Not a lot to add tonight. The elections are a week away, and those results will shape our year-end outlook.
Markets could remain choppy for the next week or so. I’ll continue to look for directional clues and update daily. I don’t expect to make any significant trades until after the elections. However, I may try to short metals and miners if we get a decent rebound in the coming days.
-US DOLLAR- Since August prices have moved in 10-trading day increments (+/- 1-day) before correcting. It’s been 10-days since the 94.47 low. If the bias remains, we could see prices pull back.
-GOLD- Prices closed below the 10-day EMA. The 20/50 day EMA’s are crossing over just below today’s $1221.40 low. The $1218 level is vital going forward. Closing below it would promote a cycle top. However, prices would have to close below the cycle trendline to support another round of weakness into the December 19th rate hike. At the moment, it looks like $1246 is probably the October high we were expecting.
-SILVER- Prices are hanging by a thread at the cycle trendline. Silver could decline sharply if prices slide below $14.25 in the coming days. I think we will know if prices are breaking down or preparing for another bounce by tomorrow or Thursday.
-GDX- We finished with an indecision candle. Prices may bounce or consolidate for a few days. Of course, closing decisively below the trendline could trigger a sharp selloff.
-GDXJ- Juniors also finished with an indecision candle. If we get a decent bounce, I’ll look to short going into the elections.
-SPY- Stocks finished higher and on decent volume. I don’t think we will see a sustained move until after the elections so price may remain choppy. Nevertheless, a daily close above the 10-day EMA would support a potential low.
-TVIX- This proxy for volatility often tops at the 200-day MA near significant bottoms in the stock market. Progressive closes in TVIX below the 10-day EMA would support a low in stocks.
-WTIC- Technically speaking oil broke lower from the small bear flag but prices failed to follow-through. We see this sometimes when selling has exhausted. Holding today’s low ($65.33) tomorrow and Thursday would support the onset of a meaningful rebound.
Have a wonderful evening.