PM Weekly Market Commentary – 01/22/2021
On Friday, gold fell -13.97 [-0.75%] to 1859.02 on moderately heavy volume, and silver plunged -0.43 [-1.65%] to 25.60 on moderate volume. The buck inched up +0.09%, SPX dropped -0.30%, crude plunged -1.98%, and the 10-Year yield fell -3.0 bp to +1.09%.
The metals sector map has silver leading gold, with the miners sandwiched in between. Even after Friday’s decline, both silver and platinum are above all 3 moving averages. By contrast, the miners look pretty bad – both juniors and seniors ended the week below all 3 moving averages. While PM did rally this week overall, seeing the miners in such a bearish state suggests this is not yet a real PM uptrend. Normally, miners should be leading in a “real” PM rally, and they certainly are not doing so now.
For the week, gold rallied +28.30 [+1.55%] to 1859.02 on moderately heavy volume. The long white candle was a probable bullish reversal (58%), forecaster climbed, but remains in a downtrend. Gold is in a downtrend in both the daily and weekly timeframes.
Gold/euros climbed +15.12 [+1.00%] to 1528.24 on moderately heavy volume. The long white candle was a reasonably strong bullish reversal (45%), forecaster fell, dropping into a downtrend. Gold/euros is in an uptrend in the daily and monthly timeframes.
COMEX GC open interest rose +5.3K contracts on Friday, and fell -254 contracts this week. Current open interest for GC: 51% of global annual production, down -0.02% this week. 20 GC contracts stood for delivery at COMEX this week.
Gold commercial net rose +2.8K contracts, which was -9.4K fewer shorts and -6.5K fewer longs. Gold managed money net fell -163 contracts, which was -3.7K fewer shorts, and -3.9K fewer longs. A bunch of managed money longs have been rinsed out over the past few weeks, and there has also been a fair amount of short-covering by the banksters. The environment looks closer to a low than a high.
This week gold printed a very strong daily swing low on Wednesday, but then fell back a bit on Friday, printing a moderately strong swing high. Is this it for gold’s rally? Gold is back in a downtrend, and it also closed back below the 50 MA too. However, the weekly candle print looked reasonably strong, so, those are mixed signals from the tea leaves for gold.
Silver rallied +0.74 [+2.98%] to 25.60 on moderate volume. The spinning top candle was a possible bullish reversal (38%), forecaster climbed, but remains in a downtrend. Silver is in an uptrend in the daily and monthly timeframes.
COMEX SI open interest fell -1.6K contracts on Friday, and fell -805 contracts this week. Current open interest for SI: 96% of global annual production, down -0.46% this week. 247 SI contracts stood for delivery at COMEX this week.
Silver commercial net fell -330 contracts, which was -708 fewer shorts and -1.0K fewer longs. Silver managed money net fell -1.8K contracts, which was -2.2K fewer shorts, and -4.0K fewer longs. No real signal from the COT report for silver.
The gold/silver ratio dropped -1.02 to 72.62. That’s bullish.
Like gold, silver printed a strong swing low on Wednesday, but then printed an even stronger swing high (63% bearish) on Friday . The weekly chart hides all that detail – the candle print was moderately bullish, and weekly forecaster improved but not enough to pull silver into an uptrend. In spite of Friday’s $0.43 drop, silver managed to end the week above all 3 moving averages. Perhaps we can say thhat silver is cautiously bullish.
GDX moved up +2.09% on moderate volume, and GDXJ rallied +2.01% on moderate volume. XAU climbed +1.92%, the bullish harami candle was a bearish continuation, forecaster climbed, but remains in a downtrend. XAU is in a downtrend in both the weekly and monthly timeframes.
The GDX:gold ratio climbed +0.53%, and the GDXJ:GDX ratio dropped -0.08%. That’s somewhat bullish.
The miners looked weaker than both gold and silver for most of the week, and Friday saw a big gap down open, but then a rally for most of the day, wiping out most of the losses and ending near the highs. Even so, the weekly print wasn’t bullish, and while the weekly forecaster strengthened, it wasn’t enough to pull miners back into an uptrend. The miners ended the week below both the 9 and 50 MA lines – and the seniors closed below all 3 moving averages.
Platinum rose +30.60 [+2.75%], while palladium fell -68.78 [-2.90%]. For platinum, it is two steps forward, and one back; the new multi-year high on Thursday was then followed by a moderately-large sell-off on Friday. Palladium is now steadily moving lower, although longer term it too remains relatively near its recent highs.
