PM Daily Market Commentary – 9/9/2019

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  • Tue, Sep 10, 2019 - 05:49am

    #1

    davefairtex

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    PM Daily Market Commentary – 9/9/2019

Gold fell -10.48 [-0.69%] to 1509.28 on moderately heavy volume, while silver dropped -0.13 [-0.71%] to 18.11 on heavy volume. The buck moved lower [-0.13%], bonds fell [10Y yield +7.2 bp], SPX was virtually unchanged [-0.01%] while crude shot higher [+2.43%].

Gold’s losses occurred during the US session; the closing black marubozu was a bearish continuation, and forecaster moved higher but remains in a downtrend. Gold remains in a downtrend in both daily and weekly timeframes.

Gold/Euros weekly dropped into a downtrend with today’s move down; GC/EUR is now in a downtrend in both daily and weekly timeframes.

COMEX GC open interest rose +1,884 contracts; no short covering on the decline.

Futures are projecting a 94% chance of one rate cut in September. There is now a 99% chance of one rate cut in December, a 78% chance of two cuts, and a 29% chance of three cuts.

Silver followed gold lower; the long black candle was mildly bullish (33%), and forecaster dropped hard, putting silver into a downtrend.  Silver remains in an uptrend in both weekly and monthly timeframes, although the weekly is getting close to a reversal too.

COMEX SI open interest rose +1,419 contracts.

The gold/silver ratio moved up +0.02 . That’s neutral.

The miners fell at the open and never really recovered. GDX dropped -2.63% on very heavy volume, and GDXJ plunged -2.88% on heavy volume. XAU fell -2.30%, the long black candle was a bearish continuation, and forecaster dropped into a very strong downtrend. Today’s drop took XAU into a weekly downtrend also, which leaves XAU in a downtrend in both daily and weekly timeframes.

The GDX:gold ratio plunged -1.96% and the GDXJ:GDX ratio fell -0.26%. That’s quite bearish.

Platinum fell -0.45%, palladium rose +0.07%, and copper moved down -0.13%. Not much happened with the other metals today.

The buck fell -0.13 [-0.13%]. The long black candle was a bearish continuation, and forecaster moved higher but remains in a downtrend. DX remains in a downtrend in both daily and monthly timeframes.

There were no large currency moves today.

Crude rose +1.37 [+2.43%] to 57.82. The long white candle was a bullish continuation, and forecaster inched higher into a strong uptrend. Crude managed to break out above its recent trading range today; that looks bullish. Crude is now in an uptrend in both daily and weekly timeframes.

SPX fell -0.28 [-0.01%] to 2978.43. The short black candle was a bullish continuation, and forecaster moved higher into a very strong uptrend. SPX remains in an uptrend in all 3 timeframes.

Energy did best (XLE:+2.00%) along with financials (XLF:+1.53%), while sickcare (XLV:-0.92%) and REITs (XLRE:-0.75%) did worst. It was a mostly bullish sector map.

VIX rose +0.27 to 15.27.

TLT plunged -1.79%, another very large drop. The short black candle was a bearish continuation, and forecaster jumped higher but remains in a downtrend. TY fell too (-0.52%), the black marubozu was a bearish continuation, and forecaster moved lower into a strong downtrend. TY remains in an uptrend in the weekly and monthly timeframes. The 10-year yield rose +7.2 bp to 1.62%.

JNK rose +0.11%, the spinning top candle was a bullish continuation, and forecaster moved slightly higher and remains in a very strong uptrend. BAA.AAA differential was unchanged at +90 bp. Still no worries from the low-quality credit market.

CRB rose +0.98%, with 3 of 5 sectors rising, led by energy (+1.97%). It wasn’t just crude today; natgas has moved strongly higher over the past month or so, up from a low of $2.05 to today’s close of $2.59. That’s a 26% move!

More happy indications from the US-China trade negotiations; Mnuchin indicated that the US and China have reached a “conceptual agreement” on enforcement. To use that favorite phrase of cable news: “If true”, this is a reasonably big deal, as enforcement seemed to be one of the major sticking points in the past.

https://www.cnbc.com/2019/09/09/mnuchin-us-china-have-conceptual-trade-enforcement-agreement.html

Either China is just playing around, or they are now seriously worried about “decoupling”. They have a good view into what those globalized US companies are doing in their country; perhaps the move out of China is starting to really pick up speed. Perhaps they have concluded that they can’t afford to wait until a more pliable US president is elected in 2020.  Maybe they want to head off any more talk of “decoupling” which is also starting to pick up speed.  That’s a lot of “maybe” and “perhaps”; if they do sign an agreement, then I suspect this will be the reason why.

