PM Weekly Market Commentary – 02/19/2021

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  • Sat, Feb 20, 2021 - 05:59am

    #1

    davefairtex

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    PM Weekly Market Commentary – 02/19/2021

On Friday, gold climbed +8.72 [+0.49%] to 1784.54 on moderate volume, and silver rose +0.30 [+1.11%] to 27.41 on moderate volume. The buck fell again [-0.25%], SPX dropped also [-0.19%], crude plunged too [-2.07%], as did bonds [the 10-Year yield rose +5.0 bp].

The metals sector map shows a sharp divergence between the “industrial metals” vs gold & the miners, with silver stuck in the middle. Copper did best by far – a big 7% gain, while the miners brought up the rear. Gold led silver lower. This sector map makes no sense from the conventional PM analysis viewpoint. Copper/platinum/silver/palladium are all in uptrends, while the rest of the items appear to be in downtrends.

Gold/euros plunged -33.86 [-2.25%] to 1471.68 on moderate volume. The opening black marubozu candle was a reasonably strong bullish reversal (45%), forecaster climbed, but remains in a downtrend. Gold/euros is in a downtrend in all three timeframes.

COMEX GC open interest fell -3.0K contracts on Friday, and fell -14K contracts this week. That was -4 days of global annual production in paper removed from the market. Current open interest for GC: 46% of global annual production, down -1.26% this week. 2199 GC contracts stood for delivery at COMEX this week.

Gold made a new 8-month low on Friday (1759) early in Asia, but managed to bounce back strongly by end of day, resulting in a reasonably bullish print (long white, 46% bullish), and forecaster moved into an uptrend. There was also a some amount of short covering: open interest fell to a 9-month low, which is a bullish sign. The weekly print was also bullish, although forecaster has yet to be convinced. Gold remains below all 3 moving averages.

Silver fell -0.06 [-0.22%] to 27.41 on moderate volume. The doji candle was a possible bearish reversal (37%), forecaster dropped, but remains in an uptrend. Silver is in an uptrend in the weekly and monthly timeframes.

COMEX SI open interest fell -554 contracts on Friday, and fell -723 contracts this week. Current open interest for SI: 103% of global annual production, down -0.42% this week. 268 SI contracts stood for delivery at COMEX this week.

Silver commercial net rose +1.4K contracts, which was +579 new shorts and +2.0K new longs. Silver managed money net rose +1.3K contracts, which was +499 new shorts, and +1.8K new longs.

The gold/silver ratio dropped -1.35 to 65.11. That’s bullish.

Friday saw a big spike lower in silver early in Asia (it was almost a $1 drop), and then silver spent most of the day moving higher. The daily print on Friday (bullish harami – 40% bullish reversal) looked reasonably positive. Silver ended the week above all 3 moving averages. The weekly print was bearish, but silver remains in a medium-term uptrend. While gold was pounded lower, there was no real change in trend for silver.

GDX dropped -5.87% on moderately light volume, and GDXJ plunged -5.39% on moderately light volume. XAU fell -3.49%, the long black candle was a reasonably strong bullish reversal (41%), forecaster dropped, but remains in an uptrend. XAU is in an uptrend in the weekly timeframe.

The GDX:gold ratio dropped -3.84%, and the GDXJ:GDX ratio climbed +0.50%. That’s bearish.

The miners moved lower this week, ending the week well below all 3 moving averages. While the miner chart doesn’t look as bad as gold, the miners definitely looked weak. It sure looks as though “somebody” is piling in short. While the weekly print looks good, trends for the miners look non-committal. They could go either way.

Platinum rose +19.25 [+1.50%], while palladium fell -6.30 [-0.26%]. Platinum continues to slowly move higher; it remains in a strong uptrend – platinum made another new 8-year high this week. Palladium is also slowly moving higher, but it does not look nearly as strong.

Copper screamed higher, up +0.27 [+7.12%] to 4.06 on extremely heavy volume. The opening white marubozu candle was a bullish continuation, forecaster climbed, moving higher into its uptrend. Copper is in an uptrend in all three timeframes.

