PM Weekly Market Commentary – 03/26/2021

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  • Sat, Mar 27, 2021 - 07:34am

    #1
    davefairtex

    davefairtex

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    PM Weekly Market Commentary – 03/26/2021

On Friday, gold climbed +6.71 [+0.39%] to 1734.21 on moderate volume, while silver edged down -0.03 [-0.12%] to 25.12 on moderately light volume. The buck moved slightly lower [-0.05%], SPX rallied strongly [+1.66%] as did crude [+4.08%], while bonds fell [the 10-Year yield rose +4.0 bp].

For the week, gold fell -12.17 [-0.70%] to 1734.21 on moderate volume. The opening black marubozu candle was unrated, forecaster dropped, moving deeper into its downtrend. Gold is in a downtrend in all three timeframes.

Gold/euros climbed +8.10 [+0.55%] to 1470.92 on moderate volume. The short white candle was a bullish continuation, forecaster dropped, dropping into a downtrend. Gold/euros is in an uptrend in the monthly timeframe.

COMEX GC open interest fell -5.9K contracts on Friday, and fell -2.8K contracts this week. Current open interest for GC: 44% of global annual production, down -0.26% this week. 1243 GC contracts stood for delivery at COMEX this week.

Gold commercial net rose +7.7K contracts, which was -6.3K fewer shorts and +1.4K new longs. Gold managed money net rose +2.4K contracts, which was +4.9K new shorts, and +7.3K new longs.

Gold moved slowly lower this week, with most of the damage happening on Tuedsay. Friday saw a modest rally, but it was not enough to pull gold back into an uptrend. Gold ended the weekk below all 3 moving averages. However, based on the sharp rise in the buck [+0.92%] during this same time, all of gold’s downward move this week was just a currency effect – gold/Euros actually moved higher.

Silver fell -1.22 [-4.63%] to 25.12 on moderately light volume. The bearish engulfing candle was neutral, but forecaster fell, dropping into a downtrend. Silver is in a downtrend in all three timeframes.

COMEX SI open interest fell -414 contracts on Friday, and fell -4.3K contracts this week. That was -8 days of global annual production in paper removed from the market. Current open interest for SI: 88% of global annual production, down -2.46% this week. 1096 SI contracts stood for delivery at COMEX this week.

Silver commercial net rose +3.2K contracts, which was -1.8K fewer shorts and +1.4K new longs. Silver managed money net fell -2.7K contracts, which was +1.9K new shorts, and -781 fewer longs.

The gold/silver ratio climbed +2.74 to 69.04. That’s bearish.

Most of the damage to silver happened on Tuesday – silver just chopped sideways for the remainder of the week. Is silver putting in a low? Silver does seem to have support around round number 25, and – roughly – the 200 MA. On Friday, silver did not confirm Thursday’s strong intraday rebound, so for now, the downtrend remains in place. First notice day is next Wednesday. Perhaps the low will soon follow.

GDX fell -3.30% on moderately light volume, and GDXJ plunged -5.44% on moderately light volume. XAU plunged -4.03%, the long black candle was a reasonably strong bullish reversal (48%), forecaster dropped, but remains in an uptrend. XAU is in an uptrend in the daily and weekly timeframes.

The GDX:gold ratio dropped -2.70%, and the GDXJ:GDX ratio dropped -2.25%. That’s bearish.

While the miners moved lower this week, on Friday the miners rallied [+2.28%] while printing a very strong bullish reversal (62%) candle pattern, and they also jumped back into a daily uptrend. While the miners remain below all 3 moving averages, the strong confirmation of Thursday’s candle print suggests that the miners may have put in a low – ahead of both gold and silver. Perhaps “someone” is hoovering up the miners prior to the perhaps-predictable low maybe coming following First Notice Day.

Platinum fell -7.16 [-0.60%], while palladium rose +56.98 [+2.13%]. Platinum appears to have put in a low – wiping out most of the week’s losses with a big rally [+3.32%] on Friday, while palladium appears to be setting up for a breakout to new highs.

Copper fell -0.03 [-0.73%] to 4.07 on moderately light volume. The hammer candle was a bearish continuation, forecaster dropped, but remains in an uptrend. Copper is in an uptrend in the weekly and monthly timeframes.

Copper also printed a reasonably strong bullish reversal candle (swing low: 50%) on Friday. While it remains in a daily downtrend, copper’s weekly chart continues to look reasonably strong, as does the monthly, at least for now.

The buck rose +0.85 [+0.92%] to 92.77 on moderately light volume. The confirmed bullish nr7 candle was neutral, forecaster dropped, but remains in an uptrend. The buck is in an uptrend in all three timeframes.

Major currency moves included: CAD [-0.75%], EUR [-1.26%], GBP [-0.54%], JPY [-0.66%], AUD [-1.19%].

