alice

Post-FOMC Market Update, Precious Metals, Stock Markets & Commodities

To little surprise FOMC rolled over again, uttering a few words about inflation being below target and riding off into the sunset until September 21.  Now there is a vacuum, policy wise, in which the market can operate.  I am sure that if/as the economy continues to firm or inflation signals start to manifest the usual jawbones will hit the microphone circuit, admonishing us that they stand guard, but the market seems to be marginalizing these policy making clowns where even just a year ago it was still entranced by them.

Precious Metals; the Track is Clear

The result was that markets pushed FOMC aside and went about doing what they are going to do anyway.  For the gold sector, that meant continuing to bounce from the corrective consolidation it had been in.  Although I did not hit on the pullback target to the 50 day moving averages, I think we were close enough in the overall theme that unhealthy sentiment had been cleaned up and per Tuesday’s update, it was time to start buying (for those not already holding the greater bull rally, anyway).

Recall that over the last few weeks, while projecting the downward consolidation that may have just completed, we also opened up a target for HUI in the low 300’s.  Gold still has a target of 1400 open.  Silver dropped a mere buck and a half or so to the low-mid 19’s, never even sniffing 18, which I had thought was wide open.  Recall that the weekly chart most recently reviewed in NFTRH 405 has the next resistance area at 22.

Back to HUI, here is the monthly chart we reviewed in NFTRH 403.

hui.mo

After Tuesday’s update noting the additions of FNV and AAU I also added NGD and IKN’s BTG and SAM.TO, which were noted in the update.  Also, gold and silver bullion fund CEF was added back.

Stock Markets; Still Bullish, Still at Risk

Per a couple of public posts I have taken full profits on the Semiconductor iShares, SOXX.  The reason being that I am not that smart to have earned those profits so easily.  But at least I realize it.  Now, too many people are piling in and it just will not be that easy.  My tack is to go with individual companies now.  CCMP and CY were bought back.

The S&P 500 has been consolidating, but has the look of something that can take a short-term roll over.  Tech indexes NDX and SOX and the RUT popped to new highs yesterday, but SPX and Dow look tired.  Who wins out?

spx.vix

Sentiment in the US market is dangerous now, as we noted in NFTRH 405.  But as we also noted, manic markets can move up a long way during a high risk backdrop (ref. 1999-2000 for example).

We will stick with the theme that this is a bullish breakout in US markets, because that is the technical fact.  But we will also stick with the theme that this is a suck in of the final holdouts.  I am going to assume that this will be an extended upside affair as opposed to a quick throw over.  But per the SPX chart above, a stop loss on that idea continues to reside around 2090.  Volatility is almost non-existent (VIX in lower panel) and a roll over and test of the 2100 +/- area could come about at any point.  Either that or manic bull we go.

Global markets continue to be… India, Asia (ex-Japan) and Emerging Markets interesting and mostly bullish, commodity countries (Canada and Australia) bullish, Japan not yet bullish (BoJ on deck) and Europe trying to put on the pretense of a ‘W’ bottom, but still down trending.

Commodities; Still no Inflation, But…

There is no inflation… the Fed said so!  Or at least there is not enough of it for their liking.  Tell me again, how can this perverse body of macro manipulators not be thrown out on its ear by the people?

Anyway, CRB has dropped to the 180 area target.  This coincides with the SMA 200 (red).  Below that is crude oil, which is dropping to its SMA 200 (blue).  There is a lot of negativity about oil in the media now, but it is coming to support.  If you are an oil bull, this is where you’d buy/add.  For me, I am not such a bull just yet.

crb.wtic

Generally, commodities are at a make or break point, with “break” being a bottom retest scenario.  Best for bulls that they “Make” and hold in and around the SMA 200.

Bottom Line

Precious Metals:  May well have finished up a corrective consolidation on the way to new highs in the ongoing rally.

Stock Markets:  High risk in the US, sentiment-wise.  But bullish across the board.  Favored global areas are India, Asia (ex-Japan) and for now, EM’s.

Commodities:  CRB has hit the downside target that would be considered a normal and healthy pullback.  The SMA 200’s are the decider between resumed bull and bottom retest.