A Golden Market Memo?

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US Equities markets digested gains from early June and ended the weekup about +.6% on average. The message is mixed with cyclical sectors not following the key indexes price performance.  Emerging markets submerged while soft commodities firmed.

Gold and gold miners (GDX) also look poised to run. Gold has received a lot of good press from macro gurus like Paul Tudor Jones whom I traded alongside of in  the commodities pits in the World Trade Center.

This was when open outcry, which incorporated listening to the level of screaming while using hand drawn charts to read pure price action, was still king. Tape reading is a very useful skill in today's non- sensical markets (for more about this lost art click here).

This week’s highlights are:

  • Risk Gauges improved but still needs more improvement to reverse into full risk on
  • All Key US Equity indexes held in place from prior weeks improvement
  • Volume patterns significantly improved on key US Equity Indexes moving back to neutral and to a positive reading for the Dow
  • Gold Miners (GDX) closed at highest levels since Jan 2018
  • US long bonds (TLT) yields holding lowest levels since Oct 2016 and looks like more rate cuts coming
  • Emerging Markets lagging established markets which is not a good sign for global growth
  • Agricultural markets picked up some steam with Corn leading as weather patterns hamper planting across the planet
  • Market Internals improved (McClellan Oscillator) but our short-term market internal indicator shows both the SPY and IWM working off overbought levels
  • Market Sentiment (Vix.x) did not back off as much as expected on the rally, indicating possible further equity weakness
  • The Modern family (cyclicals) is still showing large negative divergences from key indexes

The takeaway from all the above is markets continue to give very mixed signals and we are still a tweet away from just about anything. The direction will most likely be determined by which way we move out of the recent compression zone.

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