Outstanding Jobs Number Catapults Futures

Gold Futures

Gold futures in the August contract settled last Friday in New York at 1,780 while currently trading at 1,788 an ounce in a holiday-shortened trading week continuing it's bullish momentum as prices did crack the critical 1,800 level earlier in the week.

Currently, I am not involved as my only precious metal recommendation is a bullish silver trade. However, I do have a bullish bias as I do think gold prices will crack the 2,000 level, and if you are long a futures contract, I would place the stop-loss at the 10-day low standing at 1,753 as an exit strategy as the chart structure is outstanding at the current time. Gold prices are trading above their 20 and 100-day moving average as the trend remains to the upside as prices still finished about $9 higher today even though the jobs number came out, adding 4.8 million jobs, which is remarkable in my opinion as that is generally a fundamental bearish factor. Still, there is a lot of demand for gold at present. The Federal Reserve continues to promise that they will add more liquidity to the system with another possible 1 or 2 trillion-dollar stimulus package on the way that should continue to push gold higher, so stay long as I see no reason to be short.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

S&P 500 Futures

The S&P 500 in the September contract is trading higher for the 4th consecutive session reacting very positively to the unemployment number, which was released today, stating that the United States added 4.8 million jobs sending prices up 41 points currently trading at 3,144 or 1.33% higher. If you've been following my previous blogs, you understand that I am not involved. Still, I do have a bullish bias as I think the equity markets will continue to move higher as I see no reason to be short as the Nasdaq-100, which has hit another all-time high in today's trade. Continue reading "Outstanding Jobs Number Catapults Futures"

Gold Sector Correction Is Maturing

Gold Stock Seasonal Average

The HUI Gold Bugs index has over the last 2 decades (encompassing both bull and bear markets) tended to bottom in July per stockcharts.com's data for the index. A seasonal average is not a directive, but it is a (+/-) guide to be factored. Last year gold stocks bottomed in May as we caught what would be a violent upswing. This year I expect the low to be in June or July.

Why Gold?

As the stock market’s broad relief rally lumbers on, drawing the ire of bears that think it should be otherwise, a chorus of dissenting voices is blaming legions of shut-in Millennials and their Robinhood trading accounts for the excess. Maybe that plays a small part.

But here I’ll repeat that the Fed is balls-out printing money (really funny munny), manipulating Treasury and Corporate bonds and stating that it will have virtually no limits in this MMT (I would turn around MMT to call it what it actually is, TMM or Total Market Manipulation). They can give it a fancy name like Modern Monetary Theory but by any other name, it is chicanery and a scam that society will suffer the fallout from someday.

They are cheapening the munny units in order to give the appearance of rising asset (especially stock asset) units. Say it again… “they are cheapening the munny units in order to give the appearance of rising asset units.”

Hence, gold. The shiny rock, the bullion, the anchor to monetary sanity. In this surreal monetary realm, it is something real.

The goal of investing in or trading the gold mining sector is to capitalize on the desperate actions of monetary and fiscal policymakers vs. gold’s stability. Last week we covered a lot of details: Gold Stock Correction and Upcoming Opportunity. No need to repeat the details. People who know how to play this sector have been patiently managing the correction (whether that means selling into it, buying during it, being psychologically prepared for it, etc.) and planning for its end.

We keep a long list of quality miners, explorers, and royalty charts updated every week in NFTRH for this very outcome; an end to the correction and the next phase of gold’s bull market, which it is consolidating now, per this daily futures chart. If the negative RSI divergence does not resolve into a sharp drop soon it is going to then be big-time fuel for what could be a hysterical run-up to the 1940 target and possibly beyond.

Gold had become over-loved by financial refugees in March. They are now buying stocks again.* That is perfect because they should not be aboard the next phase. Their role will again be too knee-jerk and chase later on. Despite the consolidation since March, the daily chart (via TradingView) shows a completely intact situation at the up-trending 50-day average.

gold

Gold/SPX Ratio

I’ll leave you with one final chart. There has been a reason gold has underperformed the stock market since the terror of early spring. That reason is because cyclical asset markets are and have been on a massive sentiment relief rally and sentiment will do what it will do in the short-term. Just remember that simple fact when you see the inevitable rationale like this that certain interests will try to feed you: Here Come the Golden Ghost Stories.

Gold/SPX has done a great job of taking out the excess while remaining intact. 5-year chart…

gold spx ratio

The Not So Great Reset

Lunatics far and wide talk about something called “The Great Reset” but that too is tin foil, whether aspects of it are true or not. It does not help your market management to have that crap in your head. Instead, let’s boil down the picture to the gold sector and realize that as the terror-stricken sentiment of March and April is being reset, so to is the over-enthusiastic sentiment in the gold sector.

The next bull phase should be arriving before long.

