I will be leaving today for a couple days on the road. I’ll have my laptop but will not be market watching very closely. So I thought I’d post an update with a snapshot of current market conditions (daily charts) in the event updating is infrequent or nonexistent over the next couple of days.
SPX is still at the bounce target (SMA 50). It should stay below the April high to keep this at a minor bounce status. A break above that level would open the potential for a test of either the January or March highs.
HUI is still viewed as being on its bounce, with a target of 190 (SMA 200). The SMA 50 is the support to that prospect.
HUI/Gold ratio continues to use the EMA 20 as support. With this ratio intact, it has been a still-constructive indicator for the precious metals on the short-term bounce theme. We noted a couple of weeks ago that the HUI/Gold ratio and US dollar had been fairly well correlated since the US election. So the strength in the ratio despite a strong USD is not surprising (to us, anyway). Note however that the ratio, as with nominal HUI, is still in a bigger picture downtrend.
Silver/Gold ratio is actually turning up today, and that is positive.
Not just for the PM complex, but also commodities (largely driven by oil).
Also the Industrial Metals miners are firm.
The Global (ex-US) ETF has a sneaky bullish look as it nests above the SMA 50.
EM continues to be weak under the pressure of a strong USD. It is testing the SMA 200 and if the dollar were to top out at its own upside SMA 200 test, EM could get relief.
10yr yields are popping again.
‘Inflation expectations’ gauges TIP/IEF & TIP/TLT are still constructive and could be signalling coming exhaustion for the USD rally.
And finally, gold’s ratios to Industrial Metals and Palladium look weak, which gives a similar inflationary message. This inflation signaling is also not a bad thing for stocks in general and so puts me on guard for the possibility of a bigger bounce than the SMA 50 (ref. SPX, 1st chart above).
Just a snapshot of how things look currently.