Copper moved up +0.01 [+0.28%] to 3.61 on moderately heavy volume. The spinning top candle was unrated, forecaster climbed, moving higher into its uptrend. Copper is in an uptrend in the weekly and monthly timeframes.
Copper ended the week below the 9 MA and also in a forecaster downtrend; on the longer term charts, copper’s uptrend remains in place. For a correction to really start, copper needs a close below 3.50 – which would confirm the start of a lower-high lower-low bearish pattern.
The buck dropped -0.55 [-0.61%] to 90.19 on moderate volume. The long black candle was a possible bearish reversal (38%), forecaster fell, dropping into a downtrend. The buck is in a downtrend in all three timeframes.
Major currency moves included: EUR [+0.54%], GBP [+0.58%].
The buck moved back into a downtrend in all 3 timeframes this week; it isn’t a serious downtrend just yet.
Crude plunged -0.17 [-0.33%] to 51.96 on moderate volume. The doji candle was a bearish continuation, forecaster dropped, but remains in an uptrend. Crude is in an uptrend in the weekly and monthly timeframes.
EIA Report: crude -3.2m, gasoline +4.4m, distillates +4.8m.
On Friday, crude printed a lower low, and closed below the 9 MA – both bearish signs. Forecaster also dropped into a downtrend. Is crude entering a correction? Maybe so. The weekly chart still looks strong; this is an early sign.
SPX rallied +73.22 [+1.94%] to 3841.47 on moderate volume. The opening white marubozu candle was a bullish continuation, forecaster was unchanged at. SPX is in an uptrend in all three timeframes.
Communication services [+5.16%] led, along with tech [+4.07%], while financials [-1.98%] and energy [-1.62%] did worst. This was a mostly neutral sector map.
The VIX plunged -2.43 to 21.91.
SPX made a new all time high this week, but faded somewhat on Friday. Still, SPX remains in a reasonably strong uptrend.
The 10-Year yield fell -2.0 bp to +1.09%. The swing high candle was a likely bearish reversal (66%), forecaster was unchanged and remains in a strong uptrend [yield uptrend = bond price downtrend]. The 10-Year yield is in an uptrend in the weekly timeframe.
Bonds continue to struggle – having put in a low 2 weeks ago, they have been chopping sideways since then. This week’s candle print looked strong, but forecaster is not impressed. Mixed signals from bonds this week.
JNK moved up +0.23%. The doji candle was a bullish continuation, forecaster climbed, moving higher into its uptrend. JNK is in an uptrend in the weekly timeframe.
As with SPX, crappy debt rallied for much of the week making a new multi-month high, but then faded on Friday. It remains in an uptrend, although the daily is looking iffy.
The GLD ETF tonnage on hand dropped -4.38 tons, with 1173 tons remaining in inventory.
ETF Discount to NAV:
* CEF -4.33%
* PHYS -1.66%
* PSLV -2.98%
Gold dealer big bar premiums:
* gold [1kg]: +1.48%
* silver [100 oz]: +3.49%
Physical ETF discounts remain relatively large, big bar gold at retail looks strong, while big bar retail silver premiums remain weak.
Fed Balance Sheet: 7414.9B, +81.0B, Liquidity Swaps: 10.9B, -241M, Reverse Repos: 209.8B, +7.0B, Treasury Securities: 4743.6B, +19.8B MBS: 2099.8B, +60.3B. Fed buying was almost all MBS this week.
While gold, silver, and the miners all moved higher this week, all three items remain in weekly downtrends.
The dollar reversed back into a downtrend, after rallying in the two weeks prior.
Bond yields hinted at a bearish reversal – but there are some mixed signals. How does that whole thing work if/when the new Biden Donor Stimulus bill passes Congress, and the Fed decides to print another two trillion to monetize all that new debt? Something will have to give – either the buck, or bond yields. Perhaps the markets are betting on the buck taking the hit.
Risk assets were mixed too; equities did quite well, crappy debt did less well, and both copper & crude appear a bit tired and may be ready to reverse.
The only markets giving us a clear signal right now are equities. They are continuing to make new all time highs.
Many large companies have benefited substantially from the pandemic response; the big guys appear to like lockdowns, and the crushing of small business. They are also big Biden Donors. Copper also did quite well from the “buying things” consumer pandemic response.
Here’s a revolutionary statement: I see a near-term end to the pandemic. My timeframe: early March. That will be “the beginning of the end.”
