PM Daily Market Commentary – 5/23/2019
Gold jumped +10.19 [+0.80%] to 1288.14 on -1.50 [-0.12%] to 1277.95 on heavy volume, and silver moved down -0.01 [-0.03%] to 14.42 on moderately light volume. The buck moved lower [-0.16%], SPX fell [-1.19%], crude was smashed [-5.15%], while bonds shot higher [10Y yield +9.7 bp]. That’s a new multi-year low for the 10-year yield.
Gold started to rally after Asia closed, and then really took off about an hour before the US market opened, hitting a new high of 1287 before retreating into the close. The confirmed bullish NR7 was definitely bullish (50%), and forecaster jumped sharply higher, throwing gold into an uptrend. Gold is now in an uptrend in both daily and monthly timeframes, and gold/Euros is in an uptrend in all three timeframes. It is likely that the reversal for gold is here.
COMEX GC open interest rose +6,442 contracts.
Futures are showing a 10% chance of a rate cut in June, a 41% chance of one rate-cut by December and a 36% chance of 2 rate cuts. That’s a large increase over yesterday.
Silver looked a lot like gold, making a new high to 14.64 before falling back into the close. The long white candle was unrated, but forecaster jumped higher into an uptrend. Silver also printed a 4-day swing low pattern, which looks fairly strong to me. Silver remains in a downtrend in the weekly and monthly timeframes. This is probably a reversal for silver too.
COMEX SI open interest fell -540 contracts.
The gold/silver ratio fell -0.80 to 88.17 which is bullish.
The miners rallied for the first half of the day, and then retreated in the second half. GDX rose +0.39% on heavy volume, and GDXJ also climbed +0.39% on heavy volume. XAU moved up +0.11%, the shooting star candle was unrated, and forecaster rose, but remains in a downtrend. XAU remains in a downtrend in both daily and weekly timeframes. Miners continued to look weak; the metals had a good day, but the miners did not.
The GDX:gold ratio fell -0.40%, and the GDXJ:GDX ratio was unchanged. That’s mildly bearish.
Platinum fell -0.67%, palladium dropped -0.39%, while copper rallied +0.21%. No reversals for copper, palladium, or platinum today.
The buck fell -0.16 [-0.16%] to 97.31. Intraday the buck hit a new high to 98.26 but then retreated. The spinning top candle was mildly bearish (31%), but forecaster dropped hard, moving into a downtrend. Today’s move was also enough to pull the monthly into a downtrend as well. The high for the buck came just at the US market open – I’m not sure if that means anything, but it looked a bit curious to me.
Large currency moves included: JPY [+0.64%], CAD [-0.44%].
Crude cratered today, down -3.15 [-5.15%] to 58.22. Intraday, crude staged a waterfall move down, starting early in Asia, and finally making its low to 57.33 at 1 pm. The strong line candle was a bearish continuation, and forecaster dropped hard, and is now in a very strong downtrend. Today’s drop took crude clean through its 200 MA, and it caused the monthly to drop into a downtrend as well. Crude is now in a downtrend in all timeframes.
Nick Cunningham believes oil’s plunge was driven by the collapse of the US-China trade negotiations.
SPX fell -34.03 [-1.19%] to 2822.24. Most of the losses came in the futures markets overnight. The spinning top candle print was a bearish continuation, and forecaster dropped hard, pulling SPX into a downtrend. This puts SPX in a downtrend in both daily and weekly timeframes. The currently-forming monthly candle pattern (a bearish engulfing) is quite bearish: 73%. Day by day things don’t look all that bad, but the monthly candle pattern looks horrid, and weekly is in a reasonably clear downtrend.
Sector map was led lower by energy (XLE:-2.13%) and tech (XLK:-1.31%), while utilities (XLU:+0.51%) and REITs (XLRE:+0.18%) did best. This is a bearish sector map.
VIX rose +2.17 to 16.92.
TLT screamed higher, up +1.12%, gapping up at the open and then rallying further, breaking out to a new high. The opening white marubozu was a bullish continuation, and forecaster jumped higher, and is now in a very strong uptrend. TY did well also, up +0.39%. breaking out to a new high. The opening white marubozu was also a bullish continuation, and TY forecaster moved into a reasonably strong uptrend. TY remains in an uptrend in all 3 timeframes. The 10-year yield plunged -9.7 bp to 2.30% – that’s a level we haven’t seen since October, 2017.
JNK plunged -0.46%, printing a swing high (59% bearish), with forecaster dropping into a downtrend. BAA.AAA differential rose 2 points, and has now moved into an uptrend. Credit market is starting to get a bit more nervous. Note: this series is a day delayed – we’ll know by the weekend what today’s move looked like.
