Key ETF charts are a snapshot to current technicals, not comprehensive technical analysis.
GLD bumped above the lower end of resistance yesterday and is support for any continuing S/T rally activity. The big test is in the 123 to 125 area and the nose of the former Symmetrical Triangle.
SLV failed and climbed back above support. As noted in NFTRH, “watch silver” because its CoT data and weekly chart have been at levels that imply the ‘break up or break down?’ question could resolve ‘up’.
SLV-GLD has continued to lead and has spent the last few days above the MA 50’s, a positive for the sector.
GLD-SLV (GSR) flips the situation over for an alternate view. If the GSR breaks down, pressure would come off of the precious metals sector and possibly (though not assuredly) go along with a market blow off scenario.
GDX-GLD is back above resistance (now support) and joins the Silver-Gold ratio as a positive indicator. New resistance awaits at the declining moving averages and lateral traffic congestion (red).
GDX held the important support we noted at 22 (equiv. of HUI 205 parameter). Resistance is above. While not shown in this update, we should recall the weekly views of GDX/HUI, which ID the ‘205 parameter’ as a potential right side bottom area on a large Inverted H&S pattern, which would be bullish if it proves out.
GDXJ is added as it bashed through resistance yesterday. More resistance is above at the SMA 200. As with silver, watch GDXJ for leadership. Yesterday’s volume had conviction.
SIL made a nice move above resistance and will try to turn this to support. The next resistance is the declining moving averages.
10-2 Yield Spread is still a non-confirmer of the precious metals bounce.
GLD-DBC and GLD-USO are constructive to bottom and still bearish, respectively. Gold vs. commodities, especially should be watched. But sooner or later Gold-Oil needs to turn up as well or the miners simply would not be anything more than a trade.
DBC popped to resistance from support. It has the messy look of the “mixed bag” theme we have been noting in commodities.
DBA continues on its bearish way after the mini mania blew out.
USO continues to rise and is bullish. Not shown is the 2013 high of 39.54, which would be the next resistance point to watch.
UNG made a weird candle (a stockcharts data glitch?) and is still below resistance but above the long term breakout point. The chart’s pattern is messy and this is neutral.
URA could be hammering out a little bottom pattern/double bottom, for you U fans out there. This is still in breakdown mode below the resistance shown, however.
TLT is sneaking out of its uptrend channel but would try to find support at the MA 50’s. A failure there and we’d need to pay attention to a rising rate scenario.
TIP-TLT should be watched closely. If TLT drops (rates rise) and TIP-TLT finds a bottom (per the little pattern forming) a phase of increasing inflation expectations could be upon us.
SPY is only more over bought than it was as noted last week. The market is due for a correction, we all know that. This is the gateway to a terminal upside blow off. If it does not correct soon…
QQQ has established new support in making a higher high to March.
XTN (Transports) is very over bought.
SMH (Semi’s) is very over bought.
KBE-SPY ratio is bouncing after making a lower low. It is still a bearish marker or reference point going forward.
HYG-TLT (Junk vs. long term T Bonds) is also bouncing but like KBE-SPY, is still a negative marker for the markets. It is also a gate keeper to a potential manic blow off in the stock market.
EZU broke up from the wedge and continues to be bullish. It is about as far as it usually gets from the 50 day averages, but is not strenuously O/B as in the US.
EWP is right in line with Europe. EWP is a PIIG(S), so how healthy is Europe? Probably less so than the US, which itself seems to be dependent upon bubble making.
EEM has spent another week firming its bullish case. Ref. weekly charts in NFTRH awaiting a break through longer term lateral resistance on MSEMF. The high of the last 3 years (not shown on this chart) for EEM was 44.35 in late 2012. Almost there.
FXI continues to follow the Inverted H&S script and remains bullish. It is also over bought.
Bottom Line
- Precious Metals make some nice moves off of the critical parameters equivalent to ‘HUI 205’, which is a positive to our long term bottom pattern plan. The fundamentals NFTRH cares about are not yet in line, with the state of the 10yr-2yr yield curve and gold vs. oil being the worst and a possible bottom in inflation expectations being the best, if you can call it that at this point. PM’s are still in ‘bounce’ mode, but we will watch for continued strength and resistance objectives in order to turn it to ‘rally’ mode.
- Precious Metals Indicators like silver vs. gold and HUI/GDX vs. gold are making positive signals, and we will continue to respect the idea that the technicals could turn before the macro fundamentals do. Notice we do not talk about USD? That is because people chasing currency analysis around are barking up the wrong tree. What would be good for gold could also be supportive of USD. That would be an environment where risk goes ‘OFF’ and the contraction theme comes on.
- Commodities are a mixed bag and still of little interest from an investment PoV at this time. This is not to say that certain items (hello Palladium) are not on good ramps and getting hedge fund attention. Ref. Agricultural and Uranium earlier in the year.
- US and Global Stock Markets are varying shades of over bought, with the most intense O/B’s going on in the US, especially in leaders like the Semi’s and Tranny. The question ‘market correction or manic upside blow off?’ is still in play, but Team Blow Off is still trying to make its case. A dangerous market from a risk vs. reward standpoint.