The buck rallied sharply this week, closing above the 200 MA – it is now back above all 3 moving averages – and ending the week at or near a 5-month high. The buck has been moving higher in fits and starts over the past 3 months. The rising dollar has definitely been a drag on PM prices.

Crude fell -0.78 [-1.27%] to 60.72 on moderate volume. The takuri line candle was a bearish continuation, forecaster fell, dropping into a downtrend. Crude is in a downtrend in both the daily and weekly timeframes.

EIA report: crude +1.9m, gasoline +0.2m, distillates +3.8m.

WCRFPUS2: 11 mbpd, +100k; production is now back to the July 2020 “new normal”. That’s still off -2 mbpd from the peak, but production has just moved sideways over the past 9 months.

Crude chopped slowly lower this week – a pair of huge moves down, followed by almost-as-huge moves back up again. It looks as though there are two competing worldviews about where the price of oil should go next, with the sellers outnumber the buyers, but not by much. Weekly forecaster didn’t like what it saw, however, and that takuri line print wasn’t bullish either: crude is now in a downtrend.

SPX rallied +61.44 [+1.57%] to 3974.54 on moderate volume. The long white candle was a bearish continuation, forecaster dropped, falling into a downtrend. SPX is in an uptrend in the daily and monthly timeframes.

Staples [+3.21%] led, along with REITs [+3.18%], while communication services [-4.32%] and discretionary [-0.23%] did worst. This was a bearish sector map.

The VIX fell -2.09 to 18.86.

Literally all the good news for SPX this week came on Friday’s large rally [+1.66%]. This pulled SPX to a new all time closing high. Oddly, this wasn’t enough to pull SPX into an uptrend – I’m really not sure why.

The sector map was actually pretty unhappy: staples and REITs are not the stuff of which a bull market move is made. The whole US-pandemic-end thing is causing a lot of rotation under the covers as Big Money tries to figure out where things are headed next.

TLT rallied +1.42%. The shooting star candle was a bullish continuation, forecaster climbed, but remains in a downtrend. TLT is in a downtrend in both the daily and weekly timeframes. The 30-Year yield fell -7.0 bp to +2.38%.

TY climbed +0.27%. The bullish harami candle was a possible bullish reversal (37%), forecaster climbed, but remains in a downtrend. TY is in a downtrend in both the weekly and monthly timeframes. The 10-Year yield fell -7.0 bp to +1.67%.

The 10-Year yield fell -7.0 bp to +1.67%. The bearish harami candle was a reasonably strong bearish reversal (40%), forecaster dropped, but remains in an uptrend. The 10-Year yield is in an uptrend in the weekly and monthly timeframes.

Bonds rallied Mon-Wed, then fell Thu-Fri, printing some ugly swing high (66%) bearish reversals. Ouch. Still, bonds may still be putting in a low, at least for the time being anyway. Some of that flood of money from Lockdown Europe (again!) may be finding its way into the 10-year.

JNK rallied +0.88%. The swing low candle was a reasonably strong bullish reversal (43%), forecaster climbed, rising into an uptrend. JNK is in an uptrend in the daily and weekly timeframes.

Crappy debt rallied for 5 days out of 5 this week – and as a result, it is back in a weekly uptrend. That’s a vote in favor of risk on.

Physical Supply

The GLD ETF tonnage on hand dropped -15.16 tons, with 1037 tons remaining in inventory.

ETF Discount to NAV:
* CEF -4.45%
* PHYS -1.53%
* PSLV +0.05%
Gold dealer big bar premiums:
* gold [1kg]: +1.32%
* silver [100 oz]: +16.13%

Physical gold ETFs remain in discount, while the physical silver ETF is in a slight premium.

Heavy premiums remain in place for big bar silver at retail. I continue to wonder how this happens; melting down the big COMEX bars and reselling them for a now-16% profit just doesn’t seem like rocket science to me. “Someone oughtta do something about this.”

Economic Reports

Fed Balance Sheet: 7719.6B, +26.1B, Liquidity Swaps: 832.0M, +42M, Reverse Repos: 229.2B, +19.6B, Treasury Securities: 4921.3B, +9.7B, MBS: 2234.8B, +13.4B. The Fed didn’t buy many treasury bonds this week.

Gross Domestic Product: 21,494.7B, +324.5B (+1.51% q/q), -252.7B [-1.18%] y/y. GDP is almost back to pre-pandemic levels.

Median new home sales price: headline 349K, -3.8K (-1.09% m/m), SF new home sales: 775K, -173K (-22.32% m/m), monthly home supply: 4.80, +1.00 (+20.83% m/m). We saw a drop in prices, a huge drop in # of homes sold, and a large increase in supply, possibly due to rising mortgage rates [Jan: +7 bp, Feb: +24 bp, Mar: +20 bp] to 3.17%.

