Gold stock sentiment indicator. Friday was pivotal in that both stocks and bonds were sold off. This does not happen very often. That only really leaves the USD if you discount gold and gold stocks. Nearly all producers opened low, fell lower but closed near highs on Friday. Basically they all closed in the green. Time to consider gold stocks as catching a safe haven bid. The sentiment indicator reversed in a hurry and quite a distance therefore juniors under pressure. Indications of risk-off. . Here is my opinion of where we are and what we COULD see. If bond yields do not flatten or fall then the Fed will step up purchases as the RBA has done. The Fed could let yields go further before responding but this could see a dampening of interest when new money (bond auctions) is being raised. Stimulus in the US still needs new money. If yields stay too high then there will be pressure on banks to raise mortgage interest rates in Australia. Watch for this one. Speaks volumes. This is one sector of the Aussie economy the government would not like to see deflating because of higher interest rates. More home buyer programs? The markets could be in for a correction. A rotation out of growth and into value stocks is likely and a key indicator, which I suspect is already underway. Any significant falls could be led by the NASDAQ. The best of the growth stocks will probably see a shakeout before moving or at least holding ground. As has happened to gold producers. Volatility will probably remain high and get higher. The USD should tick higher as money is moved around. Will almost certainly move higher if bond prices continue to fall. Safe haven. The AUD is not a big enough market to be considered a haven and often falls in these situations. IF there is a market correction then we can only hope it is relatively orderly. Extremely unlikely given leverage and the amount of money now in the markets which has increased over the last 12 months. Much of this was already experienced in Feb/March last year without the bond meltdown. Not to mention the effect of Robinhood traders. . The leading indicators has crashed 24%, now down to 23%. These extreme lows are almost always followed by an up day. Sentiment has pulled right back to the 10 dma at 28%. The 10dma has only pulled back this far for this long once before and was immediately followed by the next cyclic bull leg. The producers always lead the juniors at the beginning of the bull leg so let's hope we are about to begin a bull leg. .
