Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Markets Macrocosm

Stock-Markets / Financial Markets 2015 Jul 28, 2015 - 02:18 PM GMT

By: Gary_Tanashian

Stock-Markets

Below is the opening segment of this week's edition of Notes From the Rabbit Hole, NFTRH 353. After this theoretical exercise we got down to nuts and bolts analysis, which provided logical 'bounce' targets (provided a bounce is indeed what is in play) for Gold, Silver and HUI, a compelling trend in the Commitments of Traders data and more talk about the trends that will need to be in place before a favorable macrocosmic environment is in place for the gold sector.


Not one to obsess on the gold sector in a vacuum, NFTRH also covered US and global stock markets, commodities, macro indicators and currencies as usual.

Macrocosm

Macrocosm

This week we boldly take NFTRH where no other market report has gone before. :-)

In Friday's NFTRH Update we noted that what happened on that day was a microcosm of what would be the optimal backdrop for a real change in the macro environment. On that day risk continued to come 'off' in the equity markets, stayed 'off' in commodities and reversed to 'on' in the precious metals. This is what the macro will look like one day when the planets are aligned correctly for gold bulls.

Of course, there was likely a lot of short covering going on in the gold sector as you and I were not the only ones who saw the trend line intersecting the 110 area on HUI. So it was a logical over sold reversal at a logical point. It also proves nothing other than the anticipated bounce has a chance to play out over the short-term.

A true investment environment in the precious metals sector will include what we saw on Friday, but this will be a trend as opposed to the flash we saw last week. I am not saying that we did not witness the beginning of such a macro trend, but again 110 was the bounce point on HUI and its ultimate downside target (itself not set in stone either) has been 100 .

Let's see how the gold "community" responds to the bounce. If the pompom brigade emerges in the form of bullish chart reading, admonitions against stock market participants and bullish gold projections well, you know the drill. It would paint Friday as a reversal on end of week short covering. Similarly, the stock market (which should be more or less inverse to gold in the next macro phase) is getting the correction it should have gotten before it was interrupted by the bullish sentiment reset (to over bearish) that came from the Greece hysterics.

So let's realize that Friday was a start. HUI got within hailing distance of its ultimate downside targets, but a short covering bounce in the coming days/weeks could reset the scene for a final decline. Similarly, the stock market is correcting but still in its big picture up trends. The rounding look of some indexes and outright daily downtrends in others (with momentum in the mix in the Internets and an unbroken uptrend in Healthcare) along with the fading participation we have noted in the Bullish % indexes showed the market was vulnerable to correction. For now, that is all it should be labeled (though cycles analysis puts markets in a topping window now).

On a real change in the Macrocosm, gold would establish an uptrend vs. the S&P 500, the Euro STOXX 50, the TSX, etc. US Treasury yield spreads would bottom and begin new up trends as stress (inflationary or deflationary) would be indicated within the financial system and the Federal Reserve would not be held in high regard and taken seriously by the average market participant. In short, confidence would be on the wane.

On Friday, confidence was in short supply. The patient will need regular check ups so that we can be on the spot and ready for the time when the likes of Friday's microcosm becomes a trend in the macrocosm. As it stood, gold was down vs. stocks on the balance of the week, yield spreads eased again and people took Janet Yellen seriously when she Jawboned about interest rate hikes. Those are the existing trends.

Subscribe to NFTRH Premium for your 25-35 page weekly report, interim updates (including Key ETF charts) and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at NFTRH.com and Biiwii.com.

By Gary Tanashian

http://biiwii.com

© 2015 Copyright  Gary Tanashian - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Gary Tanashian Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in