Non-traders or those not interested in this type of trade please disregard!
Continuing the idea of dry running and refining NFTRH+, here is an interesting chart I came across for French Pharmaceutical company Sanofi (SNY).
Ukraine war hype, China demand drop, GOFO mysteries… these are the short term noise inputs on the gold sector.
US Treasury bond yield spreads, gold vs. commodities (i.e. the ‘real’ price of gold), gold vs. the stock market… these are some of the fundamental considerations that actually matter and they have taken a hit since January.
It is easy to say ‘I am bullish in the big picture’ (measured in years) but it is not so easy to actively manage in the smaller pictures (measured in days, weeks and months) with all of the above noise inputs and more bombarding the poor individual player.
We use shorter term charts to manage the shorter time frames. Daily charts have most recently indicated a bearish set up as bear flags formed across the precious metals complex (with the exception of silver, which never got going to begin with) last week. Weekly charts continue to indicate that an extended and oh so grinding bottom may be forming, but that includes the potential for ups and downs, also known as volatility.
There is also a lot of noise lately in the stock market. The US stock bull celebrated its 5th birthday last month. The last 2 cycles (the manic phase of the secular bull ended 2000 and the cyclical bull ended 2007) were each approximately 5 years long. Today let’s retreat to the calm of the long term monthly charts and get a snapshot of the big picture.
The S&P 500 has a measured target of around 2190 that we have had open as a possibility since the big breakout occurred in early 2013. A measured target is just that, a measurement; simple math. It is not a directive and therefore 2190 is not hype, it is just a possibility.
Was that the bounce? If it was, my longs are not going to do well and will probably stop out shortly. But in the event that the bulls are just getting themselves together and will put on an upward grind this week (as in a bear flag), a would-be bull flag setup is shown below on bear fund SPXS.
The Semiconductor index made a bearish pattern with today’s decline. If it loses the 10 year breakout line (right about at the blue 50 day MA’s), look out Mr. Market.
Yesterday HUI did exactly what we asked it to do in order to remain normal to the current plan. It dropped into the 224’s, filled the gap and has not made a lower low to the last green arrow. So it remains in a baby uptrend. I would not get too concerned about reading a rising wedge into a 30 minute chart, but it is inserted regardless to again play Devil’s Advocate.
Data came in weaker this morning with a home sales drop of 3.3% in February. The ‘all one market’ market is cheering to banish the evil spirits released by Janet Yellen last week. Those would be the rising short term interest rate spirits and they are key to our fundamentals.
In January of 2013 NFTRH used the Semiconductor sector as a 'canary in a coal mine' to a potential coming phase of US manufacturing strength and an economic bounce. This…
If the monthly chart of the COMP is to be believed, 4% is the ‘reward’ side of the risk/reward equation in tech stocks. COMP could gobble that up in 3 days.
Bulls have surely won. The market has gone much higher than I for one thought it would when I got bullish on its prospects in late 2012. Much higher; but then I am not a bubble chasing momo. I am a conservative player with a negative view of the mechanics that have produced this bubble. Still, there is no use denying its reality.
HUI Daily Technicals
HUI got above the 50 day averages and changed the daily trend by gapping up January. It then made a consolidation handle, which found support at the EMA 50 in early February. It then became gappy as aggressive buyers chased it up to its over bought state (as of yesterday).
The ‘bounce’ has been more powerful than I thought it might, bringing the prospect of the next up phase – indeed a potential melt up phase – into the picture. But one leader has been negatively diverging the rally of the last week…
How I [they] Learned to Stop Worrying and Love the Bomb [Market] paraphrasing Stanley Kubrick’s great cold war/nuclear paranoia film Dr. Strangelove (1964).
The USA thrived during a 20th century rife with war, famine and depression. This was a wealthy country however, founded on principles of self-reliance and valuing thrift, saving and honest work for an honest return. Add in unparalleled productivity and economically at least, the positives more than outpaced the negatives.
The following is an excerpt from NFTRH 270, dated 12.22.13:
Now What? This is What
From NFTRH 269’s opening segment ‘Market Correction on Cue, Now What?’:
“The question now is whether or not this is the start of a larger topping scenario and the answer to that question is for now at least, no, not by evidence showing up in our indicators like junk bond (risk on) speculation and sentiment, which was dialed back from heartily over bullish to neutral by the correction of the last couple of weeks.”
Party goers are gathered around the punch bowl as expected after the FOMC’s token move on QE. Jeff Lacker is jawboning additional tapers in $10b chunks and all seems right, except… the ‘continuum’ (AKA the 100 month EMA on the 30 year bond yield chart).
Let me ask you Beuller, what happened at the red arrow in 2000? What happened after the red arrow in 2007? What happened after the plunge in 2008? What happened after the red arrow in 2011? What happened after the most recent bottom in 2012? The answers are 1) the end of a secular bull market in stocks, 2) the end of the last cyclical bull market in stocks, 3) the birth of the current cyclical bull market in stocks, 4) the end of the big cyclical commodities rally and 5) the launch of this most powerful leg of the cyclical stock bull market.