I’ll preface this by saying that, philosophically, I’m a fan of precious metals. I’d love to see them thrive and prosper. They are, as many have pointed out, the only real insurance against the insanity of central bankers.
However, metals have been in a bear market since September of 2011 (and how many assets can you say that about? Not many). I have made some posts lately suggesting that maybe – just maybe – they are starting to find firm ground. This morning, yet again, the floor has been knocked out from beneath gold, and it’s plunging to levels last seen in the depths of the financial crisis. This would be the equivalent of seeing a quote of 700 on the S&P 500. It’s a big deal.
IWM has been pushing up quite strongly as of lately, it is up 4 days in a row and in our view ripe for some pullback soon.
Have a pleasant holiday, everyone. See you for the shortened session Friday morning.
Let’s try to untangle the web of Fed-speak going on here. “Reality” for our purposes is defined as my opinion, obviously.
Yellen Defends Seven Years of Low Interest Rates in Letter to Nader
Warning that “an overly aggressive increase in rates would at most benefit savers only temporarily,” she argued in the letter released Monday in Washington that the Fed’s seven-year era of zero rates had sheltered American savers from dramatic declines in the value of their homes and retirement accounts.
The last two cycle trend days both delivered. There is a third this week on Friday but the volume will be very low and I’m doubtful about any decent trending move. We may well not see much in the way of any moves on the equity indices before next week now.
The retracement on SPX stopped just short of a test of the important 50 hour MA. As long as that holds the uptrend is intact. If that breaks then there is a nice looking pattern setup to retest the 2043 area. Resistance is at the current high at 2097. If we see a decent break above we should see a test of 2116 next. SPX 60min chart: