Part of my job is to tell you what the charts say and this chart says that SLV is breaking down from a trend line and its 2x inverse, ZSL, is breaking up from one. One is below its 50 day moving averages and the other, above.
Separately, HUI has not even filled the gap at/below 220 and today’s ‘jobs’ report was not gold positive. Also, with yields rising today the spreads have lurched toward unfavorable to gold although they remain in their daily up trends.
We should continue to respect the idea that precious metals are looking ahead to an inflection point, not a current trend of positive fundamentals. The 2nd to last thing I want to do is be a bearish voice when I should be a contrarian bull (ref: Q4, 2008 when the sector crashed but fundamentals were screaming “BUY!”). But the very last thing I want to do is wear rose colored glasses.
Fundamentals are fundamentals. As long as policy is working toward desired ends, they are not particularly positive for precious metals in my opinion. As of 12:36 US Eastern Time policy is working. That could change at 12:45 or it could change in March of 2014.
As noted several times in the past, there will be plenty of time to catch a real rally if things go to bull signals, even if the first lurch higher is missed. That is why the ETF updates are looking for MACD, trend lines and moving averages all together. The recent try almost got there, but no cigar.
HUI’s parameters are the ‘220 gap’, the 211 October low and the increasing possibility of an IHS, with a theoretical Head at 170 +/-. Below that, is the 100 target off of the old topping pattern that a subscriber recently reminded me of. That has been taken out of rotation since the weekly MACD and TRIX triggered and a bottoming pattern formed. But it is the final parameter, unexpected though it may be.
Meanwhile, it makes no sense to obsess upon precious metals and it makes a lot of sense to manage the macro, which has become very interesting in so many ways. As strange as it sounds, we are privileged to be participating in this market. It is historic. I look forward to covering it this weekend.