The original plan appears to have involved a “vaccine-mediated ending” to the pandemic. Rev up cycles on the PCR tests to get a lot of false positives, during wintertime, with maximum vitamin-D deficiency in the population. Force everyone to lock down, weakening immune systems further. Tell the people to “hunker down” for a “hard winter ahead.” Then reinforce this with fear every day in the media. “Hospital overruns!” And then discourage people to gather with family; no Thanksgiving, no Christmas. (Unless of course your name is Birx, or Newsome). No church, no community. Remove any support. This serves to weaken immune systems, and maximize the number of deaths. Then, once everyone gets vaccinated, ramp those cycles down = lots fewer positive tests = credit goes to the vaccine. Mandate the vaccine to fly, or enter federal buildings, etc. And everyone in the world will need to be re-vaccinated every year due to “mutations.” 100 billion a year revenue stream, with 2021 as just the down payment.
This plan does not appear to be working out. Even with PCR cycles at high levels, we are now seeing positive tests dropping. Winter and lockdowns remain, but it appears as though the pandemic has peaked. And vaccination has hardly started. And now, ivermectin seems to be arriving. Just this week:
* Mexico has included ivermectin in its home treatment kits for COVID-19, crediting the FLCCC.
* Peru is now re-including ivermectin in its home treatment kits also
* Another state in Argentina is adopting ivermectin
* 600 doctors in France are suing the government to get them to allow prescriptions; verdict next week
* News articles are uniformly more positive; instead of ivermectin being called a “head lice treatment”, is is a “head lice treatment that might end the pandemic.”
* A WHO panel of experts is allegedly investigating ivermectin
* IVM prescriptions in the US are rising; from 5000/week 3 weeks ago, they are now up to 50,000/week.
Summarized efficacy for IVM: prophylaxis (91%), early treatment (72%), late treatment (59%).
Lastly, there are number of IVM trials due to finish in February: Bulgaria (n=120), Brazil (n=700), Columbia (n=450, n=66), Argentina (n=500), Mexico (n=3000). Do you see any first world countries on that list? You do not.
The trial ramp: Dec 2020 (n=1452), Jan (n=2294), Feb (n=4100), Mar (n=5900), Apr (n=10,000)
[ source: https://twitter.com/Covid19Crusher ]
A good chess player looks several moves ahead, and plans accordingly. This “trial ramp” chessboard says: Ivermectin is going to be approved. The Biden Donors in charge of the US “pandemic response” have a choice; they can resist approval to the bitter end and lose all remaining credibility, or they can try and use it to their advantage.
My guess is – they will continue to resist past the point that makes any logical or scientific sense, but they will end up conceding the game in early March.
[FWIW, I have a sense that the WHO, and the NIH, have lost a great deal of credibility in the developing world. At the start of the pandemic, everyone listened to the WHO and NIH, mainly because a whole bunch of their medical teams trained in the US, and they looked up to us. Today, after some utterly incomprehensible decisions by WHO and NIH, each country has developed its own national treatment guidelines. WHO and NIH are now ignored, for the most part. The pandemic has had the (beneficial) effect of breaking loose Pharma’s hold on a big chunk of the rest of the world. This is strikingly evident in the “trials due to finish in February”, above. They are all done in the developing world. These nations have figured out: “we are on our own.” Kind of like the citizens in the West. Side effect: they now “trust themselves” a whole lot more. I suspect the pandemic has been unexpectedly empowering for all of them. As it has been for us.]
Between now and then, a whole lot of first world Americans and Europeans seem likely to endure a number of vaccine deaths, as the Biden Donors insist on a massive vaccine rollout. CNN viewers will probably be preferentially injured; it is “woke” and “pro-science” to be vaccinated, even with a totally experimental product. I see it on my facebook feed already. Alex Berenson has been monitoring the vaccine situation using VAERS – Vaccine Adverse Event Reporting System: COVID19 vaccination fatalities are currently running at 120x the yearly flu vaccine. And this is just for the first shot. Trials show that side effects for the second shot are much worse. Of course, we’re giving this shot to our healthcare workers first. I think this will eventually become a scandal, but I don’t see a timeframe for that just yet. No doubt they’ll impeach Trump for it. For a third time. To remove him from the office he no longer holds. That last bit was me, not Alex.
So, bottom line: I’m projecting a “beginning of the end” of the pandemic within (probably) 6-8 weeks, and – with a lag – a decline in vaccine enthusiasm among the CNN viewership. All this will become apparent to Wall Street many weeks before it appears on Main Street. They have contacts within NIH for sure, and those contacts will give them advance warning. Prices will move in anticipation, as they always do.
Spending will flip from things to experiences once again. And a whole lot of “experiences” will have gone bankrupt. The remaining “experiences” should see some pretty spiffy income.
