Hugely important week coming up for gold. We should be close to getting a clearer idea of the next phase of the gold market. I think the daily close chart shows the picture the clearest – has this sideways move been a big A B C correction or has it been building a H&S top?
View attachment 6299094
Looking at the gold market from a slightly different angle, the next chart is NUGT (two times bullish). Here again we unfortunately get the same sort of picture – so you see what I mean about an important week for gold.
View attachment 6299097
And now from another slightly different angle – PSLV the Sprott Silver ETF – weekly semi-log scale. Here we see it is back up to the range of the top in 2021. Can it break through. I think we might get an answer here first for this whole sector.
View attachment 6299100
Of course, the US dollar is tied into the previous charts. As we see from the daily chart, it broke downside from the little up-slanting wedge I mentioned last week and has again picked up the uptrend which corresponds to the lower level of the heavy band of support/resistance that has played a major role in the dollar market for the past two years. Is it going to be able to break free from these bands?
View attachment 6299103
Stocks in New York have liked the slightly weaker dollar this week. The next chart we are looking at is the daily chart of the S&P which closed at a new all-time high on Friday. The really important point here is my Geniuses – the upper blue line. They are finally at 103% invested. This means that not only have they spent all their cash, but they are also slightly leveraged long. Doesn’t mean that they can’t be even more leveraged but is definitely something to keep in mind. Looking back at the history of the Geniuses, at the top in April, it got to just over 100 (twice before the market rolled over) but as we can see here, it corresponded fairly nicely with an important correction. It got to 100 in August last year, but you have to go back quite a bit for the previous occurrence.
The other indicators on the page are little changed from last week – the overbought/oversold is still overbought and the Fear and Greed at the bottom in red is still sitting around the mid-level. As I mentioned last week, normally the OB/OS indicator and the Fear and Greed track each other fairly closely so it is unusual for them to be so separated.
View attachment 6299106
A different look at the NASDAQ this week – the Q’s. At the top is the normal weighting while the lower chart is QQEW which is an equally weighted index. Note the disparity between these two trends. This highlights very clearly the fact that a few stocks are continuing to propel the market higher.
View attachment 6299109
Must check the US bond rate. Fluctuated quite a bit this week and is now sitting back just below that major support/resistance band. Seems that one week this chart looks like it wants to go up and the next it looks like it wants to go down. I think we will let it decide as I am sure we aren’t far off getting a clearer picture. Our rates are just running along with it.
View attachment 6299115
I mentioned a couple of weeks ago that the Chinese needed to get their cheque book out and quick as their market was looking like it was sitting on quicksand again. It has now had SEVEN consecutive down weeks. That is a bit extreme, but the downtrend here looks to be so well entrenched that they will need to do something pretty major to reverse it. And as a reminder – this index is where it was in 2015.
View attachment 6299118
And back home. Looking at the XJO and taking a slightly different view this week - what a fabulous triangle. Do love triangles. The perfection is just amazing. I know I keep saying it but an important week coming up….
View attachment 6299121
And finally, my favourite little Australian Index - XSR. Seven seems to be the number this week – XSR has had seven consecutive up-days. Only small. Don’t like so many small up days as they tend to mean a sharper down can follow. At the same time, it has got nicely up close to the first overhead resistance band. I know I keep saying how important everything is, but it is easy to see why the next week is going to be crucial for this end of the market as well.
View attachment 6299124
(20min delay)