NFTRH Update 7.22.13, Next Precious Metals Objectives, US Stock Market

As a reminder:

  1. Gold has significant resistance at the 50 day averages (1335 to 1338) and visual @ 1350.
  2. Silver at the 50 day averages just above 21 and then visual at 22.
  3. HUI at the 50 day averages at 248/249 and visual at 245 to 255.

Yet this morning’s up surge looks to firm the initial positive signals like the MACD divergence and up trigger.  So the next technical objective is to get through the above noted resistance and hold there.  This would then start making positive things happen on the bigger picture weekly charts – like firming the MACD signal and getting HUI through the weekly EMA 10 at 247 (noted on page 13 of this week’s report).

Also, I want to see oil top out or more importantly for gold to make a statement in out performing oil (preferably both) going forward.  The same goes for gold-industrial metals, gold-stock market, etc.  This is how a case for higher confidence in a sustainable rally would be made.

We never were going to bottom tick the bear, so if this is an important bottom we will not have called it.  But beyond day trading none of it matters because a real rally will surmount the minimum objectives noted.  If the rally firms its signals, we are looking at potential targets of anywhere from 340 to 375 on the HUI and the big breakdown resistance levels on gold (1524) and silver (26).

If pre-market is a good indication, there will be a strong push today and I am going to look to add to quality positions if/as they lag or on sector pullback days.  But this will be done with an eye toward the above noted conditions that I’d like to see along the way.  The ultimate goal is to let positions ride, not to once again have to abort.  Only through a firming of these conditions can I personally let it ride.

On the stock market, given the negative correlation between them, I’d expect any kind of real statement in the precious metals to start the clock ticking on the stock market’s rally if not bull market.  When I wrote about profound changes ahead, I was thinking about shifts of current trends like the counter-cyclical gold sector’s bear and US stock market’s bull.

So a condition I want to see on the market is for a terminal over bullish sentiment backdrop (it’s close, given the AAII and II graphs shown in #248) and some negative divergence start to show up.  The semiconductors may be diverging already and then we’d look to the small caps to top out.  Then perhaps Tranny, etc.

The markets should be interesting going forward.  Sleepy summer or not.