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Stocks and Gold – Hot and Hotter

The rebound off Tuesday‘s lows continued semisuccessfully yesterday – further upside was rejected in spite of signs of strength both within the S&P 500 and outside markets. Technically, the bulls are still on a dicey, vulnerable ground – but increasingly less so. It‘s that VIX is calming down, and the put/call ratio has sharply moved into its complacent spectrum. And not only that – new highs new lows are rising in spite of the advance-decline line being little moved.

These are all budding signs of the upcoming break higher, and no change in the reflationary positive dynamics for stocks, let alone the red hot commodities. These (copper, agrifoods, base metals, lumber, oil) continue appreciating in spite of nominal yields pulling back a little these days. Make no mistake though, deflation isn‘t about to break out.

Lower yields no longer work in support of all the defensive sectors – technology has passed the leadership baton long ago to value stocks (think Mar), but appears to be bottoming here in spite of the reversal late yesterday. That‘s positive as any S&P 500 advance has to count on both value and tech pulling ahead more or less simultaneously. A welcome sign of returning animal spirits in the 500-strong index would be the Russell 2000 juices flowing again. Thus far, even the emerging markets are hesitating.

Not that they should be – the USD Index looks very vulnerable to me here, and its anticipated downside move (the smoke and mirror games I talked about on Monday and Wednesday are nothing but a distraction) would help lift international markets, and is also part of the explanation behind the strong commodity performance these days. This CRB Index move is key, and shows how far have real assets progressed in shaking off the dollar link – if you compare the dollar‘s value in early Feb and now, you are looking at very meaningfully higher commodity prices over that same time period.

Gold and silver are about to shake off the dollar shackles as they catch up to commodities that have left them in the dust since Aug or Nov. The key metrics such as nominal or real yields support the precious metals rebound increasingly more – don‘t be fooled, gold would break above the $1,800 resistance, whether you look at it as a purely psychological one, or as a neckline of an inverse head and shoulders on the daily chart.

The advance across the real assets, the precious metals and commodities super bull, would be more well rounded then. As I wrote yesterday:

(…) I‘m known for incessantly beating the copper bullish drum, and also the oil one, and here we are with further gains added since my latest oil analysis. Silver might pull back a little here, but look for it to mirror the insatiable appetite for base metals and other commodities. Beyond the Green New Deal mandates, the monetary demand is set to help power the white metal higher.

Let‘s move right into the charts (all courtesy of www.stockcharts.com).

S&P 500 Outlook

S&P 500

Short-term vulnerability and drying up volume as we‘re waiting for the daily indicators to turn brighter. Some more sideways trading would do that trick.

Credit Markets


The corporate credit markets keep signalling higher stock prices next, though. Notably, both HYG and LQD rose in spite of long-dated Treasuries turning up as well.

Technology and Value

tech, NYFANG and value

Did it bottom, did it not? For much of yesterday‘s session, the tweezer bottom approximating formation was in place. Both semiconductors (XSD ETF) and heavyweights ($NYFANG) gave up the encouraging intraday gains, and value (VTV ETF) wasn‘t strong enough to save the day. The question of a tech bottom remains of crucial importance, and looking at the distance between both XLK and $NYFANG price swings relative to the 50-day moving average, the odds are good for higher tech prices right next.

Inflation Expectations

inflation expectations

Inflation expectations have moderated their run, and are currently consolidating. The key sign here is that Treasury yields are no longer frontrunning them, but have come modestly down lately. Coupled with the USD/JPY below 109.20 making a rounding top, that‘s one less headwind for gold.

Gold, Silver and Miners

gold, HUI and TLT

Miners aren‘t underperforming, and the tentative signs of strength beyond the intraday flavor returning, are there.

gold, silver and copper to 10-year Treasuries yield

Silver didn‘t outperform yesterday, which means that the precious metals sector isn‘t approaching short-term overheating. At the same time, the copper to 10-year Treasuriy yields is increasingly supportive of the coming gold upleg.


S&P 500 is short-term consolidating only, and getting ready for a new upswing whenever the technology behemoths turn. These are the decisive factor of sustainable and noticeable stock market gains.

Gold and miners have bullishly consolidated yesterday, and are amply supported by related markets to score strong gains next.

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Monica Kingsley
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All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

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6 thoughts on “Stocks and Gold – Hot and Hotter”

    1. Hello dear Sandra!
      Thank you – the longer the waiting, the easier it then goes (not just in trading)…
      ETH is approaching those $3,300 I mentioned – look for whether the price would have issues declining some more or not or not, i.e. whether it would be a bull flag or you could get an even better entry point. Keep mailing and commenting you oil and crypto angel, I'll really have to expand!!
      Take care!

  1. Hi Mark, I am happy that you're cashing on all the index calls, and individual stock ones too. But as you know from my Disclaimer, whatever good results I bring the people, I am not recommending anything. I am merely sharing the very best that I can, more than happy to see people profit wildly or tweak my insights to their purposes – pity that you asked now and not earlier, my mining favorites have been AG and HL, and the latter made a great move today…

    1. I am understanding more and more how you and your analysis can work for me and I did take a trade a week ago that was an overnight and made a quick 10 %.
      I am very frustrated I didn't take the gold/silver trade you have been screaming about for 2 weeks and I have been in and out of EXK, HL, and AG for 4 months
      only to take small losses and swear I couldn't figure out the metals so I gave up. I think watching your analysis pan out and the amount of time you dedicate to
      the metals I will try harder to be patient and allow your trade calls to work out. I think I will probably use the AGQ and JNUG for my trades unless you have some
      better recomendations. Congratulations on the metals call and sticking with it till it came to pass !! I hope many of your followers profitted from your work.

      1. Hi Mark,
        thank you very much – you're very right, the more you read and the more patient on the swing calls readers are, the more they benefit. The technical outlook has been subtly improving since early Mar (btw I called the second imperfect bottom – not an undershoot, but just an attempt into improving technicals). Now, we will have an easier ride in the metals, the area above $1,850 is the next stop. AGQ behaves like SLV, which appreciates more than the very fair PSLV. When it comes to any leveraged funds such as JNUG, check out how they track the underlying asset (GDXJ) both on the way up and down to see whether the differences are worth it for you or not. I'm personally more of a fan of e-minis and plain unleveraged (index or individual companies') shares.
        I'm sure they did – I hardly ever lose active own site subscribers or Twitter followers (essentially only those who sign up for the account, and never ever return – a tiny minority). People just stick with me, and it's a great reward, thanks everyone reading this. Btw you could have witnessed me calling out there the progressing tech turnaround and strong rebound live.
        All the best in discovering how you can make my efforts work out for you!

  2. Cashed in on UVXY calls this morning and still holding some but would like some Jr. miners
    recommendations from you if possible to put the profits ?

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