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PM Daily Market Commentary – 5/31/2018

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  • Fri, Jun 01, 2018 - 05:27am

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    davefairtex

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    PM Daily Market Commentary – 5/31/2018

Gold fell -3.00 [-0.23%] to 1302.70 on moderately heavy volume, while silver dropped -0.09 [-0.57%] to 16.43 on moderate volume. The buck edged lower [-0.17%], which means that gold’s drop today was a sign of weakness – gold probably should have rallied, and that gold in Euros did fairly poorly. In fact, GC.EUR dropped -0.90%, which is a fairly large move.

Gold rallied in Asia, making a new high to 1311.50, but the rally failed, and gold was eventually hit by a downspike at 8:30 am (6764 contracts sold in 1 minute). Gold recovered from that hit, but the upwards impulse faded around 11 am – gold sold off for the remainder of the day, even though the Euro moved up +0.23%. The gold/Euros chart shows a swing high, which suggests that the rally in gold (at least across the pond anyway) might have topped out. Still, the GC.EUR forecaster ended the day at +0.25, which suggests GC.EUR remains in an uptrend. Last observation: gold is starting to see a fair number of intraday spike assaults to the downside – two yesterday, and a couple more today.

COMEX GC open interest rose 1,068 contracts.

Rate rise chances (June 2018) rose to 90%.

Silver followed gold’s track, but it dropped a bit more briskly than gold. Silver is back below all 3 moving averages. Longer term, silver remains range-bound, and right now it is moving towards the lower end of its range. Silver is below all 3 moving averages.  You can see the range-bound move reflected in the slope of the 50 MA – it is almost flat over the past 6 weeks.

COMEX SI open interest rose by 1,343 contracts today.

The gold/silver ratio rose by +0.27 to 79.29. That’s bearish.

Miners moved lower along with the metals, with GDX down -0.45% on light volume while GDXJ dropped -1.09% on moderate volume. XAU fell as well, but XAU forecaster jumped +0.25 to +0.32, which certainly looks bullish. None of the candle prints were bearish. XAU remains in an uptrend in the monthly timeframe as well.  50 MA is rising, XAU is above both 9 and 50 MA, which all looks fairly bullish to me.

The GDXJ:GDX ratio fell, as did the GDX:$GOLD ratio. That’s bearish.

Platinum fell -0.27%, palladium rose +0.07%, while copper fell -0.26%. That looks somewhat bearish given the drop in the buck.

The dollar moved down -0.16 [-0.17%] to 93.61. Today’s move took the buck below the 9 MA, and forecaster dropped -0.16 to +0.23. That’s still an uptrend, and all the other timeframes continue to show the buck in an uptrend also. The drop below the 9 may end up being something, but the macro picture (and the uptrend in the other timeframes) suggests that the dollar will probably continue to rise.

Crude fell -1.14 [-1.67%], a fairly large move. Crude sold off in Asia and London going into the EIA report which was released at 11 am. The report was bullish (crude: -3.6m, gasoline: +0.5m, distillates: +0.6m), and the release caused a momentary upward spike in crude which was sold fairly hard, erasing the momentary rebound. That’s not great – if the market can’t rally on good news, that’s a bearish sign. Crude is now below the 50 and 9 MA lines, and is in a downtrend in all 3 timeframes, although the downtrends are relatively gentle.  Still – right now the bias appears to be down for crude.

SPX fell -18.74 [-0.69%] to 2705.27. The bearish harami candle print had a 34% chance of marking a top; SPX forecaster plunged -0.33 to -0.60. That’s a downtrend. Weekly and monthly remain in an uptrend, however. Consumer staples led lower (XLP:-1.60%) while utilities did best (XLU:+0.16%). It was a bearish sector map today.

VIX rose +0.49 to 15.43.

TLT fell -0.16%, slipping back down after the big rally earlier in the week. TY also edged down, losing -0.02%. TY forecaster dropped just -0.03 to +0.71; that suggests bonds are just taking a break after such a big rally. TY is in an uptrend in all 3 timeframes.

JNK fell -0.14%. While JNK remains in an uptrend on the daily chart (forecaster +0.01 to +0.10), JNK is below all 3 moving averages. Longer term, JNK is in a downtrend.

CRB fell -0.22%, with 3 of 5 sectors moving lower, led by livestock (-1.26%). CRB has drifted lower over the past week or so, it still remains above the 50, the 50 is above the 200, both are pointing higher. CRB remains in a relatively strong uptrend.

Italy has a government at long last.  M5S and Lega Nord have agreed on a replacement finance minister which seems to have been the largest concern of Brussels.  Now we get to see just what the new government will do.  Prices suggest that all is still not well; the fact that the Italian President isn’t going to be impeached after all will be cold comfort if the new government constructs a parallel currency and then spends it like water to fund both the UBI as well as a flat tax.

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