Well, it’s just a day. But after the big bounce back in stocks one set of indicators is not confirming the big upward burst. I took a look at PALL/Gold expecting to see the typical big bounce back that would in oh so predictable fashion begin to question the market’s bearish potentials. But instead…
PALL/Gold was down again and resides below the short-term resistance of the February and March lows. Resistance is somewhat suspect on a ratio, but work with me here.
The weekly is still below the EMA 45.
IM/Gold was also down a bit today after already dropping to daily breakdown territory.
With the weekly showing a higher low still in place but a lot of room between the current level and a would-be test of the 2017 low.
Finally, the Copper/Gold daily chart. Very ugly.
So you know me; I am not going to get hysterical and I am not going to try to convince anyone to get emotional. But I am simply going to note that on a big bounce back day for the stock market the cyclical metals failed to bounce in relation to a counter-cyclical and monetary metal (this despite a drubbing for the US dollar).
No single day should be judged as if its signals were rock solid. But for this day at least, a negative divergence to the big stock bounce back is in play with the failure of the relatively happy-go-lucky stuff (Palladium & Copper/IMs) to gain any traction off the breakdown vs. the more serious thing (Gold).