A quick check up on the current market environment…
TIP-TLT says no inflation expectations buildup yet.
Commodities vs. gold is breaking back up above the moving averages. A declining CCI-Gold has/had been one of the few positive fundamental underpinnings for the gold sector. It would also be a negative for the economy if it resumes breaking down.
Palladium-Gold took a sharp drop the last 2 days but is still in its rebound back above the moving averages. This too is a fundamental gold indicator because it is an indicator on the economy, and it is still positive.
The 10yr-2yr yield spread remains constructive for the stock market and the financial system and not constructive for gold.
The negative divergence to speculation is still in play by HYG-TLT, which are in risk ‘OFF’ mode but bouncing a bit.
The Banks are back up into the former uptrend channel and threatening resistance and new highs.
Bank leadership to the S&P 500 is still in breakdown mode.
Leadership by the Small Caps continues to be broken.
Semiconductors are testing the former double top after finding support at the key long-term level we have been noting.
SOX-SPX is still in its intermediate uptrend channel (green).
The Internets are interesting here, back at the broken uptrend line. If it is going to fail, this would be the spot.
DOW: Can I go back to the Ascending Triangle scenario? Just kidding; the Triangle is gone but the Dow could well go to target anyway.
TRAN confirms the Dow, which is a bullish signal I guess.
Utilities seem to think interest rates will remain low.
So do the Homies, which are still in that Cup & Handle we have been watching for all of 2014.
Europe is back in the channel and back above resistance. I took a shot on Germany, per NFTRH 315’s analysis, via EWG.
The World is bouncing, having taken back the first resistance level.
Toronto as well is back above support.
CDNX vs. TSX is dead and so is inflationary speculation in Canada.
Nikkei and Yen… (insert picture and leave out 1000 words).
Currencies show further strength in USD, further weakness in the Euro, with commodity currencies and British Pound also bearish.
Finally, closing it out this chart fest with weekly silver, simply because the decline is so intense and is a lesson to us all in why risk management is so important.
Just this week someone is out with an article touting the industrial virtues of silver and a bullish case. This would be fine if the analysis had just cropped up now. Contrarians should be on alert. But the reality is that at 50 the touts were saying 100 and beyond. At 30 they were saying the same thing. At 26 they were saying major buying opportunity instead of using the word ‘potential’ and also noting that a failure there would bring on some nasty potentials.
Well, this is nasty and capitulation is engaging in the precious metals. If the economy holds up, silver may actually be more interesting than gold. If the economy starts to fall apart, the opposite.
Some indicators are negative to markets and the economy and some are positive. Trends are in play with US stocks up, precious metals and commodities down and global stocks trying to decide as they re-take some lost support levels.
I want to remain on alert that the ‘as good as it gets’ stock market scenario can fail, and at least a re-test of the October lows can come about in November. But right now the trend is up.