I'm writing this post from a remote part of northern BC today. What better place to look at where markets ended the week than the quiet wilderness?
Recently, I did a post looking at bonds in detail (see Signals from the Bond Market).
Our bullish thesis on treasury bonds saw significant follow through this week. $TNX (10-year Treasury YIELD) fell big after retesting a broken 1-year neckline with bearish divergence
$UST (10-year Treasury PRICE) confirms this as well. UST continues to rally after breaking out of a 1-year base with bullish RSI divergence. Again, this is positive for Gold and the Yen.
$JNK:$USB (Junk Bonds to 30-year Treasury Bond) Ratio has a strong direct correlation with US equities. Notice how it recently broke down from a topping process with bearish RSI divergence similar to in 2011 when the S&P 500 fell almost 20%. This is not the place to be long US equities.
EUR (Weekly): After breaking down from 2-year support, the Euro has been wicking the horizontal support for 3 consecutive weeks. A retest of the broken uptrend is likely, especially given how bullish the Smart Money is on the Euro. Longer-term, the Euro may potentially be forming a H&S top.
Meanwhile, the US Dollar has been stalling at resistance for 3 consecutive weeks. We may get a retest of the wedge breakout before resuming higher in the longer-term.
Another very volatile week in Gold, however the bullish message on the weekly charts is still intact.
Gold (Weekly) is retesting its 1-year downtrend breakout as new support
Gold Miners (GDX, GDXJ, GLDX) are still retesting their 1-year inverse H&S neckline breakouts as new support. GLDX gives the clearest picture of this.
The HUI:GOLD ratio continues to strengthen nicely after breaking out of a 3-year falling channel
The one hurdle that I'm watching is the $HUI weekly chart. Notice how this week's candle couldn't break above the 1-year inverse H&S neckline. I do believe the HUI will catch up with the other mining indices and breakout. Keep on an eye on this.
KOL (Weekly) has been a true champion after breaking out from a 1-year price & RSI base.
URA (Weekly) posted a nice 3% gain this week, refusing to fall back to the all-time lows. The green line would be the first significant resistance.
Copper (Weekly) retesting the 3-year falling wedge breakout this week. Watch for these levels to hold
DBC (Weekly): This diversified commodities ETF is nearing major price & RSI support. Watch for those levels to hold.
Finally, here's the weekly chart for DBA - the agriculture ETF. DBA is finding support at the 61.8% fib retracement and RSI support. Watch for these levels to hold.
Both the Emerging Markets ETF (EEM) and Shanghai Index (SSEC) are consolidating after breaking out of multi-year wedges. Again, this ties in nicely with the bullish setups I'm seeing in the miners.
That's all for now. Enjoy your weekend!