Gold calmly continues cobbling its Handle; Miners lay in wait.
You see, there is all this noise out there. It comes mostly from inflationists touting gold in the same breath as copper, as oil, and as commodities of all flavors (and aside from gold and, to a degree, silver, those flavors are cyclical).
But you also see, gold is counter-cyclical in its best suit. You see on this monthly chart that gold has been forming its Handle to the bullish Cup ever since the inflation trades came to the fore in the summer of 2020. Therefore, you see that those touting gold and inflation together have been wrong for over a year now (and counting).
For those dealing in reality instead of dogma, gold is a candidate to break the Handle at any time. Then it would be off to the target at 3000+ over the course of a year or more. But reality holds another option as well, and that is to finish the Handle making lower.
So why not tune out the perma-pompoms in real-time, realize that the thing is bullish, but the trigger is either coming sooner or later? We are doing that more focused work in NFTRH and associated updates every week and will be on the spot when the proper signals engage.
All three of the major averages finished the week higher, marking three straight weeks of gains, with the DOW being the only one to post a daily gain on Friday, hitting a record close. The DOW was able to post a weekly gain of +1.08%, while the S&P 500 gained +1.64% and the NASDAQ gained +1.29%, triggering a new green weekly Trade Triangle, indicating it's now in a strong uptrend.
The DOW climbed 74 points or +0.21%, hitting a record close of 35,677.02, its first since August 16. The S&P 500 fell -0.11% to close at 4,544.90 a day after closing at a record, and the NASDAQ shed -0.82% to the week at 15,090.20.
On a monthly level, the S&P and DOW are up about +5%, while the NASDAQ is up +4%.
This week's other big news is Bitcoin and, more specifically, the forest Bitcoin-related ETF that started trading this week.
Bitcoin rose to an all-time high of $67,016.50 as the ProShares Bitcoin Strategy ETF (BITO), the first bitcoin-related exchange-traded fund to trade in the U.S., made its debut on Tuesday.
BITO ended the trading day up 4.65% at near $41.80 per share. As of 4:02 p.m. ET, shortly after the close of U.S. stock markets on Monday, the ETFs trading volume had reached 23.9 million shares, worth more than $1 billion based on the closing price, ranking the investment vehicle as one of the top ETF launches in history.
Two main factors are driving the rally in the US stock markets recently; retail traders buying the dip, and Q3:2021 earnings data is starting to shake away the concerns that resulted in the recent market rotation. Combine these activities with the start of the Christmas Rally phase (which usually starts sometime after mid/late-October and carries through into early January), and we have the making of a moderately strong potential price rally in the US major indexes over the next 60+ days.
The $4550 Level Is Critical Resistance For The S&P 500
I’m highlighting this ES Daily and Weekly chart pattern, below, to share with you how important it is to see the ES break above the $4550 level – the past high price peak. If the markets are going to start a new rally headed into the 2021 Christmas season, then we need to see the ES continue to rally and break above the $4550 level. It is critically important that price breach the $4550 level and attempt a strong move higher if this bullish momentum persists.
The ES has already broken above three previous Stand-out Highs, drawn in MAGENTA. This shows the strength of a bullish price advance and building bullish price momentum. Yet, the final price high, near $4550, is critically important from a technical standpoint. Continue reading "$4550 Is Critical Resistance For The S&P 500"→
The recent internal allegation against Facebook (FB) is not the company’s first public relations debacle, nor will it be the last. Facebook has a long history of public relations fiascos with Cambridge Analytica, widespread advertising boycott, various data breaches, and the most recent issues exposing internal memos that allege the company put profits before safety on its platforms. The stock has been battered and bruised, falling from $384 to $325 after these bombshell allegations and testimony on capital hill. The stock is now down 15% from its 52-week high heading into earnings. This double-digit decline places Facebook in inexpensive valuation territory relative to its technology peers, one of the cheapest high-growth stocks. Let’s not be remiss here and acknowledge the fact that these public relations issues can linger for long periods, and the regulatory implications may be significant. However, Facebook’s valuation is very appealing at this juncture.
Social Media Goliath
Facebook continues to demonstrate its ever-expanding and massive moat in the social media space. Facebook’s core social media platform, in combination with its other properties such as Instagram and WhatsApp, continues to grow while expanding margins and unlocking revenue verticals. Despite being faced with several public relations challenges over the past couple of years (i.e., Cambridge Analytica, coordinated boycotts, government inquiries into privacy, jumbled earnings calls, anti-competitive testimonies, and the recent internal release of sensitive information suggesting profits supersede safety), Facebook has triumphed to all-times after each event. Facebook had to contend with scaled back advertising spending amid the COVID-19 pandemic in conjunction with the public relations issues. Facebook continues to grow across all business segments, with its user base continuing to expand slowly. Facebook’s moat is undeniable, and any meaningful sell-off like the recent public relations-induced weakness could provide an entry point for the long-term investor. The stock is off 15% from its all-time highs, and the stock is inexpensive relative to its technology cohort. Continue reading "Facebook - Another PR Disaster"→