Durable Goods, new orders: headline -1.16% m/m (prior +3.36% m/m) capital goods new orders (excl aircraft): -0.78% m/m (prior +0.60% m/m) shipments: -3.64% m/m (prior +1.66% m/m). Recessionary.

Auto/Light Truck Sales: headline -6.05% m/m, Auto Sales: -8.76% m/m, Heavy Truck Sales: -17.48% m/m. After almost recovering to pre-pandemic levels, auto sale are headed lower. That’s recessionary.

Summary

Gold, silver, and the miners moved lower this week, with silver leading the way. Yet on Friday, the miners staged a reasonably strong rally, and may be hinting that a low might be near. Miners do tend to lead, and so this was good news for the metals group overall.

Risk assets were mostly positive; SPX made a new all time high, crappy debt and copper rallied too, while crude moved slightly lower on some really large daily back-and-forth moves.

The buck rallied to a new 5-month high. This is not helping the metals, at least not the charts quoted in USD anyway. Gold/Euros looks a little bit more positive, at least in the short term. Money seems to be flowing into the US, and out of Lockdown Europe.

Bonds also recovered somewhat; for bondholders, the -7 bp move this week was a welcome relief from the relentless increases seen over the past few months. It is likely that the recent sharp increase in rates (especially in the 30-year mortgage rate) helped in reducing some of the froth in the housing market.

The summary of the news this week:

Some more evidence on that much-delayed “press conference” on Thursday: a picture of that “cheat sheet” of acceptable journalists to call on – complete with pictures, names, the outlets they worked for, and numbers indicating the call-on order. Another picture shows the “Infrastructure” cue card: you can see the text clearly: “The United States now ranks 13th globally in infrastructure quality – down from 5th place in 2002.” The whole thing really was remarkable.

https://nypost.com/2021/03/25/biden-used-cheat-sheet-during-his-first-press-conference/

Can you imagine the uproar if the Bad Orange Man had to use these sorts of memory “crutches”? This would have dominated the news cycle for weeks, if not months. “25th Amendment” would be the talking point, 24/7. And of course China is ecstatic. Putin wants a debate. The credibility of the American nuclear deterrent approaches zero. Would the military even follow orders if Old White Joe decides to launch a nuclear strike?  Let’s hope they’d defer.

This story is guaranteed to explode. The only question is, when? CNN gives us a clue: there were no mentions of “cheat sheets” on CNN that I could see. Old White Joe did well enough in the press conference to remain useful to the Donors, for now.

Even so, MSN picked up the “cheat sheet” story from The Daily Mail. The clock is ticking.

https://www.msn.com/en-us/news/politics/images-from-bidens-first-press-conference-show-him-using-cheat-sheets

There was a 5-hour hearing on Capitol Hill (Defunded Police for your neighborhood, National Guard and Razor Wire for theirs), wherein a handful of Tech Oligarchs were badgered by Congresspeople to engage in more censorship of narratives displeasing to the Donor Class. The theory being, “the Government can’t silence individuals, but you Oligarchs sure can. So get to it or else we’ll regulate the crap out of you!” Was this hearing this just theater? Maybe not: Glenn Greenwald suggests that @Jack may be getting tired of this game. This would be interesting – a crack in Oligarch solidarity, if true.

https://greenwald.substack.com/p/congress-in-a-five-hour-hearing-demands

Over the course of five-plus hours on Thursday, a House Committee along with two subcommittees badgered three tech CEOs, repeatedly demanding that they censor more political content from their platforms and vowing legislative retaliation if they fail to comply…

Related: the Bad Orange Man is allegedly forming his own social media site. He probably gets tens of millions of users on day one. I wonder if this influenced @Jack’s desire to dodge the latest round of censorship-on-demand edicts coming from the razor-wire-protected Donor Enclave in Washington? That, and perhaps the fact that TWTR’s stock price has been pounded down -20% over the past month. Nothing gets your tech Oligarch’s attention like a brisk 20% drop in your net worth in a single month.

https://www.foxnews.com/politics/trump-social-media-platform-return-adviser

Whistleblowers in the CBP have released photos of “kids in plastic cages” (my framing); turns out, whistleblowers are noble when they complain about the Bad Orange Man, but they are to be studiously ignored when they release photos that run against the Donor “We Want More Cheap Nannies & Gardeners” narrative.

Problem is, The Donors are in the process of losing WAPO. Perhaps the current Donor media blackout on CBP will eventually be seen by even the readership of WAPO as problematic; the currently credulous ordinary people reading the paper might actually consider that famous tagline, “Democracy Dies in Darkness”, to be more than just marketing hyperbole.

