PM Daily Market Commentary – 9/19/2018
Gold climbed +5.67 [+0.47%] to 1211.02 on moderate volume, and silver rose +0.10 [+0.67%] to 14.28 on heavy volume. The buck moved down just -0.12%; the cause for the metals rally seemed less about currency and more about the move in the other metals. Platinum was up 1.28%, while palladium jumped +2.41%. “Tariffs weren’t as bad as we feared”, is the sense I have.
Gold rallied strongly in Asia, and then chopped sideways for the remainder of the day. The opening white marubozu was a bullish continuation, and forecaster jumped +0.20 to +0.19, which is a buy signal for gold. Today’s move took gold back above the 9 MA, gold’s weekly forecaster also issued a buy signal (assuming we close here at end of week), and so gold is now in an uptrend in both the daily and weekly timeframes.
COMEX GC open interest rose +5,514 contracts. No covering today.
Rate rise chances (September 2018) remains at 98%.
Silver looked a bit different, making most of its gains during London and New York, hitting the day high at 11:05 am then retreating into the close. The spinning top candle was a bullish continuation, and forecaster moved up +0.04 to +0.22. Silver managed to close back above the 9 today as well, but it remains trapped in its recent trading range. Silver also remains in a downtrend in both the weekly and monthly timeframes.
COMEX SI open interest rose +1,451 contracts.
The gold/silver ratio fell -0.20 to 84.69. That’s a bit bullish for today, and the current level for the ratio suggests PM could be at or near a long term low.
Miners moved up strongly today, with GDX +1.74% on heavy volume, while GDXJ climbed +2.51% on extremely heavy volume. XAU was up +1.97%, with the long white candle being a bullish continuation. Forecaster moved up +0.10 to +0.50, which is a strong uptrend. Miners are in an uptrend in both the daily and weekly timeframes, and even the monthly is now showing a bullish-looking hammer candle. Today’s move in the miners was quite strong, given the relatively ho-hum move in gold and silver.
The GDX:$GOLD ratio rose +1.26%, and the GDXJ:GDX ratio moved up +0.76%. That’s bullish.
Platinum rose +1.26%, palladium moved up +2.41%, while copper fell -0.40%. Palladium is just going nuts, having closed above the previous high set back in May, snapping its downtrend.
The buck fell -0.11 [-0.12%] to 94.12. The buck fell in Asia but managed to bounce back, mostly. The buck did not make a new low, and so the doji candle was unrated. Forecaster fell -0.15 to -0.21. Buck is in a downtrend in both the daily and weekly timeframes. The dollar downtrend is starting to look more and more like a real thing.
Crude rose +1.46 [+2.10%] to 70.83. This marks the highest close for crude since mid-June. The EIA report was bullish (crude: -2.1m, gasoline: -1.7m, distillates: +0.8m) which more or less caused a $1 rally that lasted all the way through to the close. Crude is in an uptrend in all 3 timeframes.
SPX moved up +3.64 [+0.13%] to 2907.95. The short white candle was slightly bearish (29% reversal), and forecaster edged up +0.06 to -0.04; that’s still not quite an uptrend. SPX is in an uptrend on the weekly and monthly timeframes, however. Sector map had financials (XLF:+1.70%) in the lead, while utilities (XLU:-2.17%) brought up the rear. There was some strong bifurcation today in the sector map.
VIX fell -1.04 to 11.75.
TLT was hit hard again today, down -0.60%, making a new low dropping to levels last seen in April. TY looked substantially better, losing just -0.08%. TY remains in a downtrend in all 3 timeframes. The 10-year yield rose +3.5 bp to 3.08%. The breakout above 3% looks as though its the real deal this time.
JNK fell -0.17%, a big move down for JNK, resulting in a forecaster sell signal and a bearish confirmed shooting star candle pattern. I’m not sure what caused the big drop in JNK today. Maybe rates rising across the board was the theme.
CRB rose +0.63%, moving back above the 9, and right up to the 50. 4 of 5 sectors rose, led by agriculture (+1.33%). The impending tariff date of September 24th doesn’t seem to have commodities worried; if anything, the market feels as though it was much less serious than feared. Either that, or its a sell-the-news (or in this case, cover-the-shorts) phenomenon.
Rates were the theme of the day; the jump in the 10-year yield, the plunge in utility and junk bond prices, all point to a minor panic out of debt. Is it hints of inflation? An unwind of the flight to safety? Is it linked to lower-than-expected tariffs on Chinese products? How about bond longs getting stopped out as yields convincingly crack 3%. It feels like all of these things, all tied together.
The move above 3% is a big deal. It hits the housing market, and will end up slowing the economy as people and businesses borrow less money. Its hard to know how far it will go; the previous high was 3.12% set back in May. If it breaks above 3.12%, the pace of the move could pick up rapidly.
In the PM space, its the miners who are the stars; it sure looks like money is moving into the sector, even though the metals themselves aren’t doing all that well.
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