This is definitely the product of a man staring at a chart and wondering aloud. And if the imaginings of this weekly chart are accurate killing the bull market will not be easy. The problem is that we have a negative sentiment and price event on our hands that quants (for me they are Rob at Quant Edges and Jason at Sentimentrader) present positive intermediate-term forward data on, and if the daily chart bounce pattern (2nd chart in this post) plays out this chart imagines it could be months before the market cracks for real. Maybe right out to the end of the positive seasonal pattern in the spring.
What could that mean for gold bugs? Extended Palookaville. The problem being that while it would be easy to think I am a genius for having erected this red resistance zone a few years ago, I am anything but said genius. Indeed, even though SPX/Gold has turned down I am a lowly would-be gold bug who has concerns about the gap with the (?) above it.
So while we are working negative forward themes for stocks and positive ones for gold miners, why don’t we keep in mind that “forward” could be longer than a committed casino patron might find convenient. Maybe spring of 2019 is the kill zone for stocks and the bull zone for gold. Then again, maybe not. It’s just a ‘men who stare at charts’ installment, after all. You know how the nerds are; always trying to transfix you by making the simple sound overly complex, and making things sound more dire or important than they actually are. It’s just charts, after all.
Best to watch for internal market indicators, divergences and macro fundamentals along the way in order to keep the narrative on course.
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