Last week I highlighted the potential for a double top across a number of markets. The behaviour since then would tend to support this view as we can see clearly here on the Dow. But….some charts don’t look so easy to interpret. I am now wondering if perhaps we need to do a bit more work and put us all through more pain before the market completes a top. Keep in mind that the negative divergences are growing.
View attachment 6203703The NASDAQ is a case in point. The trading on Thursday their time, left a horrid key-reversal day. That means it went higher than the previous high, and then went lower than the previous low and closed near its low. These are usually very negative signals. Added to that, we see the number of 52 week high/lows has broken that rather delicate uptrend. But despite all these negatives, I am still unsure as to whether this index might need to do a bit more work.
View attachment 6203706 The XJO is almost a perfect replica of the Dow having turned down off that uptrend that I have highlighted previously. Looks worrying but again, some things are not quite as clear as this one which leaves me a little bit up in the air. Should only take a few days to form a clear view.
View attachment 6203709And then what a week we had in precious metals. This week I am highlighting again the point and figure chart of silver and what a picture it paints. Just look at the downtrend since the high but what about those two uptrends that came together at the same spot. I have a little box drawn on this chart where I was thinking it should come back into but by the close of Friday I was beginning to wonder if maybe it just needs to do work around the $30 mark. We should get a clearer view over the next few days. And remember, I take the world price of gold and silver so I will have an update for Monday’s trading even though New York is closed. Might have a clearer picture as soon as that.
View attachment 6203715Updating XGD again (our gold index) weekly semi-log. Such a beautiful chart and as I mentioned last time, it has already spent four years building this base so I hope it doesn’t take another four years to complete it or I might miss it altogether. This chart certainly makes me feel more confident that we have not seen the end of the rise in the gold price. Surely the market wouldn’t spend so much effort building such an impressive pattern and then fail to follow through. Never say never, but I think if we watch trading carefully here, we might get a better idea of the overall big picture on gold itself.
View attachment 6203718Moving on to copper – and how could I not. Just look at what we have done this week. The price of copper in red and COPX (global copper miners) in black. Will the price hold the uptrend and look how COPX came back into the support area. Again, will it hold. Early this week should give us some further hints.
View attachment 6203721Now not wanting to point fingers at BHP, but their negotiations relating to OZ minerals took place in the area I have circled on the long-term nickel chart. We all know what price nickel was when they put the mine on care and maintenance. This is why I get a bit nervous when suddenly everyone now wants a bit more copper. However, the price of nickel had been going up for quite some time before that outbreak of enthusiasm took place. Copper has only come back into favour in the past couple of months.
View attachment 6203724The next chart is the one that is causing me the most frustration at the moment – steel. Looks like a base and has broken out of a nice channel but just can’t seem to get above 3600. If it doesn’t hurry up and break topside, it risks going back to test the low.
View attachment 6203727And here is something different – ICLN – global equities in the clean energy section. Been going sideways for nearly a year which followed from an awful downtrend. But…it is looking a bit encouraging here. Could we start to think about the potential for clean energy stocks again. Just something to keep in mind.
View attachment 6203730And China. I don’t think people really are aware that this index has been in this band highlighted by my upper area of resistance since 2015. So, for nine whole years there has been no growth in this index. Short term it looks to have rallied up to that two-year downtrend and turned down.
View attachment 6203736Following on from the previous chart, this is an interesting picture considering what we have been watching on the news this week - the threats being made by planes and ships in the area – Taiwan. Big uptrend. Can it last.
View attachment 6203739As a chartist I try not to let news events affect what I am thinking, but no one could avoid being concerned about the levels of debt piling up everywhere. My particular concern on this subject is the commercial real estate market in New York. Just remember it only takes one little drip to start a waterfall elsewhere. This headline sums it up nicely.
Losses Pile Up in Top-Rated Bonds Backed by Commercial Real Estate Debt
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