NFTRH; Multi-Market Update

Admin note:  An unexpected commitment has popped up and I will be on the road today and tomorrow.  I think we’ve illustrated well enough what is in play for many markets so I wouldn’t think I’d have been sitting in the micromanagement seat, anyway.  But in the event something goes on that you might think warrants an update and there is none, that would be the reason.

As noted in NFTRH 434, yesterday had no significant data releases or events.  Today, with Yellen’s jawbone on tap, we begin a hype and data rich week that could ripple the markets.  In that context, I thought I’d take a snapshot of various items using daily charts.

SPX is doing what it was supposed to do, which is rise toward or to 2410.  RSI is getting overbought, but MACD looks bullish.  I began a short against SPX yesterday per a public post, but it is nowhere near current long positions in size.  I continue to be in greedy profit taking mode on longs and the short too, if applicable (considering the upside target).  If it spins off a short-term paper loss I have not decided whether I will hold it like a patient future bear or cut bait.  Cash continues to be the best risk manager until the market transitions to a favorable shorting environment.


Europe made a test of the SMA 50 and popped back above its short-term moving averages.  Overbought readings have been eliminated so this index is free to bull if it should so choose.  RSI looks good above 50 and its EMA 20.


Canada is bullish, making new highs after testing the SMA 50 (a guide for Europe, above?).  Interestingly, where once it had been in good correlation with the US Energy sector, the two have diverged in recent weeks.


Japan held the SMA 50 as well and is participating in the global party.  The Yen, while looking suspect, has not broken down.  If it does, Nikkei will probably motor higher.  If not, it probably won’t.


Looking at commodities, the view continues to be neutral.  CRB is grappling with the SMA 50, but key support is the 190 to 191 area.  A loss of that support flips CRB to a more bearish view.


Oil is similar.  It’s at the SMA 50 and 51 is the key support level.


Copper looks like it could continue to surge to the upside.  Our monthly view of major resistance is at 2.90 to 3.00.  This daily pattern just happens to target that area as well.  The Commitments of Traders paint a bad risk vs. reward.  At 2.90 to 3.00, copper and copper related items are a sell in my opinion.


Gold has a shelf of short-term support at around 1215, where the EMA 20 also resides.  If that were not to hold, it would be very key for gold to hold the now upturned SMA 50 and ‘higher low’ to the January low.  Gold is the asset-in-waiting for when things turn for the worse on the macro.


Silver broke its downtrend channel but has now met resistance in the form of the SMA 200.  If it can get through there and turn it to support, the next key level would be 19 and the November high.  If it pulls back, watch for 17.25 and then the 17 area and the upturning SMA 50 for key support.


Silver-Gold ratio (SGR) has been firm lately, and gaining relative volume.  But the pattern, while bullish tinged, has not broken out.  So sideways we go, remembering that a bullish SGR would generally go along with bullish commodities and global asset markets (risk on) and a bearish SGR would indicate stresses in these markets (risk off).


Huey is trying to follow his fellows, who made higher highs to November (XAU index and Junior Miner ETF GDXJ) but like silver, has halted at the SMA 200.  Interestingly, the silver ETF (SIL) has not made a higher high to November either, despite silver’s recent out performance to gold.  Key supports for HUI begin at 210 and extend down to 195, at the upturned SMA 50.


Finally, since HUI has so many different data points, let’s pull out a weekly chart again to show the EMA 55, which had been key resistance during the bear.  This view adds support at 200 to the two levels noted above.  RSI has gotten back above 50 and the weekly EMA 20.  MACD, while still negative, is up triggered and constructive.

hui weekly

While not a comprehensive update, I hope these (mostly) daily views help give some perspective on certain markets.  See you later in the week.