In light of the dynamics in play in the interest rate market, one might want to watch a sector that favors rising interest rates (the Banks, given ZIRP at the Fed’s discount window) vs. rising yields out along the curve. Even though the curve is dropping, if we assume that banks are funded near 0% their lending out across the curve would have a profit motive.
We began the week with an update that noted the week’s economic calendar and in particular, the ISM (which came in at a still-strong 58.7% PMI) and today’s November Employment report (+321,000). Some economy watchers had expected a catch up move in November after a weaker than expected October and that is exactly what we got.
A snapshot of current daily technicals…
GLD dropped below and shot back above support. Key objective: Get above 120 and make a higher high to October.
So the Swiss gold vote caused a sizable ruckus in gold and silver overnight. This morning there is a nearly as sizable recovery in the metals.
The Swiss vote is an important hype component to get behind us and a positive reversal today would be notable, given the already over bearish sentiment profile (cue Citi’s Willem Buiter with a hysterical rant against gold leading in to the Swiss vote).
We have a developing potential for a stock market upside blow off on the table for reasons explained previously. With this update I want to present the indicators that argue to the contrary and ask us to manage risk. I cannot predict which way the chips will fall (no pun intended) but I can continue to put up indicators for guidance.
Per the simple measurement of this chart and others like it we have used, we find WTI crude oil at target this morning.
Let’s remember that targets are not stop signs, they are objectives based on pattern measurements.
Returning to our short-term management charts (60 minute charts, only for those managing the short-term) here are the updated views of GDX and GDXJ. Both items have stuck to the…
A snapshot of current daily technicals…
GLD is at the first resistance level that began at the equivalent of 1180 for gold (currently 1196). This resistance area was the long-term breakdown platform. It is very important to maintaining the bear or giving the bull some breathing room.
Folks, the market is over loved, unhealthy and... still bullish. As long as that is the case we must accept it. When the technicals turn, so will we. In that…
Just a quick visual to update the 60 min. ‘bounce’ charts of GDX and GDXJ from last week.
Below is not a comment on whether or not the sector has bottomed (I suspect that even if a bottom is in the lows will at least be tested in the coming weeks) but just a snapshot update per the original ‘bounce’ premise of these 60 minute charts.
Junk bond fund HYG is breaking below the 50 and 200 day moving averages. HYG in relation to long-term Treasury bonds never did break above the moving averages and you…
Folks, no one indicator works as a stand-alone. In trying to gauge what is in store for markets we have got to go with probabilities and to build a case…
A snapshot of current technical status…
GLD made a bearish breakdown below the equiv. of gold 1180. To even think about repairing the technicals, GLD would have to get above 115 at a minimum (gold above 1180).
No folks, I am not a day trader! :-)
But that does not preclude me from dialing in to short-term views, and a short-term view I found interesting was in GDX and GDXJ. When seeing the predictable pullback today my first thought was ‘typical… gold stocks can’t even sustain beyond a day or two’. My second thought was ‘let me look at some charts’ and so…