NFTRH Update; The Process Begins… US Stocks & Gold Sector (high priority)

Okay, so the stock market cracked. We will look at daily charts of SPX, INDU, NDX and SOX to update the status and see what might be directly ahead.

Of more importance is that it is time to geek out on the macro and with that, note the backdrop for gold and the miners. Let’s get to an update on these two items.

SPX weekly has dropped back into the box and smashed the trend line. That’s some bearish stuff going on there. Also, VIX has smashed its way above the resistance line.

That is a weekly chart and let’s remember that we are in-week. The daily chart instructs that SPX can drop to or even through the 200 day moving average but does not lose its series of higher highs and higher lows unless it loses 2700. This week’s crack does however take SPX 3000 off the table for the near future, if there is no wonder rally back above the dotted trend line above to close the week.

Dow could be headed for its SMA 200 as well. ‘Buying opp’ bulls would probably be buying these indexes at those points. It is still an uptrend after all.

NDX has been relatively weak after breaking down, testing the breakdown with a bounce, and then getting hammered yesterday. It’s at the SMA 200 and with the volatility in play can slice through it. It would be best for the bulls for NDX to hold the June low of 69.50 because a loss of that level would break the trend. It’s at about 7002 in pre-market.

SOX has been a mess, having fallen out of bed this week. It needs to hold the 1203 and 1223 lows to avoid a big breakdown.

Gold went nowhere yesterday but as noted in this post about the miners, it ramped up against most cyclical and risk ‘on’ assets and markets. Importantly, that includes the S&P 500 (Amigo #1).

Silver is grinding away at a potential low. Both items have held below the SMA 50, and clearing that is the immediate objective, technically.

HUI held its potential bottom/bounce pattern yesterday very nicely. Same deal here, the SMA 50 is the objective. If it is only a bounce our targets are gap 1 above 150, gap 2 around 160 and then strong resistance up at around 170 (and the 200 day moving average).

Bottom Line

The above are some technical readings of the situation.

Of more importance will be whether this is the macro change gold bugs want to see. With the cyclical world under stress, let’s be open to it.

But I for one will be wary at HUI 170 resistance (if applicable) if the cyclical world proves to have been simply providing a big buying opportunity.

Let’s gauge the situation going forward. Key objectives would be to get HUI above 170 while breaking the stock market’s major up trends. Otherwise, it could still be a good contrary opportunity for a while in the gold sector and a buying opp. in the broads.