Yesterday’s recovery ended with a weak note as the stock bulls gave up the opening gap. It was disappointing in the very short term, especially given that other major markets have behaved similarly weakly.Even with corporate bonds goldOil is also unable to summarize their actions and is hanging in balance. How far can they go south, encouraging bears to investigate their defenses?
There’s a Fed meeting later today, not looking for hawkish surprises or complete optimism, but investors aren’t seizing the opportunity. It’s like a pre-US Open mantra to sell now and ask questions later.
Monday’s hanging man candlestick isn’t expected to bring a follow-through on Tuesday’s sale, but I’m looking for a bull to be tested today. Once the dust is clear, we can continue to make new highs, but the short-term storm (more precisely, the storm in the bowl) has not yet begun.
In today’s article, we’ll look at the status of the S & P 500, look at precious metals, and finally answer the questions raised about gold.
Let’s get started (chart courtesy) stockcharts.com).
S & P 500 outlook
Stock prices have fallen in a short-term balance following yesterday’s weak closing price. As we’re talking about, it invites unconvincing volume, a pre-market push to the late 3800s. The aftermath of the Federal Reserve Board will tone up for upcoming sessions, but I look for early credit market clues before buying a dip.
High yield corporate bonds (HYG ETFs) were weak yesterday and missed an opportunity to rise. On the contrary, it was a relatively weaker deal than the S & P 500. Whenever corporate bonds start to fall below stock prices, I’m careful and often watching from bystanders.
Investment grade corporate bonds (LQD ETFs) ended almost unchanged while government bonds were suspended and did not actually advance compared to Monday. They appear to be waiting for the Fed and are reluctant to move before downplaying the potential hawkish surprises (a positive economic appraisal will do the trick).
The high yield corporate bond to short-term government bond ratio (HYG: SHY) overlaid with the S & P 500 (black line) indicates a very short-term vulnerability of equities. How low are these as the greedy emotions go down further?
As you can see, yesterday he spoke optimistically towards the opening of a regular session, but the Bulls missed a good opportunity to act and the resulting signal favored the bear’s intervention now. I will. That is the essence of my trading style. It is neither permable nor permbear. Whenever the facts change, you’re ready to turn on the dime.
Market width indicators show that we are at the doorstep of the downturn. Instead of maintaining the ground, the new highs and lows steadily fell, but both the forward line and the forward volume were confused. It is not strictly a bullish constellation.
Featured precious metals
Gold also seems to be moving a little weakly in the short term. Not surprising, as the long integration isn’t over yet. This is more likely to tire you than to scare you. Simply put, the gold miner-gold ($ HUI: $ GOLD) ratio hasn’t sent any kind of confirmation that the sector has turned around, so the gold bull has arrived in the spring with another precious metal rise. It’s better to wait to tell.
The gold-silver ratio continues to step on the water and is not below its lows in early September. On the one hand, it is not traded too far from them, which means that silver does not act correctly in its weakest points. This is a sign of bullishness and shows that the integration over the last five months is actually getting longer.
Completing the big picture, the miner (GDX ETF) reveals that short-term performance is sluggish. The long upper knots and the lowest volume possible mean that you should be prepared for today’s down session.
From the reader’s email bag
Q: Hello Monica, congratulations, and best wishes to your new venture, and I am looking forward to follow your work.
I’m a working class boy in English, but now it’s very gray and chasing the gold market like a hawk. I’m a long-term investor in the PM sector and a big position in PM miners (most of the time I’m still profitable), but I’ve been nervous for the last six months. The best metaphor to describe my current situation is that a large fly has a large bowl of golden soup in which it is swimming. Its name is Mr. Radomski. His latest January 25 letter outlines “how far gold” gold can fall between $ 1,500 and $ 1,600, or perhaps fall. I would appreciate it if you could comment on his analysis and how things will evolve in the coming months. Thank you for not giving financial advice, but his very bearish view is offensive given the crazy world around us. I’m wondering why investing in PMs if gold can crash to these levels in the current situation.
