Why Tech Is Giving Me Jeepers – Watch Out, Gold

Powell testimony is over, with markets rejoicing the promise of still accomodative Fed. Value keeps surging over growth, and regardless of yesterday‘s great performance, tech has a vulnerable feel to it – semiconductors lead higher, fine, but communications didn‘t confirm, and the healthcare-biotech dynamic isn‘t painting an outperformance picture either. Real estate isn‘t taking as strong a cue while consumer discretionaries recovery could also be stronger. Thus far though, no need to think about taking losses to optimize your gains elsewhere.

Just as I wrote yesterday:

(…) the financials benefiting from the greater spread, won‘t save the day, as the key chart to watch now is technology and also healthcare. … The sectoral outlook remains mixed, even as value continues greatly outperforming growth this month. … Long-term Treasuries are starting to hold greater sway over the stock market fate now, too. The dollar‘s woes thus far continue playing out largely in the background.

Did gold shake off the TLT shackles? I‘m getting increasing doubts that only a strong move to the upside would dispel. As long-term Treasuries were staging an intraday reversal, gold took an intraday plunge before recovering. Not a good sign of internal intraday strength. Could it be a bullish flag? Still possible, but again, gold would have to rally from here. Doing so would result in a bullish divergence in its daily indicators.

The precious metals sectoral dynamics remains positive though – silver and platinum are bullishly consolidating, and as I‘ll show you in today‘s final chart, the many mining indices are doing fine as well. The overly strong reflationary (I would call a spade a spade, and say inflationary) efforts are driving commodities higher in a supercycle just starting out.

Not to get complacent, GameStop (GME) squeeze has made a comeback yesterday. Will it coincide with broader stock market woes on par with late Jan? Way too early to say – let‘s jump right into the charts for an objective momentary view instead.

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Monica Kingsley 1 month ago Author's comment

That was the fresh update for yesterday's session. Gold was stuck in the low $1770 indeed, but crucially I looked for the oil-copper tandem to work, and it didn't. Right now, We're in a weak constellation with both silver, oil, and stocks down. So, the outlook for the European session on Fri is more bearish than bullish for stocks really, and gold rather sideways in the coming hours. Just a quick point for everyone, if I include intraday updates, I am more often than not taking on the very short-term - what wasn't very likely in gold 2-3 weeks ago, can become reality when other markets align through that time. See TLT - we're on the cusp of stabilization for the moment - HYG absolutely didn't convince me yesterday.

Monica Kingsley 1 month ago Author's comment

3hrs 30min almost after U.S. open update: oil recovered indeed, but copper gained no traction, big names such as TSLA unconvincing, high volume in declining HYG, LQD down, TLT falling in a straight line with volume taking on recent records = weak SPX less fresh downside below $1,773 in gold... risk-off winning

Adam Reynolds 1 month ago Member's comment

Appreciate the update.

Monica Kingsley 1 month ago Author's comment

Thank you... stocks have a hard time finding bottom, and gold is looking almost as an oasis of stability in the recent hour. Even oil flipped negative on the day. Sea of red pretty much everywhere, including the dollar - look though at GME. Replay of end Jan?

Monica Kingsley 1 month ago Author's comment

110min after the U.S. open update: Markets are attempting to turn the (intraday) corner - if it has any legs today, look for oil to lead the way, followed by copper with silver. stocks recapturing the 3,910 level would be a great start really, if you're into (liquidity) miracles. I like the lower knot in $TLT & indecision in $XLK - thus far, the key words here.