PM Daily Market Commentary – 11/25/2019
Gold fell -6.71 [-0.46%] to 1461.90 on very heavy volume, while silver dropped -0.11 [-0.64%] to 17.00 on heavy volume. The buck [+0.03%] and crude [-0.03%] were basically unchanged, SPX shot higher [+0.75%], and bonds moved up slightly [10y yield -1 bp].
Gold moved lower all day long, closing near the lows. The short black candle was a bearish continuation, and forecaster dropped deeper into what is now a very strong downtrend. Gold remains in a downtrend in all 3 timeframes. Gold/Euros looks roughly the same.
COMEX GC open interest fell -47,950 contracts, or 22 days of global production. That’s a huge drop. This probably has to do with the near-term contract expiration coming up at end of month.
Futures are now projecting a 7% chance of a rate increase in December.
Silver spiked down at the open, tried to recover twice, but ended up closing near the lows. The short black candle was a bearish continuation, and forecaster inched lower, remaining in a slight downtrend. Silver remains in an uptrend in both weekly and monthly timeframes. Silver is looking substantially stronger than gold.
COMEX SI open interest fell -9,587 contracts. This large drop probably has to do with contract expiration also.
The gold/silver ratio rose +0.16 to 85.99. That’s mildly bearish.
Miners gapped down at the open, tried to rally, failed, and fell for the remainder of the day, closing at the lows. GDX plunged -2.09% on moderate volume, while GDXJ dropped -1.01% on moderately light volume. XAU fell -0.82%, the high wave candle was a bearish continuation, and forecaster fell deeper into what is now a strong downtrend. Even with today’s drop, XAU remains in an uptrend in both weekly and monthly timeframes.
The GDX:gold ratio fell -1.64%, and the GDXJ:GDX ratio rose +1.11%. That’s somewhat bearish.
Platinum rose +0.69%, palladium jumped +1.41%, and copper moved up +0.23%. Palladium is moving closer to yet another breakout.
The buck moved up +0.03 [+0.03%] to 97.88. The short white/spinning top candle was a bullish continuation, and forecaster moved up into its strong uptrend. The buck remains in an uptrend in the daily and monthly timeframes.
Large currency moves include: GBP [+0.47%].
Crude fell -0.01 [-0.02%] to 57.83. The doji candle was a bullish continuation, and forecaster moved lower but remains in an uptrend. However, today’s move pulled the weekly forecaster into a slight downtrend, which leaves crude in an uptrend in just the daily and monthly timeframes.
SPX jumped +23.35 [+0.75%] to 3133.64. Today saw yet another new all time high for SPX. The white marubozu candle was a bullish continuation, and forecaster moved higher and remains in a modest uptrend. SPX remains in an uptrend in all 3 timeframes.
Tech did best (XLK:+1.46%) along with sickcare (XLV:+1.17%), while utilities (XLU:-0.33%) and REITS (XLRE:+0.08%) did worst. This was a bullish sector map.
VIX fell -0.47 to 11.87. This is the lowest VIX in the last 5 months.
TLT rose +0.29%, the doji/NR7 candle was a bullish continuation, but forecaster fell into a slight downtrend. The 30y yield fell -1 bp to 2.21%. TY moved down -0.02%, the doji candle was a bullish continuation, and forecaster moved lower but remains in an uptrend. TY remains in an uptrend in both the daily and weekly timeframes. The 10-year yield fell -1 bp to 1.76%.
JNK jumped up +0.28%, the opening white marubozu was a bullish continuation, and forecaster moved into an uptrend. This was the second strong day for JNK. BAA.AAA differential rose to +88 bp. No worries about credit according to this indicator.
CRB rose +0.11%, with 3 of 5 sectors rising, led by agriculture (+1.03%).
What caused the SPX rally today? Some of it was in the futures markets overnight, but mostly prices spiked higher at the open, with the bulk of the gains happening in the first hour of trading.
Over the weekend, Hong Kong held an election; there was a landslide victory for pro-democracy candidates. Beijing asserted that Hong Kong will always be ruled by China. Perhaps someday, China will elect its leaders too, just like Hong Kong does.
I’m not really sure why gold and silver fell today; the large drop in OI was probably contract-roll-related; a bunch of longs at COMEX probably don’t want to stand for delivery.
It is interesting how silver’s forecasters are actually fairly bullish, while gold and the miners are looking a lot more iffy. It will be interesting to see if things play out that way.
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