What a difference a week makes. Last week I was frustrated with the fact that the XJO had been down for seven weeks in a row – albeit rather small ones – and just five trading days later, I am concerned we have moved up a bit fast! Still my idea of a March low is looking good but as usual we can never give guarantees in this game.
As I have mentioned before, I am thinking we might head higher till mid-year. However, there is a pattern that could build here on the XJO that would be decidedly long term bearish. If we just move up into the range between 7300 and 7400 and then roll over, it could turn out to be a rather unpleasant right shoulder of a very big head and shoulders top. So we have got through one sticky area but there is always another one to be concerned about.
View attachment 5179294The chart of XMM – our mining index – is typical of the confusion the market keeps throwing at us – well me anyway! Last week I included the daily chart and at that time I was really desperate to see it break its short-term downtrend. Break it? Now I am contemplating whether the weekly chart can break topside of the sideways move of the past two and a half years…. If it can go out the top and hold it, then we have to start thinking in terms of a further major leg up in the miners. This is likely to prove a very important chart.
View attachment 5179297Once again, my scruffy old monthly semi-log chart of WBC. Interesting that I mentioned before all the recent banking problems, that this chart was suggesting to probably best to avoid banks for a while. We have picked up the uptrend. I think I will wait to see if our banks can bring back a bit of confidence to the sector.
View attachment 5179300And now the weekly chart of the Dow – again semi-log scale. Just look at that amazing uptrend I have arrowed. And one might wonder why I sometimes think there must be a silent hand at work in the market. The perfection just blows me away. Like to see it get above the consolidation area of the past few months. Might take a bit more time but I do think the picture here is encouraging.
View attachment 5179303And the good old NASDAQ. Last week I was extolling the beauty of the long-term downtrend – this week we are already up to the overhead resistance zone! May be a bit of patience required here but if we ultimately can get clearly above this resistance, and the past year of trading turns out to be a big base, it does give much higher targets. So again, it seems that every chart is tantalizingly close to giving us further hints on the big picture.
View attachment 5179306I have complained about silver’s performance of late but it has done a quick catch up although the uptrend is too steep at the moment. But the really interesting part of this chart is the gold/silver ratio at the bottom of the chart (scale inverted). Note the break of two important downtrends. A lot of resistance in silver up here so I would like to see it do a bit of work, but that GSR really excites me for the longer-term picture.
View attachment 5179309A different look at commodities. I normally use the B.Com index as each commodity is equally weighted. Today I am including the old CRB index which has been around for what seems like forever. Unfortunately, this index is weighted towards the energy sector which I think tends to distort the overall picture. However, it is interesting to see that the trend has been down since early last year but at the moment it does look as though it might be trying to break this downtrend. If it can, it would obviously be an encouraging sign for the energy market in particular but other commodities as well.
View attachment 5179312And then looking at the very long-term picture of crude – this is the monthly semi-log chart. If the previous chart of the CRB is hinting at a break of the downtrend, it would mean that the downtrend here on crude itself would likely be broken as well. Time to start keeping an eye on this sector as once it does confirm a reversal of trend, opportunities will be falling over each other.
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