* I have been selectively long the stock market since March as well, but very aware of the gathering risks, which I personally and the NFTRH service manage accordingly.

Check back to see my next post!

Best,
Gary Tanashian
nftrh.com

Subscribe to NFTRH Premium (monthly at USD $35.00 or a 14% discounted yearly at USD $365.00) for an in-depth weekly market reportinterim market updates and NFTRH+ chart and trade setup ideas, all archived/posted at the site and delivered to your inbox.

You can also keep up to date with plenty of actionable public content at NFTRH.com by using the email form on the right sidebar and get even more by joining our free eLetter. Or follow via Twitter @BiiwiiNFTRHStockTwits or RSS. Also, check out the quality market writers at nftrh.com.

Silver Futures Looking To Test Highs

Silver Futures

Silver futures in the July contract settled last Friday in New York at 15.77 while currently trading at a 16.92 an ounce ending the week on a positive note up over $0.75 as prices have now hit a 2 month high.

I've recommended a bullish position from around the 16.10 level, and if you took that trade, continue to place the stop loss under the 10-day low, which stands at 14.76 as an exit strategy. The chart structure will improve in next week's trade as the monetary risk will also be reduced.

Silver prices are now trading above their 20 and 100-day moving average for the 1st time in 3 months. I do believe a true breakout has occurred as it would not surprise me if prices test the contract high of 19.07, which was hit on February 24th in the coming weeks ahead.

The U.S. equity market is starting to look a little vulnerable as we had one of the worst weeks in quite some time. Money flows are entering the precious metals which look very strong, and I still think silver has room to run. Continue to play this to the upside, and if you are not involved, wait for some price retracement before entering.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Mexican Peso Futures

The Mexican Peso in the June contract settled last Friday at 4189 while currently trading at 4161 down slightly for the week still stuck in a very tight 8-week consolidation pattern looking to break out to the upside in my opinion. I will be recommending a bullish position if prices close above the 42.21 level while then placing the stop loss at 3918 as the risk would be around $1,600 per contract plus slippage and commission. Continue reading "Silver Futures Looking To Test Highs"

Dismal Jobs Number Doesn't Stop Futures

S&P 500 Futures

The S&P 500 futures in the June contract settled last Friday in Chicago at 2821 while currently trading at 2904 ending the week on a positive note trading higher for the 2nd consecutive session. The bullish trend continues even though the unemployment rate is near 15%, which is the highest since the Great Depression.

I am currently not involved, but if you have been following my previous blogs, you understand that I do have a bullish bias. I think higher prices are ahead as the U.S. economy is finally starting to open up as optimism has come about, which is a terrific thing to see.

The Nasdaq-100 has now turned positive in 2020 as the technology sector is doing exceptionally well, and I still see more positive returns going forward. The S&P 500 is trading above its 20-day but still below its 100-day moving average, which is just an eyelash away at 2994. That could be broken in the next couple of weeks as the earnings season is upon us.

Volatility at the current time remains very high, and I don't think that situation is going to end anytime soon. We will now have to wait and see what the statistics are about individuals spending money at retail stores and restaurants.

TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Mexican Peso Futures

The Mexican Peso settled last week at 4023 while currently trading 4190 up over 150 points for the trading week looking to break out of its tight 7-week consolidation. If you have been following my previous blogs, you understand that I am looking at a possible bullish position to the upside.

I will be recommending a bullish position if prices Continue reading "Dismal Jobs Number Doesn't Stop Futures"

S&P 500 Futures Show A Flat Market

S&P 500 Futures

The S&P 500 futures in the June contract settled last Friday in Chicago at 2829 while currently trading at 2822, basically unchanged for the trading week. However, that is not telling you the whole story as the volatility remains exceptionally high as the Dow Jones is down over 600 points ending the week at a very sour note.

I am not involved as the volatility, and the risk/reward is not in your favor to take a bullish or bearish position. However, I do think the stock market will head higher due to all the stimulus programs. I still see light at the end of the tunnel because many states have started to open up their economies, which is a great thing to see, in my opinion. However, if you are long a futures contract, I would place the stop loss under the 10-day low standing at 2717 as an exit strategy.

There is so much uncertainty at the current time. Until the Coronavirus situation is figured out, you're going to continue to see this market flip flop daily. I am an optimist, and I think that the United States economy will come back strong in the coming weeks. I would take advantage of price weakness to enter into a bullish position. I think many individual stocks are incredibly cheap and should be looked into substantially.

TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Mexican Peso Futures

The Mexican Peso in the June contract settled last Friday at 3959 while currently trading at 4035 up about 75 points for the trading week still stuck in a 6-week tight consolidation as prices look to have bottomed out in my opinion as prices have absolutely collapsed over the last couple of months due to the Coronavirus situation. Continue reading "S&P 500 Futures Show A Flat Market"