CRB plunged -1.46%, with 2 of 5 sectors falling, led by energy (-4.78%). Energy is now looking terrible.
The big news of the day was really the plunge in crude prices, and the new lows in the 10-year yield. Gold and silver rallied also, but the plunge in crude has my attention. After all, it was the crude drop last December that seemed to pull equities lower, and we might be seeing that same thing happening again.
There were two reports out today:
1) Median New Home Sales prices rose sharply, up 11% m/m, back up almost to the peaks of last year.
2) PMI Flash for May: slowed significantly vs April, and is just above stall speed – this is true of both manufacturing and services. (PMI is a survey of 1000 purchasing managers, both manufacturing and services; the “flash” report is an early look at partially-completed results which comes out 15 days ahead of the final survey). New Orders is now in outright contraction (value below 50), where it hasn’t been since Aug 2009.
We probably have a reversal in gold and silver prices – but how high metals prices go is probably based on a continuing move lower in equities. As of right now, PM still doesn’t look all that strong; the miners continue to look anemic. We really need to see buying in the miners to confirm a reversal in the metals overall.
Note: If you’re reading this and are not yet a member of Peak Prosperity’s Gold & Silver Group, please consider joining it now. It’s where our active community of precious metals enthusiasts have focused discussions on the developments most likely to impact gold & silver. Simply go here and click the “Join Today” button.
UK PM May has announced her resignation, effective June 7th.
It will be interesting to see what her successor can bring to the effort.
Also interesting: what job will May get next? And with whom?
Well, she’s qualified for so many possible jobs next.
Here are a few obvious top candidates
BoD of Raetheon
BoD of Google
BoD of BAE
BoD of Barclays
I’d be very surprised if it’s not something quite like that.
- This reply was modified 3 months ago by Chris Martenson.
I find it inconceivable that the most cartoonish of characters somehow rise on their own to become the leaders of the the supposed free world, but here we are.
Boris is without a doubt the UK version of Trump.
He’s brash, outspoken, and usually quite ignorant of the subtleties, if not the majority, of any particular topic.
If the British are supposed to be cultured and nuanced, Boris is exactly none of those things.
How is this even a possibility? It’s almost like the scriptwriters of the movie Trading Places are now in charge of things, and they’ve teamed up with some really cynical social scientists from a major university to see just how far they can push things before people actually notice and rebel.
Then they’ll all exchange a dollar based on who was closest to the actual date of the revolt, chuckle, and run an even more devious experiment.
Otherwise, these things simply mean we’re scroomed.
When the center is utterly corrupted, then the fringe gets its moment in the sun. That’s just the cycle of human affairs.
I suspect Boris Johnson is the end result of a generation of cartel skimming, globalization, and banker overreach. “This guy doesn’t look like all the scumbags who have been hosing us for a generation.”
The fact that Trump was elected is clear and convincing evidence of just how corrupt “the center” has become. As they say in Rules for Rulers, “When approval rates couldn’t be lower, yet re-election rates couldn’t be higher, you’ll know you’ve succeeded.”
People instinctively realize that “more of the same” won’t end up changing anything. Ergo – Trump. And AOC. And Bernie. And Socialism. And Boris Johnson. And BRExit. “We’ll try anything, it just needs to be different than the scams we’ve been subjected to for the past 30 years.”
A friend of mine is from England. He tells me that the Poles come to the UK to work – apparently, they are super hard-working. They will work for much less than UK labor will work for. (Does this sound like a familiar story?) Guess what happens? Low-skilled wage rates drop. So who are the winners and losers for the EU membership? Not UK labor, that’s for sure.
And that’s why BRExit is ripping both Labor and the Tories clean in half. The EU’s free movement policy (great for companies, bad for local labor in the rich nations – France, Germany, UK) has been hosing UK labor rates for the past 20 years. But “Labor” is mostly “Remain.” How did that happen? Well as we know, the EU and Remain is aligned with “good” and “niceness” and “right thinking.” Anyone who wants BRexit must be a racist xenophobe bad person. (Or maybe they don’t want their wages to be hammered down for another 20 years – to the point where they can’t raise a family anymore on what they’re paid)
And that explains both Nigel Farage and Boris Johnson. Lower wage workers have decided to stop accepting political correctness as some sort of substitute for a living wage.
And at this point in the cycle – only a “cartoonish” figure will have the cojones to say something that runs against the prevailing paradigm of political correctness. The mainstream will be utterly incapable of doing so. Just look at the 20 Dem candidates for President. Has any of them mentioned wage debasement?
Trading places, except Billy Ray had smarts.
