Aren’t these markets cruel. Just look what our Gold Index (XGD) has done. The last time I included this chart I was interested in the fact that it appeared to have formed a lovely big expanding triangle which indicated it should move higher. It has but it has run into the resistance of the top band. The strong finish in gold in New York on Friday will hopefully bring in enough buying to break us clear.
View attachment 6411924Silver is still under performing the trend of gold. Look at the nice downtrend that silver has formed – which hopefully will be broken in the short term but what is particularly of interest here is the gold/silver ration at the bottom of the chart (scale inverted). See how far it is below the ratio just a couple of months ago. Want to see a stronger trend here. As I have mentioned on previous occasions, I usually like to see silver leading gold – not lagging.
View attachment 6411927And of course – a lot of this is dependent on the trend of the US dollar. Today I am including the point and figure chart of DXY.
NOTE WHERE IT IS SITTING…….
View attachment 6411930Last week I highlighted the long-term chart of steel which showed us such a sorry picture. I did mention at that time that the sentiment was so negative that I anticipated we could have a bounce. As we can see now on the daily, it did bounce but couldn’t even break the short-term downtrend. To say we desperately need a recovery here is probably the understatement of the year.
View attachment 6411933Interesting that there was a bit of buying in resource stocks in New York again on Friday night. To highlight this picture, I am including the price of copper – in red – and the COPX ETF in black. Note how both are in perfect downtrends closing right on the upper channel. Let’s watch to see if we can get some decent topside breaks this week.
View attachment 6411936Of course, the last chart directly links into our XMM and here again another lovely downtrend. (I am getting sick of them) I highlighted this chart last week and was hoping the fact that the indicator at the bottom which was not confirming the latest selling in the sector, could suggest a rally. Now I want to see if XMM can follow the trend set in New York.
View attachment 6411942Which of course brings us back to the S&P. Once more the chart of this index together with three indicators. Interestingly, my Geniuses still have cash. This is quite amazing considering that there were more new 52-week highs across the sector. I find it hard to believe that we could get an important top with this band of merry makers with money still in their pockets!
Moving down the page, my OB/OS indictor is midway in the scale – again not showing exuberance.
But also, the Fear and Greed indicator at the bottom has improved a bit this week but also is only back in the middle of the band. Again, it is hard to believe that we would have an important top with this lot still being uneasy. Usually, they show extreme optimism at any important highs. Of course, what we always must remember is that rules can change without anyone letting us know, so we are going to have to be on the ball.
View attachment 6411945Aluminium received quite a bit of love and attention this past week after moves by the Chinese. As we can see on the long-term chart, the price has rallied to be up against the band of overhead resistance. It does look as though it could be building a lovely big base. Let’s see how it goes if it can start climbing through that resistance.
View attachment 6411948And a quick look at another chart from the global scene – the DAX. It had three bad days a couple of weeks ago like all other markets, but just look at that climb back. Now up under the previous all-time highs and right on the upper boundary through those highs. Just amazing how this market has performed this year.
Then we are left thinking …. is a weaker US dollar good for markets outside the US? Opinions –
View attachment 6411954There are so many troubling signs around the stock markets that what we have to be careful of is when the rate cuts finally come, it might be the last hurrah.
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