It was a 10-year high for copper – last time we were here was back in 2011. Copper is looking incredibly strong. Rumor is, there are shortages. Here’s a warning sign: “Goldman Warns of Historic Shortage as Copper Explodes Higher.”

https://www.nationandstate.com/2021/02/19/goldman-warns-of-historic-shortage-as-copper-explodes-higher/

Whenever the banksters say … stuff like this, especially the weasels at Goldman, its time to grab your wallet and eye the exits. Anyone remember Goldman saying how oil would hit $200, back when it was $142, in 2008? That marked the top. Not saying it will happen this time – but these guys are a contrary indicator at the tops.

It reminds me of Bill Gates: when the ex-Microsoft CEO starts telling me that I should eat synthetic meat, or take a vaccine, I wonder what’s in there and why he cares so much about what I do. Mostly I assume whatever he’s telling me is good for him, and maybe not so great for me. Because – that’s just how he rolls. That’s how they all roll.

The buck fell -0.10 [-0.11%] to 90.34 on moderate volume. The doji candle was a bearish continuation, forecaster dropped, moving deeper into its downtrend. The buck is in a downtrend in both the daily and weekly timeframes.

Major currency moves included: CAD [+0.66%], GBP [+1.18%], JPY [-0.48%], AUD [+1.40%].

Mostly this was a failed rally this week; the buck rallied early in the week, and fell towards the end, managing to close bellow all 3 moving averages. The buck also made a new low as well. The buck is in a near-term downtrend.

Crude fell -0.57 [-0.96%] to 59.03 on heavy volume. The shooting star candle was a bullish continuation, forecaster dropped, but remains in an uptrend. Crude is in an uptrend in the weekly and monthly timeframes.

EIA Report: crude -7.3m, gasoline +0.7m, distillates -3.4m. The bullish report (on Thursday) caused a brief rally, but that’s about it.

Crude appears as though it might be reversing right now; on Friday, the daily print was a swing high (52% bearish reversal), crude dropped below the 9 MA, and daily forecaster fell into a downtrend. That said – the weekly uptrend remains intact, at least for now.

SPX fell -28.12 [-0.71%] to 3906.71 on moderate volume. The short black candle was a bullish continuation, forecaster dropped, but remains in an uptrend. SPX is in an uptrend in all three timeframes.

Sickcare [-2.51%] led the market lower, along with utilities [-1.97%], while energy [+3.27%] and financials [+2.75%] did best. This was a somewhat bullish sector map.

The VIX jumped higher, up +2.08 to 22.05.

SPX sort of meandered lower this week, managing to end the week below the 9 MA, but not printing any sort of bearish reversal on the weekly. At least for now, SPX remains in an uptrend, although it does appear to be weakening somewhat. NYSE Advance Ratio ended the week at 66, which is mildly positive.

The 10-Year yield rose +14.0 bp to +1.34%. The white marubozu candle was a bullish continuation, forecaster climbed, moving higher into its uptrend. The 10-Year yield is in an uptrend in the weekly and monthly timeframes.

It was a bad week for bonds. The capital losses (-2.81% on the 30 year) totally wiped out the whole year’s interest payment, at least for that issue. The further out you go in duration, the more you lose when rates rise. If you want to own bonds during a time of rising rates, buy the short-term stuff.

JNK dropped -0.31%. The opening black marubozu candle was a bearish continuation, forecaster dropped, but remains in an uptrend. JNK is in an uptrend in the weekly timeframe.

As with SPX, crappy debt sort of meandered lower this week; it too ended the week below the 9 MA, and in a mild daily downtrend.

Physical Supply

The GLD ETF tonnage on hand dropped -14.58 tons, with 1128 tons remaining in inventory.

ETF Discount to NAV:
* CEF -2.95%
* PHYS -1.13%
* PSLV -0.44%
Gold dealer big bar premiums:
* gold [1kg]: +1.76%
* silver [100 oz]: +13.95%

The physical ETFs are both now back in discount, and premiums at retail continue to slowly decline. PSLV trading volume ended the week on a high note, and is approximately 5x normal.

To move the needle on silver deliveries at COMEX, we need – perhaps – more than 5000; we saw 11k deliveries last June, and 6k deliveries last August.

Economic Reports

Fed Balance Sheet: 7557.4B, +115.2B (+1.52% w/w), Liquidity Swaps: 8.2B, -298M, Reverse Repos: 205.1B, +990M, Treasury Securities: 4824.1B, +25.2B (+0.52% w/w), MBS: 2170.6B, +100.8B (+4.64% w/w). That’s a lot of new MBS.

