

The love of money is the root of all evil.  once your relationship to money becomes the one true thing by which all is measured, then you are up against biology and base instincts of survival and reproductive fitness.

Those always win out if given an edge.

At any rate, happy to note that the reply button is now working!

  • Fri, May 03, 2019 - 01:21pm

    #5

    debu

    Status Bronze Member (Offline)

    Joined: Aug 16 2009

    Posts: 36

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    Mischaracterization of FAIR

Dave,

You wrote that FAIR is a

group dedicated to reducing immigration

While there is nothing wrong with that notion, it is not FAIR’s issue at all. FAIR is, in fact, a commendable media watchdog that advocates

for greater diversity in the press and by scrutinizing media practices that marginalize public interest, minority and dissenting viewpoints. As an anti-censorship organization, we expose neglected news stories and defend working journalists when they are muzzled. As a progressive group, FAIR believes that structural reform is ultimately needed to break up the dominant media conglomerates, establish independent public broadcasting and promote strong non-profit sources of information.

 

  • This reply was modified 2 weeks, 4 days ago by  debu.
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