A: Thank you for asking a question and allowing us to print as it arrives. I answer only from a personal point of view and do not comment on personality. I understand the complaints that money doesn’t really work, but as I tweeted yesterday, the fixes over the last few months aren’t scaring you, they’re tiring you.
Check out my August 2007 article written for Sunshine Profit S & P 500 Bulls meet non-farm payrolls, The “Call for Gold” section describes the outlook for yellow metal.Compare it with my Monday article S & P 500 rosy February?Not so fast See exactly what happened in the sector.
I have the same belief that I would say again today that this long-term integration of gold is in the late stages. For now, gold is still rangebound and will not reach the $ 1,500 to $ 1,600 level with repeated deflationary crashes. Absolutely not. Looking at the real world around us, the Fed has become more aggressive in expanding its balance sheet and new stimuli are coming (money isn’t on the balance sheet of commercial banks, so it’s in the real economy. (It’s flowing directly), and fiscal policy isn’t exactly tame either. Inflation is steadily recovering and is a matter of time to widespread recognition (think months).
Thank you for purchasing Gold Drop with both hands in such an environment. Copper is rising, base metals are not bad, and food price inflation is fierce. We have launched a 10-year product that exceeds the assets of paper. Can anyone tell me why gold crashes, even temporarily? What turmoil in the bond market should cause it? Undoubtedly, a single market never moves in a vacuum.
Quite the contrary, I see gold and Bitcoin as safe havens. Bitcoin is wild and unstable. I say Bitcoin has clearly separated, and if gold does the same, it means a motion of no confidence in the financial system. But this is not where we are now. Gold is exactly inspired by real interest rates. The King of Metals is also doing well during periods of rising inflation.
As far as you can see (a pragmatic view of things), keep the Fed as low as possible, rising inflation lowers the opportunity cost of holding precious metals, and you are a big driver of rising gold prices. I have. Given the steps in economic policy, how likely is a deflationary shock now? Instead, look for newly created money to fight high savings rates and stay in the real economy. Looking at the speed at which you receive money, it becomes the cherry blossoms on the cake. Next, gold is unbound.
But for now, be patient and don’t let the dark predictions match the real-world experience of what’s really happening in this brave new world. You are urged to abandon your previous decision. In fact, has the rationale changed? Don’t be afraid, always evaluate these honestly and honestly. No, the answer is that the driver is still in place and will gain an increasing advantage over time.
I think gold is broken higher from this long integration in spring. As explained in the article on Monday, miners have already been well defeated and are set to outperform metals early in this move.
See also the ratio of gold to silver. The spikes in favor of gold are what I look for in the next financial or liquidity crisis. Currently, nothing is on the horizon.
The time has come for daily stock prices to fall, and it is not yet known if it will encourage buyers to take action. Technology, communications and consumer staples were one of the highest performing sectors yesterday, but this does not represent a wide range of short-term strengths. Repeating the last sentence of yesterday’s summary, the closest day (see today’s session for evidence) will at least not endanger the bull market, but it could be pushed further.
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All essays, surveys and information represent Monica Kingsley’s analysis and opinion based on the latest available data. Despite careful investigation and best efforts, it turns out to be wrong and is subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or completeness of the reported data or information. Her content is useful for educational purposes and should not be relied upon as advice or interpreted as providing any kind of recommendation. Futures, stocks and options are financial instruments that are not suitable for all investors. Please be aware that you are responsible for investing. Monica Kingsley is not a registered securities advisor. By reading her writings, you agree that she is not responsible for your decisions. Investing, trading and speculating in financial markets can be at high risk of loss. Monica Kingsley may take short or long positions in any security, including those described in her writings, and may make additional purchases and / or sales of those securities without notice. ..
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S & P 500 and Gold Bulls, get ready to meet bears
https://www.financebrokerage.com/sp-500-and-gold-bulls-get-ready-to-meet-the-bears/ S & P 500 and Gold Bulls, get ready to meet bears