Industrial Production: headline +0.92% m/m, manufacturing: +1.03% m/m. INDPRO is nearing pre-pandemic levels – another 2 months like this and the recovery will be complete.

Producer Prices: headline +1.81% m/m. Producer prices are far above pre-pandemic levels; that’s 4.1% over the last 3 months, and – this month, annualized, is 21%.

Retail Sales: headline +4.87% m/m, retail sales (ex-autos): +5.55% m/m. Sharp jump in retail sales; still well above pre-pandemic levels.

Summary

Gold, silver, and the miners all fell this week, with the miners in the lead, and gold following along behind. Silver mostly chopped sideways, while gold made a new 8-month low. Gold hinted at a possible bullish reversal on Friday; there was a lot of dip-buying and a modest amount of short-covering. Is it really a reversal? Probably too soon to tell. Gold has been in a downtrend for quite a while now, and the new low isn’t a positive sign.

The divergence between gold and silver is remarkable.

Risk assets were mixed; equities, crappy debt, and crude all moved lower, with crude looking weakest of that group. Copper made a new 10-year high. Is that about copper shortages, or Goldman Sachs painting the tape? Or both? I can’t tell from my view from the cheap seats. However, one thing I’ve learned in life: never, ever trust the banksters. I mean, not even for a moment. Robin Hood taught the new generation that lesson. “Your order flow is the product.” And that’s great, right up until the banksters get hurt, and then you get shut down.

Bonds did terribly – they continue to make new low after new low. Rates are moving higher, and that’s with all the bond-buying from the Fed. The Fed even hoovered up 100 billion (with a B) in MBS this week. What was that about? No idea. “Maintaining smooth market functioning,” no doubt. Or perhaps the Fed was rescuing some fund that got into trouble. Who knows. $100 billion in new money, diluting the savings of You and Me. Because – uh – the Fed wants to rescue the Biden Donors?  Who knows.

A whole bunch of signals point towards inflation: retail sales, producer prices, rising copper and platinum, falling bonds. And yet silver and gold are lagging – gold is really lagging. How long do you think this will continue? The gang in charge doesn’t like gold and silver. They would much prefer equities to rally. I can’t tell you why, but that’s the effect I see. It will require real people taking delivery of real gold and real silver to move the needle – just like it did last summer. That’s my sense anyway.

The apparently-never-ending pandemic is slowly moving its way towards denouement; it turns out, Farr’s law hasn’t been repealed, human immune systems still work, and herd immunity doesn’t require vaccination to come into being, in spite of the WHO’s creepy attempt to black-hole a century of medical knowledge. The WSJ op-ed says April; I think it will probably be sooner than that. Fauci & company are still denying such a thing is possible. “Variants!” “Hunker Down!” “Wear Two Masks!” “Can’t open schools!” Because, “science.” Fauci is an old man. When its all over, he’ll just shrug. After all, he’s leaving soon anyway. I’m just guessing that he’ll find something to do in Pharma post “government service.”

https://www.wsj.com/articles/well-have-herd-immunity-by-april-11613669731

How desperate must the gang in charge be to sacrifice the credibility of literally every medical institution in the Western world on the altar of this pandemic? The third world is quietly going its own way, with nation after nation adopting ivermectin as the standard of care. Other countries use Kaletra (lopinavir/ritonavir), which costs about $10, and clears 95% of infected patients of virus in about 3 days. And there’s hydroxychloroqine, which works great if used early, and – even humble Madagascar which uses a tea made of the mysterious Artemisia Annua plant, is made fun of by the civilized world, but Madagascar doesn’t have any cases at all. [There’s a trial of Artemisia Annua, started with great fanfare; of course, it won’t finish in time to matter].

Every one of these places no longer believe anything that the WHO has to say. The Fourth Turning isn’t just a US phenomenon.

This effect is a sort of reverse-disaster-capitalism and/or reverse-colonialism, with the gang in charge deciding to consume the rich nations’ citizens lives and wealth in a blaze of medical nihilism and economic destruction via lockdowns, while poor nations are apparently free to save their people using cheap treatments that work. Spain, operating on the edge of Europe, did a bunch of trials with calcifediol. Fantastic work, Spain. It is just too bad there’s another agenda going on here. Europe didn’t get to benefit from your great detective work. “No treatments for you.” We’re going to “Build Back Better.”

And now we come to it. Post-pandemic, what will “Build Back Better” actually look like? We will find out in the not-too-distant future.

