Part of my job is to tell you what the charts say and this chart says that SLV is breaking down from a trend line and its 2x inverse, ZSL, is breaking up from one. One is below its 50 day moving averages and the other, above.
With the precious metals strong in pre-market, it is helpful to take a current snapshot of the daily technical situation for perspective.
Putting aside the pre-market drop in precious metals, we’ll review the charts as they stood at yesterday’s close.
GLD is neutral, with a bull signal to be determined by MACD going green and the price remaining at or above the 50 day MA’s.
The Key ETF daily charts remain on the same signals as the last update. Precious metals are neutral, US and Euro stock markets are bullish but over bought and commodities and emerging markets are neutral but in potential breakdown mode.
We are in a typical pre-FOMC meat grinder where the precious metals are concerned. I wanted to pass along a few pictures of the current situation, beginning with the important silver-gold ratio (SGR) and HUI-Gold ratio (HGR).
GLD is dealing with the SMA 50 after breaking the trend line and triggering MACD. Neutral, pending a climb and hold above the SMA 50 and MACD 0+ (green).
GLD is MACD trigger up, on a trend line breakout and at the SMA 50. Balance of data points is a neutral signal. Bull signal would come with a couple closes above the SMA 50 and MACD rising to 0+.
A quick update on the status of the weekly view of HUI and its projected ‘W’ or ‘IHS’ bottom as noted in this week’s letter.
But first, to review the daily situation, HUI made its first close above the resistance at 230 (as noted in an update last week by a daily chart). The next important task is to take out the 50 day moving averages, which are currently 234.55 (EMA) and 241.50 (SMA).
GLD broke above the trend line and triggered MACD, which is still below zero. The bullish objective is to clear the (blue) 50 day moving averages and hold there. Still on a bear signal pending a move above the MA 50’s.
Some in-day micro management for anyone interested. On days like this we are reminded that NFTRH will not be the service that calls out bottoms for you on most occasions because it is a cyclical bear market and a cautious stance has been in effect.
With the precious metals up in pre-market and US stock futures down after political players did the predictable, it is notable that these markets seem to be going opposite the news. This goes against the current technical trends but really, anyone buying the stock market yesterday because of an impending debt deal would have been buying a classic ‘sell the news’ setup. Precious metals are ‘buying the news’, but have technical hurdles as follows.
A quick note that I will be away from the market for most, if not all of the day today. That may be for the best given noise level out there.
Nothing has changed from Sunday and Monday’s communications. I remain in scouting for a bottom mode in the precious metals and seem to be in scouting for a top (at least a temporary one) mode in the US stock market. Again, the problem with each of these scenarios is the Washington noise.
I don’t believe today’s precious metals bounce is anything because we are talking about a market that is fixating on scrambling politicians and what ever scheme they will cook up to extend the nation’s ‘Wimpy’ lifestyle… “I’ll gladly pay you on Tuesday for a Hamburger today.”
