I know I use the word “perfection” quite a bit but today it is going to be even more so. Although I have been drawing my charts for so many years, I still just look in wonder so many times at the way markets behave.
Starting with silver. Two weeks ago, I included the daily chart of silver just as it had pulled back to the old support line and asked at that time if you had ever seen anything more perfect. Today we see that it bounced magnificently from that point, stopped to say hello briefly to the recent high and then just sailed on through.
On the lower level of the chart, I have the gold/silver ratio (scale inverted). And just look at what that has finally done. Broke out of the downtrend. I have been so frustrated with that line as I could not believe that gold could move so much without silver. Hadn’t happened before in the time I have been watching markets. Now we have done a bit of a catch-up in just a matter of days.
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Rather than showing a chart of gold itself this week, I am including the chart of NUGT (two times bullish index). Look at the lovely triangle it formed and has now broken through its recent high – note the apex of the triangle. (One of the good things about triangle patterns, is that you can often get an idea of timing from where the apex of the triangle lands).
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Moving on to the New York stock market, today I am coming back to the Dow. Look at the blessed uptrend here with the index continuing to creep up this line. Thou shalt not mention the phrase POTENTIAL DOUBLE TOP. Nor shall we mention “round number fever”!
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NASDAQ Comp went through its previous high and like all the other indices is still trading in the uptrend formed since the recent low. The volume in this sector during the past week has been huge. Usually, I look to expect around four to five billion a day. This week it got as high as eleven billion on Thursday. The volume was still high on Friday at near ten billion but on that occasion, there was more money in falling stocks than rising. Someone was getting a bit tired. The new 52-week highs on the lower part of the chart is rising but slowly. That is still concerning.
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And here we are with more perfection. US ten-year bonds. Has pulled back exactly into the support band. This slight easing in rates has changed sentiment very sharply but I fear they are all going to be disappointed. I think the best we can hope for here is that this chart continues to trade in a wide band from about 4.20 to 4.60. Should get a clearer idea about this market over the next few days.
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And copper. All those months earlier when I was so frustrated with the copper market. I felt it had the potential, but I just couldn’t get it moving. However, once it went, there appears to be no stopping it. COPX on the lower level in black and the closing price of copper itself in red. I keep thinking that it is getting a bit overdone on the upside but there doesn’t seem to be any stopping it at the moment. Just keep in mind though when everyone wanted nickel.
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More perfection – USO. Included this chart last week and at the time wondered if it could pull back to this support band and form a reversal. So far it looks encouraging, but we need it to break the downtrend. But something interesting – just look at the similarity of this chart of oil and the US Bonds two charts back. Who is leading who???
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B.Com. Finally, finally I look to have got the nice turnaround in the red line on this chart that I was looking for. It is the ratio of B.Com to the S&P. It has been building a nice pattern as it goes but I really wanted to see commodities in general outperforming the main stock index. If we are going to get a boom in commodities this is what we need to see.
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And back home – again the daily of the XJO. Once more it has turned down from the rising uptrend. And as suggested before “thou shalt not mention the phrase potential double top”.
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And finally, something a bit different. The weekly close of the Jakarta Stock Exchange. I thought it looked as though it was trying to break topside. So many of the Asian markets have had a run – could this one finally join the party.
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(20min delay)