Wall Street was mainly weaker overnight as the 20,000 party/celebration seemed to be slipping away again. Of the nine sectors that make up their market, the weakest was Finance (XLF). This is precisely what the bulls do not want to see. However, corrections can take the form of time or price, so it is still possible that this sideways action on Wall Street could turn into a bull flag type pattern that would take prices higher but it seems to me that it is running out of time. NYA index is saying higher but the Fear and Greed Index is not confirming this rally back up to the highs. All these conflicting signals are getting very tiring....
US Dollar weaker again. Remember this is the key.
Been thinking further and basically adding to my thoughts I posted last week on the year to come, and I’m of the opinion that volatility might be going to pick up – both up and down. For the past couple of months there has just been a steady rise leading some people into a false sense of security. Markets don’t like investors to get too relaxed about a trend so it seems to me that we must be getting pretty close to a wake-up call.
The problem I have is that any wake-up calls in the stock market would be good for gold but all the gold stocks I follow closely are already looking a bit overbought after the super rises they have had over the past week/10 days. Yes, I know markets can get overbought and stay overbought but this would mean really overbought. Also I have mentioned previously that I expect gold to eventually get back up under its really heavy overhead resistance at $1,200. Not that much further to go. Still must not try and tell the market – just be a disciple that tries to follow its signals. Also have to remember that gold got really oversold on its decline so a mirror image rise is not that out of character.
Interesting that it was platinum that dragged the metals higher overnight. Palladium had been the main force earlier. Also interesting that wheat has managed to put more than one or two days rise together in a row. There are so many potentials in the commodities that have been dormant for so long.
We have been following slavishly the trend of New York. However, the XXJ index, that I have mentioned so many times over the past couple of months, is getting itself really squeezed into a tight corner as it continues to rise. Not happy.
But the good thing is that there seems to be more speculative money around. That usually happens when gold is better but this interest has spread across most sectors. I mentioned yesterday so many pretty patterns starting to appear in the bottom end of the market.
As I keep saying, this holiday period might be quiet and some people might even go so far as to say it is boring, but I say, stay alert – so many times over the years, we can look back and see an amazing number of market points that were solidly built in this period.
(20min delay)