NFTRH; Stocks, Yields, Materials/Metals, Gold, Silver & USD (med. priority)

Stock Market: Top-Test Still in Progress

There is little new in stocks since the weekend, other than the possibility that the market is beginning to relieve the pressure on ‘pro-yield’ sectors like Materials, Industrials, Industrial Metals miners, etc. Long-term US Treasury yields bounced a bit yesterday and are positive again this morning. Note that the anti-yields Utilities got hammered yesterday.

The stock market generally remains on the top-test grind with the VIX – on cue – dropping hard. We will evaluate the market’s risk profile along the way (expected to flash contrarian caution signals if not actual negative divergences in the internals). But for now, it’s as it has been… still up trending and still bullish.

Gold & Silver Pull Back on Cue

In NFTRH 507 we noted that the precious metals could take a hit at any time after the initial bounce, especially given the sharp rise in the HUI/Gold ratio above its still declining 200 day average. This morning the metals are down toward an apparent test of the lows they made last week. They should not make new lows or else one of two things would be in play…

  1. A final shakeout before a summer rally really gets going or…
  2. A failure, canceling the summer party for gold bugs.

At this time I’d like to stick to the original plan, which was for a pullback within an ongoing rally. But let’s remember at all times that the fundamentals are not in place yet (as evidenced by the big stock market rally yesterday, among other things) in order to stay grounded about this.

Uncle Buck Bounces From the SMA 50

Just as the precious metals pullback would be normal, so too would the USD bounce within a still-intact pullback scenario. In NFTRH 507 we noted USD was testing the SMA 50. Yesterday it poked down through it but reversed to positive. This morning’s follow through is completely in keeping with that. The thing was always going to get a bounce at its SMA 50. At 94.16 (currently in pre-market) it has bounced to the short-term EMA 20 and should not rise much above there in order to keep its pullback scenario in line.

More to come this week as events dictate. The above is a snapshot of what I see now.