Now that we have a weak jobs report in the can, the cyclical indicators inch a little further to the forefront. That is because they are early indicators and items like the jobs report are lagging. Has the weakness we’ve been noting really led the start of economic softening? It’s possible because why after all, would be be using these indicators to begin with? To get clues for what’s ahead.
So here’s the post-jobs in-day view.
Semi Equipment continues to be fairly okay vs. broad Semi. If these two charts again lose the supportive EMAs there would be trouble, however.
Moving to the Semis’ companion indicator we used in 2013 for a positive economic cycle view, the look continues not to be good. Cyclical Palladium is continuing to decline vs. counter-cyclical gold.
With the weekly looking very concerning.
Industrial Metals vs. gold have been holding up better, but remain highly suspect below the SMAs 50 & 200.
The weekly seems to be doing what PALL/Gold already did a couple of weeks ago, which is test and (thus far) hold its breakdown.
Not to raise alarm bells or inject emotion. But I don’t want to have us miss any signals either. The above signals from a macro-economic and cyclical standpoint, remain suspect to bearish.
Note to gold bugs (incl. your letter writer): This is the type of signaling that would eventually bring on a real bull phase if the negative trends continue to firm.