In the event that this is just a correction – which technically speaking is all that it is at this point given the market’s up trend – I want to illustrate some buying opportunities for those who do not see a bear market beginning here. I am leaning that way myself.
The first is in the Industrial metals (IM), which we’ve noted were part of the ‘inflation trade’, rising with long-term interest rates. Yields topped as expected, but quite possibly only temporarily. In the event the economy holds up (and the metallic indicators like IM/Gold recover) a bullish person would note that the IM miners have not lost their up trends.
Here is the big picture monthly chart once again.
Here are the daily charts of XME and TECK (large charts, click to expand for clarity).
The above is an ‘inflation trade’ vehicle. The Tech sector is it own animal and the animal is still in a series of higher highs and higher lows.
The weekly gives perspective to the trend. There are things not to like here, like the MACD’s shape and RSI retesting the 50 area, but the trend is the trend and it is up.
The bottom line is that if the bull market is over, all the charts above will probably fail. But if this is just a correction, their intact status could lead an eventual recovery out of the correction. The still intermediate bearish state of Treasury bonds and gold’s failure (once again) to get a move on are other considerations to a bull case. The charts can ease further within the contexts of the still up trending charts, but they are getting close to the decision points, which are higher lows to the November lows on the IMs and a higher low on QQQ to the February low. Those decision points also generally provide a ‘stop loss’ to a bull view.
Just trying to put out some balanced information before I have to take my eye off the market again for about the 20th time this week.