I could write a long, detailed post trying to encompass global stock markets (generally bearish), commodities (bounce very mature) and bonds (mixed views, depending upon the flavor) but that is what I get paid to do each weekend in NFTRH reports and in private posts at the site. The beauty of public posts is that I can write as much or as little as I feel like writing. Today I feel like writing a little about gold (and silver) and the stock market. I also feel like using daily charts because I think time frames are pinching in for upcoming pivotal moves.

Gold is in a rather orderly Handle to a short-term Cup & Handle. Personally, I think gold and the precious metals complex need a correction because [insert CoT, Sentiment and over bought reasoning here]… But the chart thinks otherwise. If the Handle breaks upward and gold exceeds 1300, the measured target is to around 1370. It if goes the other way, watch for support beginning at the October high of 1191 down to 1180, figuring for wiggle room.

The weekly chart’s EMA 75, the former bear market shackle, agrees with that support.

Silver… if it looks like a short-term top and it quacks like a short-term top, is it a short-term top? If it is then the best support looks to be the 50% Fib retrace at 15.85.

Silver weekly shows the former bear market ball and chain as the EMA 55 at 15.77. Close enough to the 50% Fib to be in agreement on the general support area.

Silver would need to break below the daily chart’s EMA 20 (and the top channel line) to indicate that a correction is on. So far it is clinging to support. If that is given up, watch for the mid/high 15’s as a correction target.

The Gold-Silver ratio continues to show a bottoming stance after hitting deeply over sold levels. I like to use Silver-Gold when projecting a beneficial asset market environment and I like to flip it over to Gold-Silver when projecting a dangerous one. Well, it is flipped over…

Taking it a step further, a rising Gold-Silver ratio often goes with a rising US dollar, as liquidity comes out of markets. As bearish as Uncle Buck is on its intermediate trend, there is further short-term bounce potential, especially if the Gold-Silver ratio is bottoming.

This would not bode well for a stock market living on inflation expectations, because it sure is not living on corporate profit acceleration or guidance, apprehensive market sentiment or technical events like a higher high to October, close though it came. If the 50 day moving averages give out, look lower on the S&P 500, which is already losing momentum by MACD and RSI. The next stop could be at around the 2000 round number with further bearish probabilities if the SMA 200 were to give way.

If somehow silver reverses back upward to lead gold and the ‘inflation trade’ (including stocks) higher, it’s ‘party on, Garth’. But that is not the way things are pointing at this moment in time.

Gold is the first mover to new inflationary environments and silver is the best mover when it gets going and takes over leadership. Silver has led since mid-February (as noted in this post) and wouldn’t you know it, the stock market has rallied since then. But now silver’s leadership is in question.

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

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

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

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.