The market had been in a consolidation/mini correction as we have been noting.
Gold is getting clobbered as it should. Let’s please keep it real, because a lot of gold bugs are not going to. The case for gold, silver and commodities rests on an inflationary phase, which strong jobs and wages would indicate out ahead. But for now, the hit to the precious metals is logical.
Yesterday’s market decline was a little more than the recent gentle downward slip and we have been noting markets at short-term risk, sentiment-wise. So I think it is a good time to review a few pictures of the progress with respect to important support that would act as a buying opportunity for an extended rally or a failure point that would call the July bounce a shorter-term throw over and suck-in.
This update on the Biotech iShares works as both an NFTRH+ update and a regular update.
For the purposes of our regular updating, a breakout here would indicate that speculative bullish money is spreading out to Biotech, which helps the rally’s internals and speculative inputs.
To little surprise FOMC rolled over again, uttering a few words about inflation being below target and riding off into the sunset until September 21. Now there is a vacuum, policy wise, in which the market can operate. I am sure that if/as the economy continues to firm or inflation signals start to manifest the usual jawbones will hit the microphone circuit, admonishing us that they stand guard, but the market seems to be marginalizing these policy making clowns where even just a year ago it was still entranced by them.
A simple update to gauge the progress of the miners as they work through the consolidation/correction.
GDX and GDXJ did indeed break down from the bear flags we noted during the trading day on Friday.
Using the GDX and GDXJ daily charts, I thought I’d show some previous examples of bull flags so that now we can note potential bear flags. This is of course all speculation because a pattern isn’t activated until it resolves, but for reference here is an update from June 28 in which we noted several potential bull flags, which went on to resolve as expected.
The Semiconductor Equipment book-to-bill ratio for June came out last night and it remains solid. While bookings eased a bit they remained elevated and billings were the highest since 2011. So the question of whether this earnings season should be solid for Semi Equipment companies is answered; it should be because the April-June quarter was significantly better than Q1.
Yet another + update that is really not so much a trade, but a macro idea. Hence, sent to the entire list.
Since the acute bond hysteria a couple weeks ago US Treasury bonds have been easing (interest rates bouncing). That has brought an opportunity for investors, portfolio balancers (that is me in this case) and traders to enter, or in the case of NFTRH+, re-enter TIP (TIP and TLT were highlighted several months ago as a bullish destination).
Another ‘+’ update serving as a trade idea for traders and a global macro view for all subscribers. I like the idea of backing out Japan (using the AAXJ iShares) because I am not at all sure the BoJ is going to be able to subjugate the Yen in service to pumping its stock market, which still looks bearish to me. The rest of Asia however, looks constructive, much like the Emerging Markets (EEM) as reviewed last week.
While we have been on a bullish path, and momentum, breadth and ‘thrust’ imply more upside ahead I want to let you know how I, the same faulty market participant I have always been*, am proceeding.
Heading into this bullish phase (including in precious metals) my tack has been to take profits when presented and then try to be patient in reestablishing positions. After the post-Brexit euphoria ramp (or whatever this has been) I am making like ‘Old Turkey’ (from Reminiscences of a Stock Operator), and sitting tight in some areas and making like a zealous profit taker in others.
This ‘+’ update is sent to the entire subscriber base as it is a macro related subject that is reviewed each week in NFTRH. FYI, another + update (on DBA) was posted (and emailed to opted in subscribers) earlier this morning.
We have been noting the potential Inverted Head & Shoulders on $MSEMF for many weeks now in NFTRH. Using the EEM iShares, let’s dial it in.
As you may know I bought DBA back again when it pulled back to the 50 day moving averages. Then it dropped some more and I added more. I hold it for portfolio mix reasons, not as a trade. But will respect the ‘stop loss’ parameter below.
Dalradian Resources (DNA.TO/DRLDF) is a stock that had been previously recommended by Mark at IKN, but which fell out of favor after a bad financing deal last year. I believe Mark recommended profit taking and moved on. This is actually irksome to me as well and so I do not have the warm and fuzzies here. Just trying to find laggards with good upside potential for patient holders.
I believe that one of these is lying. Either the current move in the Silver-Gold ratio (which we noted during the trading day on Wed.) is false (and with this morning’s pre-market activity, it is being propelled higher) or the US dollar is conspicuous in its post-Brexit strength and due to drop.