A technical snapshot of some key ETF’s using daily charts…
GLD remains bearish with a measurement of 113. There is support is at 115-117, however.
SLV is officially in a series of lower highs and lower lows. Any bounce would have to get above 20.70 to break this bearish alignment.
SLV vs GLD is still trying to forecast a bounce in the precious metals by maintaining support.
GDX lost the ‘220 equiv.’ support and SMA 200. 23 area is key if it does not break above above what is now resistance.
GDXJ held the thick support zone noted last week, but now bounces toward resistance around 40. A clear of 42 is needed to get bullish.
SIL wanders above support and below resistance.
DBC is bouncing but in poor technical state (CCI index is at 498.67, below key 500 level).
DBB is bearish below resistance.
DBA is locked in a firm downtrend.
USO remains bearish below 36.
UNG is bouncing around above support and below resistance. A break above 22 would be interesting.
URA is dreadful, with the May low as support.
While interestingly, the Uranium price has bounced. Is there a trade developing here? We’ll keep it on radar going forward.
TLT broke down as interest rates continue to bounce.
TIP vs. TLT has been bouncing in line with long-term T bond yields. The implication is for a bounce in the ‘inflation trade’ (commodities & precious metals) if the bounce continues and if long-term T bond yields rise faster than short-term yields. We’ll keep the 10 year – 2 year spread in focus as well.
SPY is above important short-term support but with MACD triggered down.
QQQ dropped from the pattern we noted in NFTRH 307 but bounced yesterday. Initial support has not yet been tapped. No real bear signals comes unless QQQ makes a lower low below 94. If the day comes that we see such a thing, it would be time to be aggressively bearish for a potential bear market. Just pointing this out as an example of why we have not become bearish for anything other than quickies.
NDX (QQQ) participation has been on a declining trend lately. We will start adding views like this to the weekly letter, across several indexes.
SMH lost and popped back above support.
EZU declined to the support level noted last week, and bounced.
EWP looks more bearish than bullish. This PIIGS is a Euro speculation gauge, which hit its upside target of 44 (+/-) and is watched now as a potential downside leader.
EEM bounced with most everything else on the planet yesterday. Back above 44.50 puts EEM back in more bullish situation. As it is it thus far holds ‘higher low’ support (to August), but looks suspect. 43+ is key to the bull case remaining in play.
EEM vs SPY is still in breakdown mode after it bounced yesterday. Let’s see if the SMA 200 can be recovered before considering renewing a bullish EM’s vs. US outlook.
FXI is still bullish above its SMA 50 and support. But the rolling MACD and the failed break above what is now resistance were negatives.
UUP continues to consolidate after exceeding our target and getting over bought.
FXE continues to consolidate after declining below our target and getting over sold.
Bottom Line
Precious Metals: Remain bearish. Beneficial indicators are GDXJ vs. GDX and Silver vs. Gold on the short-term (bounce potential?). Key (as in critical) big picture support remains HUI 205-210. We continue to hold open the prospect that September can end on a positive note, keeping the weekly and monthly charts’ bottoming stance okay. But the nominal charts shown above are bearish until the prove otherwise. Not the other way around.
Commodities: The bond market may be making a few signs about inflation, but then again we have a pretty big macro news release today at 2:00 US Eastern. Commodities went from “mixed bag” to flat out bearish and are now bouncing. CCI is below the key 500 level.
Stock Markets: US is the Good Ship Lollypop. There are plenty of issues, from valuation (as measured by traditional analysts looking at P/E, etc.) to market participation. But thus far things remain okay for the markets most people see.
Europe is iffy but we should note that the Euro STOXX 50 for example, looks better than the EZU ETF, which has some currency erosion in its price. Emerging took a hit and the China 25 is still okay but could be suspect as well. These are on watch to see if they can recover in the short-term. Notably, the EM’s (EEM) broke down vs. the S&P 500 (SPY), but the ratio is bouncing. This will be an interesting ratio to keep an eye on.
Currency: This week should go a long way toward resolving the ‘USD consolidate or correct?’ question. I’ll tell you one thing, there sure are a heck of a lot of USD bulls out there that I did not see a couple of months ago.
