“Many Christmases ago I went to buy a doll for my son. I reached for the last one they had, but so did another man. As I rained blows upon him I realized there had to be another way!”
This year markets are going another way.
We have been managing a potential Christmas Eve close-out sale in the stock market since SPX hopped the Bull Turnstile, negating topping potential and confirming bullish ascending triangles (not shown below as they appeared on daily charts) and its own major trends by breaking upward. Here is the most recent chart (from NFTRH 582) used to illustrate the situation.
Please consider this weekly chart for reference only. We had a lot of words in #582 about what I think is in play, but ultimately this public post is simply illustrating what is currently in play. And that is an upside extension (with associated sentiment readings to be updated this weekend in NFTRH 583) that would be roughly equal and opposite to the 2018 downside blow off (note: though the chart allows for higher levels, SPX has already qualified for a price and sentiment close-out, in the general spirit of the season). The blue box is the same height as the yellow shaded area. It’s more art than TA, but there you have it… some frame of reference. Continue reading "A Market Festivus"→
It has been about 2 months since the gold stock sector, as represented by the HUI index, topped out. The ensuing correction has been a whipsaw affair of ups and downs, but smoothing that volatility out we find an ongoing correction in time and price that has not been too difficult to manage.
The pattern that some would call a “complex H&S” (TA-speak for a freakish pattern with too many shoulders) held a key lower high on the recent bounce to the daily chart’s SMA 50 (blue line). The neckline has been tested (and held) twice since it was created in September and the negative RSI divergence that began last summer has been guiding Huey downward.
It’s all normal and by the chart above you can see the targets, which have been 195 (minor support) and better support at the convergence of a lot of markers, including major breakout support and a gap at 180, the rising SMA 200 (183), a 62% Fib retrace (182) and finally, the pattern’s measurement at around 172. That’s a lot of technical traffic pointing to the 170s-180s for the correction’s ultimate goal, which is to wash out the excess.
The guy using the planets of an imaginary gold sector Macrocosm with proper fundamentals that are decidedly not imaginary but rather, are necessary to call a real bull phase or even bull market. By managing a strict set of macro and sector fundamental inputs (to the sound of crickets and little else in the sector) NFTRH and its subscribers had a front row seat to the now obvious gold mining launch as first the fundamentals came in line, followed by the technicals.
The reason this needs to be highlighted is because there is a popular Elliott Wave analyst out there * (among a few others) talking about how it’s all in the wave counts (unless they are revised, as often happens with EW) or other technicals, and fundamentals don’t matter. As if the answer is all technical and sentiment based. Well, those two things are important, but please. As happened in dramatic fashion when we became super bullish in Q4 2008, the fundamentals kicked in first and gave a green light to taking technical signals more seriously along the way. Look, I am a TA too, but The Men Who Stare at Charts exclusively are pitching only half the story. Continue reading "Gold Stock Launch In The Books; What's Next"→
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. Continue reading "Big Pictures: Stocks, Gold and the Miners"→