Turning to the precious metals first, HUI made it to 175.62, which is a little lower than the ‘+/-‘ we have been tagging with the 180 target. RSI held below 50 and while it could just be filling a little gap from last week, it does not look overly inspiring. We continue to let those who obsess on the precious metals as if it is the only market on the planet micro manage this. Nothing has changed yet, and that includes the fundamentals. There is no actionable bull signal beyond the bounce. 180 +/- remains the target for now, but this thing must get in gear quickly.
Here is what gold did yesterday at least partially on Middle East geopolitical tensions hype. Boink, right to a potential limit point and then a reversal. I know that it does not have to be repeated as to why this (gold as a geopolitical safe haven) is the worst hype possible for gold. We have now documented its effects numerous times in just the last year.
The point I want to reemphasize on gold is that yes, the CoT data were repaired but considering that silver’s CoT never did get to the most bullish points it did in 2014, we remain open to the idea that the CoTs could experience a small reversal (with the current metals rally) prior to bottoming out the trend. Ref. NFTRH 335 and previous notes about this.
The precious metals are not yet indicated to be bullish beyond this bounce, and if HUI does not resume upward quickly, 175.62 could end up being the high point with stocks indicating the metals will again weaken.
I did a little Vaudeville act yesterday with the SPX bounce targets. Sorry for the extra noise. I try not to be that guy. Here is the current view. The MA 50’s could still act as resistance and I have drawn in a dotted line to more clearly define that area. Yesterday’s high of 2067.15 would be the key for the bear case to hold below otherwise the 2090 bounce point would come into play.
Several key markets are holding their 50 day averages. These include the Banks, Small Caps and Biotech (momentum leader). SPX, NDX and Dow are below their MA 50’s. So too is momentum leader SOX, which is way below and now dropping toward a test of the SMA 200.
My orientation remains the same… cash and waiting to see if more indexes break below their MA 50’s. Those with risk tolerance can short the likes of SPY, QQQ, etc. using the MA 50’s as a tight stop with a target being a test of the MA 200’s, which in the case of the SPX is near 2000, which has been one of two key potential correction targets (along with 1900).
Europe is relatively strong in line with our 2015 theme thus far, but Euro indexes are stretched to the upside and new buying should wait for pull backs if one wants to bull Europe. Canada, Asia and Emerging are all varying shades of bearish to unpleasant looking, technically.
See you Sunday with NFTRH 336, which will quiet things down and update the situation.