It appears another FOMC was used as a reason to bull the markets (on hopes about a softening Fed) and then drop the markets (on dashed hopes). Gotta love those machines; programmed for max noise and mayhem.
SPX appears on track for our original and longest standing target, the 3200 (+/-) area as the futures (ES) are down another 1% this morning. If that is the case, I’d love to be able to marry 3200 SPX with the upcoming election seasonal in order to develop a bullish view. One last hit. If that can happen I see pretty decent odds I’d get bullish in the coming weeks/months.
Meanwhile, commodities are doing the predictable in the hawkish Fed’s wake as they continue to pull back as well. I’d like to see the “last inflated man standing”, Energy, join the other bearish stuff. It feels like a key to finishing the bear process.
From yesterday’s update on gold and silver:
…gold does not begin to undo that until it takes out 1675 and 1690. Even then, it would only be an initial move.
And so, it has failed 1675. The next target is the mid-low 1500s with an outlier potential to test the entire bull cycle from 2019 in the 1300s. That would probably be a flash event, full of fear, angst and ultimately, glory, if it happens. It appears bleak and hopeless now, but this is going to resolve into a significant opportunity out ahead. Don’t fight it. Be on the right side of it and be a part of it when the time is right (if you, like me, are a gold bug at heart).
Silver is wallowing in its messy pattern above some important support levels in the 17 to 18.25 range. Those are longer-term supports not shown on this daily chart. In ticking below the SMA 50 it is vulnerable to test its lows, at least.
Where I’d think about the election seasonal with stocks, I’d think about the precious metals’ discrete sector seasonals here. Imagine if the sector is dive bombing into a December low? I’d widen that window to November-January (Q4-Q1).
Meanwhile, thank you Federal Reserve for another .75% and for the future opportunities you are providing to speculate in asset markets while paying us that increasing income. You’re a helluva bunch of great guys and girls.
I’ll continue to poke at a few things here and there as has been the case, but the main goal now is to marry downside projections with upcoming seasonal and sentiment events. And in the case of gold mining, macro fundamentals that resume improving.
