Stocks Bulls Can Take A Rest – But Gold Ones Can‘t

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

S&P 500 Outlook and Its Internals

S&P 500

Volume isn‘t sharply contracting, and coupled with the price action, the rebound above 3,900 has good chance of succeeding. The path most ahead to entertain your imagination as well, looks as a little congested series of daily candles followed by a longer white one. We‘re in a stock bull market after all, and still not in danger of a significant (10%+) correction as I have been writing throughout 2021.

S&P 500 market breadth

Market breadth indicators have turned the corner really, underscoring accumulation within a returning bull market advance – just as the bullish percent index shows. A brief sideways to higher consolidation of this week‘s advance would only help to solidify it before the next run higher.

Credit Markets

HYG:SHY vs stocks

High yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio‘s degree of non-confirmation has decreased, at least if you take direction into view. Finally, high yield corporate bonds are turning higher, and once they catch breath even more, the all time highs already in sight would be conquered as smoothly as the 3,900 zone I delineated earlier.

Gold Sector Examined

gold and HUI

Very mild upswing in both the gold miners and gold – along the lines of a daily consolidation with bullish undertones. This early in the precious metals upswing, miners are in the pool position, and their relative and gradually increasing strength has been visible since the early Mar days. So far so good here.

Silver, Platinum and the Rest

gold, silver and platinum

Silver isn‘t yet outshining the rest of the crowd, and that‘s good, for it often tends to do so in the later stages of the precious metals sector advance. Within the coming precious metals advance, I continue to view silver outperformance as expected. Part monetary metal, part commodity, it‘s uniquely position to benefit. Its yesterday‘s setback is nothing to be concerned about as the gold, gold miners and platinum rebound keeps doing largely well.

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Monica Kingsley 2 months ago Author's comment

SPX within sight of all time highs, and the tech didn't retreat an inch today. In the meantime, value stocks keep gently reaching hgiher, HYG got its act together - the bulls decided not to rest, and go for new highs in one day. More power and profits to the bulls!

Gold just can't keep above $1,730 today, and revisits the low $1,720s. Despite weakening USD and half of intradays TLT losses erased, the miners to gold ratio is running into headwinds again. Looking at silver and SIL, I am not writing off the unfolding rebound just yet, though.

Good evening everyone!!

Monica Kingsley 2 months ago Author's comment

Okay, no rest for stock market bulls as the 3,900 will be convincingly cleared today, in line with my opening sentence.

But gold bulls have a tad complicated their position with the retreat from premarket highs - they better refuse trading at the $1,720 volume profile zone that is still acting as a magnet, and surge higher if they are earnest. At least GDX is kind of behaving today so far - but no model of strength either.

Good day everyone!