Gun to my head: copper probably gets hit, along with AAPL/TWTR/FB/GOOG. People will go outside. Maybe oil rallies? Maybe it rallies a lot? What else? Short MRNA, perhaps? It doesn’t have any other products but this vaccine; it was trading at 20 in January, and is now at 131. It looks like it might be printing a lower high right now. I don’t have any positions right now, just thinking out loud.
Maybe you can come up with some guesses. What’s your list of things you’d like to do? Top of my list is travel. I’m probably not alone here.
Hmm. Maybe I should buy my airline tickets in advance. Maybe I’ll be conservative and schedule it for summer.
Fine article Dave. We have a cruise lined up for August. Plan to go, but if we don’t, it would save a lot of money. Could spend that money on the garden – probably not!
Here’s a good article from Jeff Clark on trading BTC and/or getting in at a favorable price point.
When to Stop Buying the Bitcoin Dip
By Eoin Treacy, co-editor, Market Minute
I’m not a cryptocurrency missionary. I’m not going to tell you to hold on forever. I don’t know how the sector is going to evolve, or which token is going to eventually prevail – if any of them do.
I’m only interested in cryptocurrencies because I can make money trading them. And I’ve come up with a system to determine when to take profits and when to buy back in…
I’ve traded all kinds of different markets over the years. And if it’s taught me one thing, it’s that one of the most consistent things in any trend is the size of the pullbacks… no matter which market you’re trading.
You see, in any uptrend, traders always try to buy the dip. And the only way to figure out how much of a dip to wait for is by looking at what happened last time.
If the market previously pulled back 10 points before rallying back, the logical thing to do is to wait until it pulls back by 9. That’s when you buy. And the more people looking to buy the dip, the greater the chance of similar-sized pullbacks.
But if the market pulls back 11 points – look out. That’s the time to start selling on any future rallies.
For example… During the bull market in bitcoin from 2016 to 2017, the market pulled back by as much as 40% on seven occasions. In December 2017, it pulled back by 44%, rebounded, and took out the low a few days later – ultimately falling over 82% to its 2019 low.
A much bigger pullback after a big advance is seldom good news. It’s often topping activity.
Until that happens, buyers will buy all day, all week, and all month as long as the pullbacks stay smaller than the previous ones. But when that stops, and the gravy train reaches the station, they leave.
Now, let’s take a look at where bitcoin is at today…
Since the March 2020 low, bitcoin has posted seven good-sized pullbacks. Until last week, all were smaller than 20%.
The peak-to-trough swing between the high on January 8 and the low on January 21st was 31.36%. That’s a much bigger drawdown than any we’ve seen since March 2020.
Since the peak, bitcoin has been quite volatile. Bulls will rationalize the loss of consistency by saying that the difference from close to close was only 16%. But, bears will say that the price is now way above the cost of producing new coins (when mining is more profitable, more coins are being produced – causing a supply influx which weighs on prices).
But, the important thing to remember is what people say is less important than what they do. If the trend is still intact, and has further to run, the January 21st low just above $28,000 will hold. This is more than a wobble. The bigger pullback tells us something has changed in how the crowd looks at bitcoin. With the loss of consistency this month, traders should have stops in the market now.
So, when would I look to buy back into bitcoin?
As someone with a long position, $30,000 is a place where I might consider buying more on this dip. Crypto bull markets are very exciting and they can surprise on the upside. I don’t like chasing, so my strategy is to buy on weakness. However, I will only do that as long as the trend is intact. If the price falls below $28,000, I’ll take my profits and walk away.
While bitcoin is known for massive gains, it’s just as common to experience dramatic drops that can scare most investors into selling.
Take a look at this chart…
After the last two phases approached bubble territory, the price of bitcoin (the blue line) collapsed back to test the 1000-day moving average (MA – orange line). That MA is at $9,466 as of this writing – a 72% drop from today’s prices. That’s why I have a stop on my position at the $28,000 level.
And, when this phase of the big crypto bull market rolls over, I’ll look to buy somewhere around $9,000 based on where the 1000-day MA is right now.
All the best,
Looks like an interim low. The longer term model is a teensy bit less enthusiastic about today’s print. Not saying “dead cat bounce” – but maybe hinting at it.
Nice article ao. Thanks for sharing it.
I’ve never thought about using the measure of pull backs as an indicator. And I’ve never seen the 1000 day MA charted before. Pretty interesting stuff.
So I have some code that does backtesting on trading through moving averages. The two moving averages it likes for bitcoin (starting in 2014) is MA6 and MA16. ROI for MA6 is 54k, MA16 is 53K. There are many fewer trades for the MA16. Here’s what that looks like for 2020-06 to present.
