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PM Daily Market Commentary – 5/30/2018

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  • Thu, May 31, 2018 - 12:18am

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    davefairtex

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    PM Daily Market Commentary – 5/30/2018

Gold rose +7.40 [+0.57%] to 1305.70 on heavy volume, while silver rose +0.15 [+0.95%] on moderate volume. The buck retraced all of yesterday’s gains, dropping -0.72%, which means that gold’s rally was actually all just about the currency move. Might this be a top for the buck?

Gold moved higher in fits and starts, but the rally wasn’t all that spectacular. The spinning top candle was neutral, and the forecaster plunged -0.40 to 0.0, which is right on the edge of a sell signal. Forecaster was not impressed with the lame rally on a day when the buck fell this sharply.  The 200 MA seems to be actng as resistance.  Gold in Euros remains in an uptrend.

COMEX GC open interest fell -7,948 contracts.

Rate rise chances (June 2018) jumped back up to 89%. All is well once again?

Silver looked quite a bit stronger, and rallied more or less alongside the rising Euro. The bullish harami candle pattern was more neutral than anything else, but silver forecaster rose +0.17 to -0.27, which suggests that silver is back to chopping sideways once more.

COMEX SI open interest rose by 1,947 contracts today.

The gold/silver ratio fell by -0.30 to 79.01. That’s bullish.

Miners did well today, with GDX up +1.31% on moderately heavy volume, and GDXJ climbed +1.41% on very heavy volume. Both candle prints were bullish; a confirmed high wave for GDX (41% bullish reversal) and a swing low for GDXJ (68% reversal). XAU forecaster moved higher also, up +0.10 to +0.16. That’s a mild uptrend. Miners remain in an uptrend, although it isn’t a very strong one.

The GDXJ:GDX ratio rose, as did the GDX:$GOLD ratio. That’s bullish.

Platinum rose +0.43%, palladium climbed +0.83%, and copper moved up +0.57%. These all sound like good moves, but then remember that the buck fell -0.72%, and we are reminded that the moves in the metals were just currency effects.

The dollar plunged -0.68 [-0.72%] to 93.77. The buck started moving down after the close in Asia, bottoming out at about 12 noon in the US. The plunge wiped out all of yesterday’s rally, and a bit more. The swing high candle print had a 58% chance of being a bearish reversal, but DX forecaster fell only -0.07 to +0.36. The buck remains above the 9 MA, and in an uptrend in all 3 timeframes.

Crude rallied sharply, up +1.36 [+2.03%] to 68.23. Crude printed a bullish engulfing/swing low,which had a 49% chance of marking the low. Forecaster jumped +0.61 to -0.12, suggesting that crude was quite close to reversing higher. The bullish reversal came largely because OPEC announced that they would stick with their output cut pact through the end of 2018, but are ready to make gradual adjustments to offset any supply shortage.

SPX rose +34.15 [+1.27%] to 2724.01, erasing yesterday’s loss plus a little extra. Candle print was a bullish tasuki line (42% bullish reversal); forecaster rose +0.42 to -0.17. That’s not quite a buy signal. Sector map has energy doing extremely well (XLE:+3.03%), while tech trailed (XLK:+0.74%). Every sector moved higher.

VIX fell -2.08 to 14.94.

TLT fell -0.67%, retracing less than a third of yesterday’s big move. TY moved lower also, dropping -0.53%, with TY forecaster falling -0.02 to +0.77, which is still a strong uptrend. While many other items appear to have reversed, bonds have kept most of their gains, and bonds also remain in a strong uptrend.

JNK rose +0.37%, wiping out most of yesterday’s loss, printing a bullish tasuki line (43% bullish reversal) and sending the forecaster up +0.27 to +0.14, which is a buy signal for JNK.

CRB rose +0.73%, with 4 of 5 sectors moving higher, led by livetock (+2.41%).

While the buck reversed hard today, I don’t think this means the crisis is past.  Lega Nord is eager for new elections in Italy, since they look to gain a large amount of influence based on recent polls, while M5S is hinting that a government could still be formed with the rejected minister possibly given another post.  Everything is still up in the air in Italy – really anything could happen.

They call this a “news-driven market”.

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