I could write a long, detailed post trying to encompass global stock markets (generally bearish), commodities (bounce very mature) and bonds (mixed views, depending upon the flavor) but that is what I get paid to do each weekend in NFTRH reports and in private posts at the site. The beauty of public posts is that I can write as much or as little as I feel like writing. Today I feel like writing a little about gold (and silver) and the stock market. I also feel like using daily charts because I think time frames are pinching in for upcoming pivotal moves.
Gold is in a rather orderly Handle to a short-term Cup & Handle. Personally, I think gold and the precious metals complex need a correction because [insert CoT, Sentiment and over bought reasoning here]… But the chart thinks otherwise. If the Handle breaks upward and gold exceeds 1300, the measured target is to around 1370. It if goes the other way, watch for support beginning at the October high of 1191 down to 1180, figuring for wiggle room.
The Gold-Silver ratio continues to show a bottoming stance after hitting deeply over sold levels. I like to use Silver-Gold when projecting a beneficial asset market environment and I like to flip it over to Gold-Silver when projecting a dangerous one. Well, it is flipped over…
This would not bode well for a stock market living on inflation expectations, because it sure is not living on corporate profit acceleration or guidance, apprehensive market sentiment or technical events like a higher high to October, close though it came. If the 50 day moving averages give out, look lower on the S&P 500, which is already losing momentum by MACD and RSI. The next stop could be at around the 2000 round number with further bearish probabilities if the SMA 200 were to give way.
Gold is the first mover to new inflationary environments and silver is the best mover when it gets going and takes over leadership. Silver has led since mid-February (as noted in this post) and wouldn’t you know it, the stock market has rallied since then. But now silver’s leadership is in question.