NFTRH; Multi-Market Update, US/Global Stocks, Gold, Silver & HUI

2080 it is, as the gap fills.  That was our upper target per this daily chart.  I have started to reestablish short positions.  The balance of evidence still points to this merely being another sentiment bounce (with players I suppose cheering the fact that some members of the FOMC are not so sure about a December rate hike).  It seems ridiculous, but it is how these news-obsessed markets work on a day to day, week to week basis.

The tolerance to a bearish view is above the early November high, which is 2116.48.  Above that level (a higher high), especially on a weekly close could be used as a ‘stop loss’ on the near-term bear case.

spx daily chart

Here is old friend the 60 minute chart.  It’s main purpose is now history because that purpose was just to prepare us for something SPX had not done before in its post-September rally and the likelihood of a reaction at least.  The reaction came and now the reaction to the reaction is on.  60 min. RSI is getting to a point that has limited previous up moves, at least very temporarily.

spx 60 minute chart

The weekly dials out for better perspective and continues to have a domed roof on it.  As long as SPX is below that dome it still looks like a top.  But there is a reason we have alternative scenarios and that reason is that charts are just historical guides, not market directors.  This guide is telling us that generally speaking the market is doing what it did just prior to the bear markets in 2001 and 2008, but it is also doing what it did in 1998 and 2011.  So for now, the bear case is still in play but there are parameters to that case.

Last week may have been the downside reaction (again, possibly truncated by the Paris murders) that was expected in all comparative scenarios.  It is what the market does now that will likely determine a bear market or ‘bull mania up’.

spx weekly chart

In a public post yesterday it was noted that Biotech is breaking its downtrend line but Russell 2000 is still dealing with resistance.  Each of these could be momentum leaders if the market were to go bullish.

ibb and rut daily chart

Speaking of leaders, the SOX made it just about to its upside target and like other markets on the downside reaction, did not quite make it to its best support level before this week’s relief kicked in.  Above 690 it goes bullish and below the SMA 200 it can still be considered short-term corrective.

sox daily chart

Moving to Europe the measured target is 3600.

euro stox 50 daily chart

Nikkei continues to target 2000 and a gap of its own.

nikkei daily chartWith respect to my Canadian friends, these indexes are not shown that often because there is really not much to show other than a long-term bear market in CDNX and a newer one in TSX.  While they can bounce with the rest of the world, I don’t see anything definable on these charts.

tsx and cdnx

We had noted that over sold gold could dial up a bounce.  So far, no bounce.  Silver at the August low could be a key there.

gold and silver daily chart

In a previous update we noted that if GDX were to bounce, the target would be broken former support around 14.50.  HUI’s equivalent is about 118 at the 50 day MA’s.  Neither silver nor HUI have validated gold’s breakdown to new lows.  I am not sure why I feel this way, but it makes me want to be bullish for a bear market bounce.  Sometimes the gold market works in counter-intuitive ways.

hui daily chart

Here is what the positive divergence of HUI to gold looks like.  No great shakes, but it is something and it came amid much angst in the sector.

hui-gold ratio

Bottom Line

US Stock Market

SPX is still technically on a post-September rally, but needs to take out the November high to make a higher high, croak the bears and bring in the prospect of ‘mania up’.  So short of that, I’d expect this bounce to peter out and the bear trend to reassert itself.  A bear market would have to be acknowledged by all if the summer lows were to be taken out.

But this market is being very stubborn in either resuming its bull trend or establishing the bear.  All along we have favored the prospect that even if the market is going bearish, there would probably not be any alarming downside for the balance of 2015.  That is exactly what the market is doing, grinding.  Some weeks or months down the road a trend will either resume or be established and then things get easier.

Global Stock Markets

Still bouncing as indexes get close to implied targets of bottom/bounce patterns.

Precious Metals

A bear market.  If they are going to bounce, now would be the time.  This would only be for people who ‘play’ the sector until we get better fundamental and technical readings.  The funda will be found in places like currently adversarial Treasury spreads and currently firm (thus, adversarial) stock markets.  Other funda like gold vs. commodities, are in line.

Very generally, for a real (as opposed to a day trader’s) positive view we’d look forward to the prospect of gold topping out vs. silver and the gold-silver ratio’s fellow Horseman, the USD capping its mega rally for a correction.  I think these things are coming but too many people have been calling for a commodity rally and inflation.  The deflation story is very long in the tooth, but it could end in some fireworks as opposed to just gently expiring in favor of a new inflationary backdrop.