And – what happens when the populations of the West figure out they’ve been conned – by their own “health” agencies?

Never a dull moment in – The Year of the Ox!

  • Sat, Feb 20, 2021 - 06:01am

    #2

    davefairtex

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    sector map

A very curious divergence.

Name Chart Chg (W) 52w ch MA9 MA50 MA200 50/200 Last Crossing last
Copper $COPPER 7.12% 56.76% rising rising rising rising ema9 on 2021-02-05 2021-02-19
Platinum $PLAT 1.52% 30.48% rising rising rising rising ema9 on 2021-02-01 2021-02-19
Silver $SILVER -0.22% 48.81% rising rising rising falling ema9 on 2021-02-19 2021-02-19
Palladium $PALL -0.26% -7.60% rising rising rising falling ema9 on 2021-02-19 2021-02-19
Gold/Euro $GOLD:$XEU -2.25% -2.20% falling falling falling falling ema9 on 2021-02-02 2021-02-19
Gold $GOLD -2.25% 9.84% falling falling rising falling ema9 on 2021-02-11 2021-02-19
Silver Miners SIL -3.14% 31.57% falling falling rising falling ma200 on 2021-02-19 2021-02-19
Junior Miners GDXJ -5.39% 8.64% falling falling rising falling ema9 on 2021-02-11 2021-02-19
Senior Miners GDX -5.87% 10.05% falling falling falling falling ema9 on 2021-02-16 2021-02-19
  • Sat, Feb 20, 2021 - 06:09am

    #3

    davefairtex

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    “What is Easy” vs “What is Hard”

I came up with this chart (with a little help from my friends) – it is a work in progress.  I’m trying to frame the contrast between “the things that come easy” in today’s world, vs “the things that come hard.”

The concept being, “The Great Resetters” (which I also call “the gang in charge”) want to facilitate some activities, while they wish to curtail or suppress other activities.  This is my first cut.  I’m open to suggestions.  🙂  If we had a page here at the site for this group, I’d place it at the top.  This is the context for our civilization going forward.  I think it is just that important.

I encourage contributions, corrections, debates – open discussion.  Where are we?  What feels “easy” and is supported by “the system”?  What’s hard?  I have my view.  What’s yours?

Example: Elon Musk can say practically anything.  His company’s stock only goes up.  Buying TSLA = “the easy trade.”  The skids seem to be greased for him.  Somehow.  TSLA is definitely “easy”.  Cars run into walls, smash into trucks at full speed on autopilot — but nobody cares.

What is easy What is hard
Financial Tesla Exxon-Mobil
Digital Money Cash
Equities Gold & Silver
Medicine On-patent Medicines ivermectin, HCQ
Vaccination Nutritional Supplements
publishing studies on expensive compounds that don’t work publishing studies on cheap compounds that work
Masks – Two Masks! Exercise
MRNA vaccine Inactivated RU/CN vax
Lockdowns Herd Immunity
School closures
Marijuana
Life Zoom Face-to-face human interaction
Zoom Family gatherings
Zoom In-person learning
Video Games Church
Online entertainment Gyms & Exercise
Renting Ownership
Amazon Small Business
Internet of Things Private firearm ownership
Human/Machine interfaces Travel
Drones
Information facebook/twitter/youtube parler/gab/bitchute
Fact checkers inconvenient facts & science
mainstream media context
questioning vaccines
questioning climate change
deplatforming anything off-narrative
Ministry of Truth connecting the dots
“for the children” strong encryption
surveillance privacy
You-are-the-product
Government Mail-in ballots Identifying voters
Dominion Voting Systems Paper ballots
BLM-Antifa Police – Law enforcement
Technocrat government populism
Anti-Racism 1st Amendment
globalization jobs for americans
open borders restricted immigration
Energy Climate Change Fossil Fuels
Wind & Solar Fracking
Food Synthetic Meat Beef

 

  • Sat, Feb 20, 2021 - 06:40am

    #4
    EddieLarry

    EddieLarry

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    PM Weekly Market Commentary – 02/19/2021 – Its all about the rates

Watch the 10 year jump.  It is already putting the kabash on things, gold especially.  How high will market rates go before equities are forced to adjust?  When rates start going up, I think that the magnitude of the jump can surprise people.

Not to worry though, this party may continue for some time.  If the levee don’t break, it may turn out quite nicely.  Watch the levee, Texas certainly didn’t.  But that is Joe Biden’s fault!

