10-Year Treasury Yield: Breaking Above Key Downtrend Signalling Further Upside
Gold: Resumption of the Long Term Downtrend
Gold: 2016 Top Measures to $1,045.
Equal Weight Gold Index: Breaking Below November Lows, Resuming Downtrend
Net commercial gold dealers
dropped further their positions,
which are now at the lowest level
since May 31st. However, the
positions are still sizeable. Large
speculators (hedge funds and
managed money) further took their
losses (attachment 1).
In the silver market large speculators
reduced their positions taking the losses.
Net commercial silver dealers also
reduced their short positions, which
historically are still large (attachment 2).
The KITCO Gold Survey indicates that
Wall Street and Retail investors are in the short
term still in the bullish camp. This is not a
good sign (attachment 3).
The Gold Barometers are neutral for
precious metal stocks and physical gold
and silver (attachment 4).
The Gold hourly chart (attachment 5)
shows that gold went nowhere last week.
As a matter of fact gold was unable to rally
after the sharp losses of the week prior.
Gold lost US$ 5.00 per ounce last week
(New York time 4:00 p.m.) to US$ 1,252
per ounce. It all looks that a test at the
US$ 1,200 per ounce will follow.
Gold stocks always outperform the physical
gold price in an environment of rising gold
prices. On the other side, falling gold prices mean
that gold stocks decline sharper than the gold
bullion. The attached chart 6 shows that the
ARCA Gold Bugs Index (HUI) climbed from a
low of around 100 in January 2016 to a high of
around 285 by August 2016. HUI lost about 30%
over the last two months, whereas the gold bullion
declined around 9%. The HUI Index has just
fallen a bit below the 200-day moving average
(attachment 6).
Looks like markets have hit a top. All indices seem to be turning over, some already have $SPX $DJIA $QQQ $DAX $VIX pic.twitter.com/G3pQl0kdn2— MasterFeeds (@MasterFeed) April 28, 2016
Financial Stocks in the U.S. look like they're breaking out on the upside! - Same thing in Canada
The attached chart 1 shows the ETF Financials Select Sector SPDR (XLF) US$ 22.93. This ETF reflects the financial stocks and the components of the index is shown in attachment 3.
Attachment 2 shows the Point&Figure chart
with the huge upside breakout in 2015 at US$ 16 for a 50% gain. Since July last year XLF has been forming a triangle formation and we expect a breakout on the upside in the next few weeks. The advance yesterday (+2.2%) was because JPMorgan released better than expected earnings (US$ 1.35 versus expected US$ 1.26).
In Canada, the S&P/TSX Capped Financial Index (XFN CAD 30.55) is approaching the all-time high of CAD 31 (attachment 4). And this despite all the mourns of the investors about Canadian banks to be too heavily
involved in real estate and being exposed to the big oil sector in Canada.
Canadian banks, as per the World Economic Forum, are the soundest banks in the world. When you compare the stock prices of the Canadian banks to the stock prices of some big banks in Switzerland or Europe you
will notice what we mean!!!
As the attached gold spot chart shows, a short-term triangle formation has been formed.
The RSI (Relative Strength Index) is falling. The Relative Strength Index compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset.
The MACD (lower chart) is flattening out. With the expiration of the March gold futures contract coming up, we just might witness huge volatility in the gold price.
