NFTRH; Stock Market & PM Technicals

Stock Markets

The US market is now just about at the limits of a ‘bounce’ vs. ‘bull continuation’.  Using SPY as an example.

spy

Junk bonds, while still in a downtrend, have a sneakily bullish look to them.  What’s more, considering Treasury bonds over bought as I do, the HYG-TLT (and HYG-LQD) ratio can bounce, implying a renewal of risk ‘ON’.

hyg

Europe is breaking to new cycle highs off of the ECB’s QE announcement.

stox

The Emerging Markets are following through on the bounce attempt we have been noting.  This despite the strong USD.  Interesting.

eem

More interesting still is EM’s vs. SPY, which is above the 50 day MA for the first time since last summer, which was when USD strength really began to kick in.

eem.spy

Bottom Line

I am continuing stick with the theme that favors certain global areas (China 25, Europe and now even possibly the EM’s) over US stocks.  Notes on this:  I am still trading some US stocks, but on a macro view see the global picture looking better out into 2015, assuming no major downside events in the markets over the next few months.

In that regard, the US market is at a point where it will either turn down again or start negating the modest breakdowns thus far in 2015.  It has bounced per our expectations.  Now it is decision time between bounce and failure or bull.

Precious Metals

For trading purposes targets were acquired for gold stocks at HUI 210 (GDX 23).  We have higher potential targets to 224 and 24, respectively on this rally leg.  This is based off of the weekly chart’s downtrend channel as shown in NFTRH 326.

The daily below is very clear.  210 was measured and attained off of the pattern formed by the November low and the December re-test.  Huey came to a channel top right at the SMA 200 and the pattern’s measurement.  Now at least a small decline is to be expected.

The low to mid 190’s now become support #1 and keeps it normal for short-term rally continuation.  There we have the rising EMA 10, lateral support and the channel bottom.  If that were to fail, a test of the SMA 50 (now at 172.52 and rising) becomes likely.

hui

Gold and silver have been getting over bought, with gold’s best target at around 1340.  It closed at 1302 yesterday.

NFTRH 326 noted that silver’s first major resistance is in the high 18’s.  It hit 18.49 yesterday.

Both gold and silver, like the HUI, have made good runs with gold breaking through its daily SMA 200 and silver and HUI stopping right at it.  So the 200 can be a limiter as well.  But in the absence of broken support parameters, the rally can continue to the upper targets.  The risk vs. reward continues to move toward risk when viewing the entirety of the rally from the secondary low in December.