The complaints about the press blackout are written in the third person right now — but for how long? How long will they allow “darkness” to be imposed without complaint?

https://www.washingtonpost.com/politics/2021/03/23/power-up-we-are-anxious-democrats-wait-biden-administration-handle-border-surge/

The administration is also facing pressure to lift media restrictions on visits to detention centers. Cruz sent a letter to the Biden administration requesting that media be allowed to join the Senate delegation visit, and Castro’s office noted in its release that their oversight visit will be closed press, per ORR guidance. No press was allowed to accompany the Senate delegation with Mayorkas.

Finally, as you probably know by now, this will be my last report – at least for the near term anyway. I am off to the beach. Ever write daily reports for 8 years straight? You should try it sometime.

I’m not going to say anything about what I’ll talk about upon my return – at which point I’ll be a humble member. After all, I want to survive my holiday without some sort of “multiple blunt force trauma – suicide” event.

https://newspunch.com/pharma-exec-suicide-blunt-force/

Heh. Had to end on a happy note. 🙂

  • Sat, Mar 27, 2021 - 08:13am

    #2

    pinecarr

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    Thanks Dave!

Have a good vacation, Dave!  Thanks for all your contributions in your column, in both the PMs and beyond.

  • Sat, Mar 27, 2021 - 08:37am

    #3
    David Turin

    David Turin

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    Oligarch — how to get their attention

Nothing gets your tech Oligarch’s attention like a brisk 20% drop in your net worth in a single month

Classic.

Thanks again, Dave.  You know where to find us.   Have fun on your vaca and “don’t forget to write!”

  • Sat, Mar 27, 2021 - 09:01am

    #4
    Ann

    Ann

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    PM Weekly Market Commentary – 03/26/2021

thanks Dave.  I will miss the market info but will not miss the one-sided political commentary.  I thought this site tried to stay politically neutral.

  • Sat, Mar 27, 2021 - 09:29am

    #5
    agnes xyz

    agnes xyz

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    PM Weekly Market Commentary – 03/26/2021

I’m assuming you’re joking about the possibility ‘some sort of “multiple blunt force trauma – suicide” event.’ It can’t be that bad.

However, in case you’re serious, you may want to have what’s called a “dead man’s switch” installed, so that if the horrible event occurs, the tell-all will show up somewhere immediately. I assume that’s what Julian Assange had/has, so he had/has to be kept alive to keep more tales from automatically hitting the wires.

But I doubt you’d need anything close to that. I more than doubt that. Just playing along.

Happy freedom day.

  • Sat, Mar 27, 2021 - 09:54am

    #6
    davefairtex

    davefairtex

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    hahaha

Ann.

thanks Dave.  I will miss the market info but will not miss the one-sided political commentary.  I thought this site tried to stay politically neutral.

I’m a registered Democrat.  Voted for Obama.  Even contributed to his campaign.  Apologies for this “one-sided political information” about my Obama support.

Mr Biden is just the sock puppet of the Oligarchs right now.  I’m sure if things were just a little bit different, they’d have slotted in a compromised Republican sock puppet, with a bunch of slightly different narratives used to install him.

Ever notice how many dissenting votes those Defense appropriations have?  Like 3?  And that AUMF vote after 9/11?  1 dissent?

My dream: for the Deplorables and the Bernie Bros to wake up one day and notice that they have a whole lot more in common with each other, than they do with the Oligarchs that run the place.

Is that political?

Agnes-

I’m mostly-kidding about the blunt force trauma.  Mostly.  🙂

  • Sat, Mar 27, 2021 - 11:36am

    #7

    Tycer

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    PM Weekly Market Commentary – 03/26/2021

Happy vacation Dave. Thanks again.
If you’re ever near Asheville let’s have a beverage.
Cheers,

Tycer

  • Sat, Mar 27, 2021 - 12:12pm

    #8

    JAG

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    You go Ann!

Ann: thanks Dave.  I will miss the market info but will not miss the one-sided political commentary.  I thought this site tried to stay politically neutral.

That was true of this site back about 10 years ago. Unfortunately, now, the whole world is one-sided political commentary.

Today it’s a war of words, tomorrow it’s a civil war. It will end in the senseless death of our children. Survival will favor the politically-agnostic, if you are lucky.

 

  • Sat, Mar 27, 2021 - 12:35pm

    #9

    roosterrancher

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    PM Weekly Market Commentary – 03/26/2021

THANK YOU DAVE! You have been a hoot to read every day! I learned a lot

Rob

  • Sat, Mar 27, 2021 - 12:53pm

    #10
    davefairtex

    davefairtex

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    one more time

Well, it appears as though someone missed the money shot.  Once again:

My dream: for the Deplorables and the Bernie Bros to wake up one day and notice that they have a whole lot more in common with each other, than they do with the Oligarchs that run the place.

From what I can tell, Glenn Greenwald seems to feel the same way.  We just both approach the issue from different angles.  I just wish more people were as perceptive and open-minded as he is.

Eh, no matter.  It is now time for vacation!

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