When things are flat, there are a lot of bad signals. That’s usually the case with these sorts of indicators. Still – it gives you a sense.
Here’s what it looked like in 2017:
And one more: the MA49 (42k ROI) – weekly chart (but daily MA49). This suggests crossing of the MA50 isn’t a terrible indicator for bailing out, or entering long. You will get the bulk of the gains. Assuming the past is any sort of guide to what happens next. But – critical bit – you need to have the guts to buy back in if price re-crosses the 50 to the upside. That isn’t easy to do.
DF: So, bottom line: I’m projecting a “beginning of the end” of the pandemic within (probably) 6-8 weeks…
I told my daughter the same thing, just to stop her from crying, but I really don’t believe it.
Just adding the projections for the B117 variant have us doubling our current amount of deaths and cases in the next 3 months. And then we have the new South African mutation. It’s too early to know how that might change the picture.
Overall, I think it’s really easy to underestimate the exponential power of biology.
I am planing to take my daughter to see the Grand Canyon this summer, if I can remain covid-less until then.
Thanks for the bitcoin MA charts, That is an impressive ROI. Is there anyway you could post a larger version of them? It’s too small to really see the buy and sell signals. Many thanks.
Regarding the pandemic – I’ll keep an eye on the data. The UK (with its world-crushing variant) has apparently topped out. And the excess deaths on the island aren’t materially higher during the winter. Its quite remarkable. It would seem to be a case-demic plus a “death near COVID” situation. Based strictly on the numbers.
First – positive tests. Does this look like the UK is being overrun by “the horrid variant”? [Don’t tell me this is about lockdowns; virus passes mostly at home]
And here’s all cause mortality, snapped from an article in the Telegraph this weekend. Red line = “Deaths with COVID”, Green line = 5 year average, black line = all cause mortality. Sure doesn’t look like this winter is remarkably different from that 5 year average. Nothing like April.
Based on this data, I think “the horrid UK variant” is panic porn.
Of course I’m happy to change my mind if the case-demic comes back. I’ll be watching. Maybe they’ll ramp up the cycles in those PCR tests to 45. I wish I had access to that all cause mortality data. That’s where the rubber meets the road.
Which bitcoin chart and what timeframe did you want?
Following DaveF’s post at Covid19Crusher on twitter, I just had to post some of them to facebook. I’ll put them here too.
Ivermectin is coming to a doctor near you. It is a mass sourcing challenge now. Not a debate about efficacy any longer.
Dr Andrew Hill: Ivermectin meta-analysis reported in the Financial Times: “The purpose of this report is to forewarn people that this is coming: get prepared, get supplies, get ready to approve it,” Dr Hill said. “We need to be ready.”
New ivermectin in vitro work to be published soon will show achievable inhibition concentration in human lung cell (CALU-3). It will remove the now defunct anti-ivermectin in vitro pharmacologist argument that was based on monkey kidney cells numbers.
This table shows that the inhibitory concentration for SC2 in alveolar (lung) cells of 105 ug/g is easily reached by standard ivermectin dosing when taken with a meal (which improves absorption of ivermectin). The argument that “standard doses of ivm do not produce the inhibitory concentration needed” is hereby refuted.
The Evidence-based Medicine Consultancy Limited @EvidenceLimited
“The good news is that we now have solid evidence of an effective treatment for Covid-19. It is called ivermectin.” – An excerpt from a letter our director, Dr. Tess Lawrie, wrote to Mr. Johnson.
Update after 132 days of the results of the treatment of healthcare workers with ivermectin in the Argentinian province of Corrientes. Participation is voluntary. 12 mg/week for 8 weeks followed by rest of 4 months.
Odds of infection down 76%, no hospitalization.
Ivermectin’s benefit is moving to the forefront in the international literature as more trials are being completed and more populations are adopting its use. In Mexico City, It became policy to give IVM to people who tested positive for COVID on Dec 29, 2020. This has produced a downturn in deaths and hospitalizations that is not being seen in those diagnosed clinically (who were not given ivm).
Hey Mr. DF,
I think we had this disagreement on CNNVID 6 months ago. Don’t get me wrong, I hope you are right.
This chart from John Hussman is the source of my concern:
I would love to see the details of the Bitcoin MA16 chart over the last 6 months if it’s not a PITA for you. Thanks.
SP, thanks for the info on Ivermectin. I have been taking it in a fasted state with just water (at the halfway point during a 20 hour daily fast). Looks like I’ve been doing it all wrong! JAG is an idiot, again.