Data came in weaker this morning with a home sales drop of 3.3% in February. The ‘all one market’ market is cheering to banish the evil spirits released by Janet Yellen last week. Those would be the rising short term interest rate spirits and they are key to our fundamentals.
The 5 year yield is easing a bit. The market (including the precious metals) likes that.
More importantly, the 30 is rising vs. the 5…
This needs to find a bottom for our precious metals theme to remain okay.
As long as the SOX is doing this, I for one am not bearish the stock market…
GDXJ has retraced 50% of the rally already, filling a gap (a good thing). We cannot rule out a further drop to the 62% retrace around 35.
The same could be said for GDX and the 23 area. These are both below their 50 and 200 day moving averages and as such, are vulnerable.
Of course what is more important to me (than micro managing these technical pullback levels) is getting the fundamental backdrop back on track. When I see that happen I am a strong bull and correction buyer. Today is a little step in that direction with the economic data and interest rate response.
This update is just a quick snapshot for you to consider.