A US-China trade deal would be negative for both bonds and gold, as it would remove some of those “cross-currents” that Powell is worried about – presumably reducing the number of rate cuts the Fed would make. Right now the correction in bonds is starting to pick up speed, especially in the 30-year, which jumped +9 bp.

We have an ECB meeting coming up this Thursday, and an FOMC meeting next Wednesday. Will the ECB start printing more enthusiastically? A no-deal BRExit could provide some more serious cross-currents for the EU, perhaps overshadowing any US-China trade deal, at least for them. And a no-deal exit is becoming more likely all the time. The Remainers, in trying to focus on locking in yet another Brexit extension (3 years after the vote to Leave!), have made no-deal more likely.

Although its a bit of a non-sequitur, I leave you with the following article from SCMP: Jack Ma is leaving the company he founded, at age 55.  The article notes: “this is very rare in China” where companies are run by their founders sometimes well into their 80s.  It also appears as though he is leaving the board in 2020 too.   The article does not satisfactorily answer the most interesting question – why is he leaving?  And who is now in control?

https://www.scmp.com/tech/tech-leaders-and-founders/article/3026325/will-house-jack-ma-built-be-safe-next-century

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  • Tue, Sep 10, 2019 - 06:05am

    #2
    MGRS

    MGRS

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    Jack Ma

That Kyle Bass interview with the Chinese billionaire-in-exile that was posted a few weeks ago had a Jack Ma prediction.  Basically, Ma ends up exiled, in prison, or dead for crossing the Party in an unspecified way.  Could this be the first steps of that fall from grace playing out?

vid for those that missed it:

Happy to see gold prices retreating a bit.

  • Tue, Sep 10, 2019 - 09:52am

    #3

    Eannao

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    Hatchet job on Platinum and Palladium

Hi Dave,

Have you seen this recent video from Mike Maloney about why not to buy platinum and palladium?

I usually like his stuff, but this seems like a hatchet job motivated by the fact that he doesn’t sell them and palladium is probably the best performing PM in ther past year.

https://youtu.be/ju8e7GEwEL

Funny that they don’t mention the gold/platinum ratio at all.

 

  • Tue, Sep 10, 2019 - 04:53pm   (Reply to #2)

    #4

    davefairtex

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    re: Jack Ma

Jack Ma leaving the board is just nuts.  Nobody leaves the board, certainly not the founder.  It’s a very low-stress “job”.

Is Bill Gates on the board of Microsoft?  Of course he is!  If you are the founder, and you still have a significant number of shares, you want to be there to keep your finger on the pulse, so whoever replaces you don’t totally screw it up – and if they do, you are in a position to help fix it.  Or to organize a … replacement.  🙂

 

  • Tue, Sep 10, 2019 - 04:59pm

    #5

    davefairtex

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    Bolton Fired!!!

Dream come true.  Trump fired Bolton.  Or – Bolton resigned.  I don’t really care.  Mr Moustache is gone.  And there was Great Rejoicing!!!

https://twitter.com/realDonaldTrump/status/1171452880055746560

I informed John Bolton last night that his services are no longer needed at the White House. I disagreed strongly with many of his suggestions, as did others in the Administration, and therefore..

  • Tue, Sep 10, 2019 - 05:22pm

    #6

    Chris Martenson

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    Bolton Gone…

While I’m glad Bolton is gone, or at least gone from the NSA role (does a creature like Bolton ever really disappear?), he never should have had any role at all in Trump’s administration.

None.

The guy is certifiably psychopathic.  I know, I know, that’s a requirement for the job, but his brand was especially galling to me.

Still, small victories, and all that.  The world is a safer place with Bolton out of that particular role.

  • Tue, Sep 10, 2019 - 09:36pm   (Reply to #6)

    #7

    davefairtex

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    re: Bolton Gone…

Glass half full Chris.  🙂

  • Tue, Sep 10, 2019 - 11:53pm

    #8
    phusg

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    re: Bolton Gone… but no gold reaction

> Still, small victories, and all that. The world is a safer place with Bolton out of that particular role.

Yes, I would’ve thought fuel for the gold correction, but no real reaction…

  • Wed, Sep 11, 2019 - 09:03am

    #9
    skipr

    skipr

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    Bolton's invisible hand

I think the neocons are desperately trying to make Trump look presidential for 2020. Firing Bolton and pulling out of that meeting with the Taliban and Afghanistan because of a recently killed US solder seems staged to me since that happens all the time and killing a million Iraqis has been declared justifiable by Albright.  Bolton has trained him well, so nothing will change, especially since Pompeo is still there.

  • Wed, Sep 11, 2019 - 12:08pm

    #10
    agitating prop

    agitating prop

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    Reply To: PM Daily Market Commentary – 9/9/2019

My favorite Bolton psycho video. Man, he’s been like the grease spot on the periphery of the world stage until he managed to weasel his way into a very powerful position.

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