Starting this week with the daily close of cash gold that I highlighted earlier in the week. What concerned me at that time was the fact that the price was stuck right up in the top corner of an unpleasant looking up-slanting wedge pattern. I wasn’t suggesting that it couldn’t go up from there – just that it would be damned hard and would look better if it came back and did a bit of work. As we can now see that area has proved difficult to overcome with the price easing back nicely in New York trading at the close of last week.
So where to now – I would like to see it do a bit of work and then it might find a easier path.
And highlighting again the daily chart of our Gold Index (XGD). As we can see, for another week it has traded in the top of this lovely big expanding triangle. Here again, the fact that it hasn’t been able to burst through, suggests we might have to have a bit of patience again.
The next chart highlights why our gold stocks are meeting resistance up here. I have included this weekly chart of XGD a number of times. We have a huge base pattern that looks like the most fabulous big head and shoulders bottom but note the trading in this area in 2019 and 2020/21 but also not shown a similar top back in 2011 so quite a few stale holders hanging around up here. However, I still think, despite what might be giving us problems in the short term, ultimately, I believe we will see the full upside count from this pattern achieved. Yes …. Patience.
For a slightly different look at our overall stock market, this week I am highlighting MVW which is the VanEck Equal weighting. What is interesting here that it seems that the banks (you now where whey make money) are neatly offsetting the weakness in our major miners. The overall picture leaves the index almost where the year started.
I just had to include this daily chart of BHP. Look where it rallied to – back up to the first overhead resistance area. Not nice. And people wonder why I still bother to draw my own charts – well when you get this type of perfection, it makes it all worthwhile. BHP needs to show a bit more style.
The next chart is really interesting. Updating the daily chart of the S&P together with some indicators. Wow, hasn’t it developed over the week.
First of all – note the uptrend on the Index. Goes back to the low in October last year. Seems to be desperately trying to hang in there.
Then My Geniuses. (top blue line) Back up over 80% at the middle of the week. Now just 20% of their money still in their pockets.
Further down – note how my overbought/oversold indicator (blue) is finally getting up into an area that starts to suggest things are getting overbought. Not to max levels but enough to take notice.
But particularly interesting, is the Fear and Greed. It is now up into the area which shows them all getting greedy and not nearly so worried.
I had been suggesting that we probably needed all of these indicators to start to show overbought before the markets could top. We look as though that might be in the throes of this taking place. What an interesting week coming up here as we watch these indicators.
And now looking at another market on the world scene – the next chart is Shanghai together with Hong Kong on the bottom of the chart. Just look at that downtrend in Shanghai. Can it break it. Needs to or things might get a bit nasty. I think they need to look under a few more hats to see if there are any rabbits hiding there.
Interestingly, Hong Kong doesn’t look quite as weak, but I think it might meet a bit of resistance from that heavy line I have drawn on the chart.
(20min delay)