  • Sat, Feb 20, 2021 - 07:08am

    #5

    davefairtex

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    PM Weekly Market Commentary – 02/19/2021

EL-

Can you imagine being long the 30-year?  Sheesh.  Mind = boggled.

I don’t think the losses in gold are about the 10-year rising to 1.34%.

I think it is something else.

 

  • Sat, Feb 20, 2021 - 08:30am

    #6
    hotsauce

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    PM Weekly Market Commentary – 02/19/2021

Dave, I would definitely add nuclear to the list of things that are hard in energy.

  • Sat, Feb 20, 2021 - 09:16am   (Reply to #5)

    #7
    stevedaly

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    PM Weekly Market Commentary – 02/19/2021

Also as the opposite of church would you want NFL?

  • Sat, Feb 20, 2021 - 09:33am

    #8

    JAG

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    TLT and Lessons from Texas

DF said: Can you imagine being long the 30-year?  Sheesh.  Mind = boggled.

Ha! I’ve got 40 OTM call options on TLT….Talk about long….I’m longer than Mohammed Mast’s pee pee.

I bought 30 TLT calls this week, on my damn phone (I felt like a Hooder), because of no power and water in Mi Tejas Casa. It was a week from hell.

I heard a trader say once that you buy hedges when they are cheap, not when you need them. TLT calls are freaking cheap right now, as are the other anti-bubble assets like gold and VIX calls.

This last week really opened my eyes to our future. The first neighborhoods to have their power “selectively” turned off to “save the grid” were the poor neighborhoods.

While all those empty skyscrapers in downtown Houston were lit up like a beacon in the night, people froze to death inside their dark, cold homes.

I had enough gas to run my generator for two days, but you couldn’t buy more gasoline, anywhere. What saved me and my family were a couple of solar generators (emergency Li-ion power packs) that powered 3 electric blankets that we had.

If you have to use electricity to make heat, electric blankets are super efficient, only using 40-50 watt/hours per blanket. Running a space heater on even a huge battery bank is useless.

The only utility to stay on was natural gas, but the pressure was pretty low. We kept the burners on a gas stove boiling water as much as we could, but they would periodically set off the smoke detectors.

I hooked up one of my Bluetti AC200 Solar Generators to my gas stove/oven so that I could ignite the oven and the electronics were pulling 380-400 watts! That is a crazy amount of electricity to power the clock and thermostat on a fan-less gas oven.

I used a lot of my generator power running a wet vac. Two INSULATED copper pipes broke despite leaving the water running at the types. Half my house was flooded while I was away and ruined. I sucked up as much water as I could and used it to flush the toilets.

Copper pipe could not be found in stores so I had my brother overnight me some from another state. Finally got the pipes fixed at midnight last night. No shower, washing clothes or dishes for a week.

I’m lucky in that I have neighbors with different skill sets and supplies. We all really helped each other out. I was able to feed several houses on my block from gumbos and stews I had frozen in mason jars. I also provided a water filter when the boil-water notice was sent out. We all helped each other repair our broken pipes.

This was worse than a hurricane. No power. No food to buy. No water. No gasoline. No internet. No cable. Intermittent cell service. No plumbing supplies. Plenty of freezing temperatures. No sleep.

Thanks for enduring my vent.

Oh yeah, the solar panels I ordered in October to recharge my solar generators got delivered yesterday. Sheesh.

 

No, not NFL – marijuana.  🙂

I mean, its kinda true.  From a figurative opiate of the masses to an actual opiate of the masses.

JAG-

Well congratulations on getting through it.

Electric blankets sound like a great solution.  I’ll file that one away.  Each of my mining rig UPS units could power a blanket for a day.  That’s not bad.

For water: in my survival class, we carried this stuff called “aquamira” – the water we had to drink on the 14-day course was sometimes pretty alarming.  But, no ill effects.

Sorry to hear about the flood.

Sounds like you and your neighbors were a lot better off than most.

You aren’t long TLT.  You don’t have that downside risk.  Its a much safer position.  And who knows, maybe there will be a bounce.  Both Rickards and CHS are calling for a deflationary crash coming next.  That would require money velocity to tank, and for a bunch of defaults to happen.

So far no signs of that happening.   But it sure could.  Especially if the renters all have to start paying rent, and might get evicted, etc.

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