Updates : Gold , US Markets .

 

Gold : I refer to the post dated february 17th – Link here –

The USD 1246 level mentionned therein was crossed – Gold Chart  – and the way is open for the discussed chart pattern to repeat i.e. a violent move to the upside with first targets in the USD 1300-1340 and thereafter a test of 2016 highs around USd 1375  . A move below USD 1220 support would switch my stance to neutral .

Gold Mines stocks –  GDX Chart   Barrick Gold Chart    –  are in consolidation mode after respectively 40 to 50% gain in the last 2 months and so for time being are divergfing from yellow metal move . Good entry levels should current reaction continue are at 22,50-23 for GDX (current 24,13) & USD 18,50-19 for Barrick (current 19,54). 

 

US Equity markets :

New all time highs  on SP500 and Dow Jones last friday . The Dow Jones (20821) closed higher for 11 consecutive days which is the longest streak in 30 years. Bullish sentiment is at very high levels (Daily sentiment index shows 91% stock bulls) and drives the move in the last few days. Psychology is the market driver , nothing else , no specific news . The last part of this rally is very selective as it was accompanied by a negative NYSE advance/decline ratio i.e. more stocks that closed down than up.. market « internals » are weak . See also another warning signal in last week Bloomberg piece (Link below) : Based on Novus Partners analysis , hedge funds liquidity is at all time low and such low liquidity level tended to precede markets selloffs in the past. The « Over-crowded » Trump trades as financials and cyclicals will be the most hurted in the inevitable correction to come. A 5 to 10 % correction looks likely in the near future and will be the base for a rally continuation into the summer.

https://www.bloombergquint.com/markets/2017/02/21/hedge-fund-liquidity-falls-to-danger-zone-in-u-s-stock-market

 

 

 

 

 

 

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