A pre-market snapshot (daily charts)
Gold worked off some of its short-term overbought situation (RSI) simply by grinding up and down, post-FOMC. I have expressed concern (by the overbought technical and by CoT) that gold and especially silver could be subject to a pullback. This chart reminds me why that concern could be a case of over thinking. If an item really is breaking bullish for a long-term move it can stay overbought for a long while or work off overbought signals by grinding sideways. As also noted (NFTRH 802) the weekly and monthly charts are just plain bullish.
Silver’s spike never did take it up and out of the 25.50 to 26.00 area highs of the last few years before also turning down and working off the daily overbought. I may have over-thought myself out of my SLV position and will watch today and this week in consideration of adding it back (again, my preference is SLV and its lack of execution/country risk) over silver miners). When selling SLV, I focused on clear support at the converged and neutral trending moving averages. That is still the preferred buy area (greedily speaking), but with RSI having stair-stepped down to a higher low, I want to watch to see if the EMA 20 holds here. One of these days the little mental whipsaws (remember, NFTRH written by an all-too human) will be in the past.
GDX is also grinding off its overbought situation. I hedged a bit in the event that this short-term grind pattern is prepping for a pullback to test support around 28.40 and a fill of gap #1. But this morning GDX continues the grind (at worst) by rising again after yesterday’s bearish candle. I’ll be open to dropping the hedge if today opens strong and unlike yesterday, does not fade again. It’ll depend. Cash is a better risk manager, anyway.
But I also have my eyes on TSX-V, because a bunch of my miners (explorers, developers) reside on da ‘V’ and with the precious metals currently in anti-USD much like commodities, this guide to the speculative end of the general commodity/resources trades needs to stay intact. At yesterday’s close, it is intact. Yesterday it declined and then put in a Hammer candle, which is short-term bullish. The key is to hold the February 13 low of 536.31, which it is doing thus far.
