ETF updates are meant as a snapshot of the current technical situation, not a comprehensive technical review.
GLD broke down from the Symmetrical Triangle, which is often a ‘continuation’ pattern as previously noted. It is now in a well defined support area and at a 62% Fib retrace of the early 2014 rally. The Triangle measures to approximately 120.
SLV dropped into the support zone as well. 18.16 is the 2014 low, followed by the 2013 low of 17.75. These are either bottom support or silver will break down by the weekly chart’s ‘break out or break down’ view.
GDX made a hard break down from support that it had barely been clinging to. The 22 area is equivalent to the ‘HUI 205’ parameter and is important support. Note that RSI (not shown) is getting over sold as per HUI chart shown in yesterday’s update.
SIL broke the upper support level and must find support at around 11 to avoid serious damage (on a bigger picture view).
SLV-GLD is interesting in that silver remained buoyant vs. gold even to the point that it looks like a potential short term bottom. A break above the MA 50’s would further the case. A rising Silver-Gold ratio would likely relieve pressure on the sector.
GLD-SLV flips the situation over and is still in a series of higher highs and higher lows as previously charted. Again, taking out the MA 50’s would be a first step toward a breakdown of this ratio.
GDX-GLD crashed the support zone after having maintained a bearish stance below the moving averages. So if SLV-GLD looks like a positive, this remains a negative unless support is re-taken quickly.
GLD-DBC and especially GLD-USO add a bearish marker for gold mining fundamentals. There is no way a hard decline in Gold vs. Oil would be a welcome event. Note however that due to ETF related anomalies GLD-DBC is making new lows but actual Gold vs. WTI Crude is still above both the July and December lows. This must reverse upward for the gold mining fundamental case to come back to life.
DBC has short term support at the MA 50’s and more support near the SMA 200 as noted. This looks like a bear flag breakdown in the making, in which case the high 25’s are doable.
DBA continues on its bearish way as our ‘mixed bag’ of rolling commodities theme continues.
USO got above resistance and will now try to turn it to support. There is more resistance at the September high.
UNG continues to hold the long term breakout support line but is below the MA 50’s. It is neutral to bearish below the 50’s. A break above the 50’s puts it neutral to bullish and a break below support, very bearish.
URA is back on radar due to its sneaky bullish MACD and potential double bottom. Thick resistance is just above.
TLT continues to work its way up in a channel while MACD looks like it could roll over.
TIP-TLT continues to show little overt concern about inflation. A commodity based ‘inflation trade’ would want to see this bottom and turn up.
SPY sees a shooting star candle, high downside volume and a down triggered MACD and says… BULLISH! Risk rises right along with price, but price is rising and that cannot be argued until it changes.
QQQ smashes key resistance and now tests the highs. This illustrates why strict ‘stop limits’ must be used in trading (ref: NFTRH+ bear trade, neutered right at that resistance break).
SMH chose its direction and it is up. The series of lower highs is broken and a test of the highs upcoming. Of more interest is that the 10 year breakout held and thus our upside market blow off scenario has an ally in the semiconductor sector, which we used to gauge a coming bull phase in the first place (Jan. 2013).
KBE-SPY continues to indicate the loss of leadership from the Bank sector. At some point this should be relevant, as the banks led the S&P 500 for 2 years and it can be argued, were the ultimate targets and beneficiaries of the Fed’s outrageously easy monetary policy.
EZU: “Bearish wedge? I don’t think so.”
EEM is testing its short term breakout. Longer term as we have shown by weekly and monthly charts, it still has more work to do to give a lasting bullish signal.
FXI continues with the Inverted H&S script but is right at important support. A loss of support would bring on the 35 area. I realize it is a potentially bullish pattern and that we were the first to identify it (that I know of), but I am lukewarm on this until the SMA 200 is exceeded. Also ref. the weekend analysis showing FXI in a long term sideways stance.
Bottom Line
- Precious Metals: Breaking down pretty much as expected after having languished below important moving averages for so long. Silver out performing gold on the short term is a bullish hint. As noted above, there are bearish hints as well. GDX 22 (equiv. HUI 205 +/-) is very important support. Gold, silver and especially the miners are getting over sold (by RSI, not shown) and normally we would want to be all over this. But stubbornly, this market watcher at least is watching for some fundamental signs (and/or technical signs in other markets that could be indicative of a coming precious metals bull phase; it’s complicated, I know) to go along with a would-be bottom feeding stance. If/when identified, we will update.
- Commodities: Still a mixed bag of rolling (and sometimes hyped) speculations and NFTRH remains generally disinterested other than for a trade here and there (ref: Lithium, etc.).
- Stock Markets: Still bullish and they will be bullish as long as they are bullish, if that makes any sense. The door is opening to mania, with the harshly corrected momentum leadership items recovering strongly (ref: Biotech, and technology in general). Europe is going great guns (see DAX chart for instance, in the public chart list available at the website) as the ECB, like the US Fed, appears to be in full (bubble) support mode while fighting the Deflation Straw Man. Stay tuned because this looks like it is is either going to accelerate to termination or reverse sharply.