Agree with Dave, in the PC world we now live in, you can’t dance around topics, you just have shut them down. For example, check out this YT video about EverGreen college in WA – https://www.youtube.com/watch?v=FH2WeWgcSMk. Look at what’s happening on that campus with “racism” “whiteness” “privilege”. If you can’t provide evidence you don’t have an argument, yet there seems to be none. I think SandPuppy shared the final video, but watch the whole 3 part series. The main character seems reasonable to me, but he’s the antithesis of ALT left. The students literally were either going to kill him or beat him (watch the third video for that). When reasonable people get tired of being pushed around, then it’s a snap back effect. Whoever wins will be the one to tell the unreasonable people to bug off the hardest. At some point, reasonable people don’t get elected anymore, i.e Trump, Boris, etc. I’m not excusing their behavior/idiocy, but it shouldn’t be a surprise anymore, whether they are “cartoonish” or not.
Folks, I don’t see any way for people to come together. They are only going to continue to become more and more polarized, and in the process the division between races, cultures, cities, states, neighborhoods and political ideologies are going to spread farther and farther apart until there is no solution, no common ground, no tolerance, only judgement, condemnation and hatred.
There are a number of sites we read and watch that are warning of a coming ‘event’. They base this on the success of President Trump and the never ending attacks by his political opponents. The warning is that the Left, the Deep State, whatever you want to call them, need a serious event, a false flag, a black swan, a major catastrophe to use against the president. Something that may collapse the economy, or somehow present the notion that the President is responsible and thus unfit for office, or give them the support they need to win the 2020 election and take the country back. They need to win to reinstate their agenda…
The civil war thing has been on my mind lately. This increase in hatred and division didn’t come from nothing.
I believe it has been largely manufactured – and amplified by two things: the “mainstream news”, which is locked in a titanic struggle for survival with “social media” for the attention of the nation. Both have engaged in a race to the bottom in a competition as to who can generate the most outrage, because outrage is the easy way to capture attention – and thus, advertising dollars.
But facebook and twitter started it. By effectively optimizing content for maximum outrage (and group-think), the “news” organizations had to respond or lose their viewership entirely, and as a result the whole society has been driven to the extremes.
Its pretty amazing. It is a civil war created out of (basically) nothing. If someone started out to destroy American society, they couldn’t have done it any better. Osama Bin Ladin is laughing at us from beyond the grave.
However, the conclusion has yet to be written. The implications of facebook and twitter are starting to be more understood. Facebook & instagram cause depression – not happiness.
While some imagine that “the left” (or, “the right”) are on the edge of causing some massive, awful, horrible event that will plunge us all into civil war – and that may even be true – we might also just decide to collectively wake up from this bad dream.
As I’m writing this, I am struck with a thought. Instead of looking at this as some sort of done deal, perhaps we might want to consider which outcome we’d like to help create.
I for one have noticed that, on my facebook feed, people post a lot of “outrage” news articles – some of which aren’t even current. If you click through the outrage news item, you can often see its from 3 or 5 or 8 years ago. Pointing this out in a gentle way can often defuse the outrage entirely. One imagines the poster was outraged when they saw it, and reposted it – because that’s the way the reward system works on facebook. Rather than ridiculing the poster (they are, after all, my friends) I sometimes ask, “who benefits from all the outrage generated by a post like this?”
Who indeed? The DNC. Or the RNC. Or the deep state. Or the Rockefellers. Or George Soros. Or the Koch Brothers.
Not us. We don’t benefit.
Just a thought.
[I had a mini-awakening the other day as I realized how completely I was personally being triggered as a family member called for “those asshole anti-vaxxers” to be thrown in jail. Whew. The outrage process GOT ME!]
A really scary civil war will benefit those who desire to consolidate central control. A few “lunatic _______” shooting something, or a crowd of “rabid SJW” blocking an intersection or a “gun-toting, redneck conservative” who acts out his/her fear and fury. The common people will be scared and shaken up by this fury.
The people are frightened. “Protect us” they call out to “the state.” Appearing reluctant, “the state” (the oligarchy) agrees and takes ever greater control.
- Emails and internet posts are read to look for “terrorists” and those “at risk for radicalization.”
- Biometric scanners and license plate readers keep an eye on everyone’s location “to protect the children.”
- RFID chips in every person track their location, meetings and associations with others. The NSA computer builds association diagrams and maps the networks of like minded individuals who “are not going along” with the correct way of thinking.
- Cashless business transactions allow comprehensive monitoring of the money flows of criminals (and dissidents).
The more scary the situation, the more those centralizing control have the advantage. LEOs and soldiers will “defend America” and those who oppose the oligarchy framed as “anarchists” or “terrorists.”
Food and water will be used as weapons. After famine decimates the ranks of resistant peoples, the food deliveries will be opened back up to the few survivors who are compliant, think correct thoughts, and pledge fealty to their masters.
This has been done many many times throughout history.
“Four legs good. Two legs better.”