What is different between now and last summer? Well, on the headline driven stock market, not much. Therefore, until there is technical damage I am not going to let media headlines change my view. Indeed, it is possible that this week’s negativity could actually fuel the scenario we have in play, which is a potential stock blow off scenario. Remember, the market fuels itself in the short-term by resetting sentiment.
VIX has spiked above resistance and its SMA 50 and 200. Fine, but this picture also fits with what I wrote above.
Far be it from me to be a punch drunk bull, but my job as a TA is to illustrate what I see and what I see, per this daily chart of SPX from NFTRH 579, is an overbought and bull trending market taking a news-driven pullback, possibly as far as where the SMA 50 meets lateral support at 3020 to 3030. We noted in #579 that SPX was greatly extended above its SMA 50 (ref. the vertical green shaded bars).
As for the gold sector, as noted in the Trade Log I got rid of the hedging and am letting the miners and royalties (WPM & MAG added this week) balance broad stock positions. If it ain’t broke – and it ain’t – don’t fix it I tell myself. For now balance is working well per this morning’s public post.
If real technical damage comes about in the stock market we will note it. The picture above, however, is one of unhealthy froth getting taken out of the market at this time. Also, I hate to be a drag, but there is still the problematic gold and silver CoT to deal with. So for now, balance is what I continue to seek and maintain.