Stocks keep cooling off at their highs, and calling for a correction still seems to be many a fool‘s errand. Does it mean all is fine in the S&P 500 land? Largely, it still is.
Such were my yesterday‘s words:
(…) It‘s still strong the stock market bull, and standing in its way isn‘t really advisable. With the S&P 500 at new highs, and the anticipated slowdown in gains over Friday, where is the momentary balance of forces?
Still favoring the bulls – that‘s the short answer before we get to a more detailed one shortly.
The anticipaded gold rebound is underway, and
After Monday‘s great rise, stocks continued without much of a pause yesterday too. Did they get ahead of themselves, or not really? And what about those correction calls, is the alarm over now? As said yesterday, the bulk of the correction in stocks, is over.
Is it clear skies ahead now? In my very first 2021 analysis 10 days ago, I‘ve called for a not so rosy February ahead. Last Friday, options expired with stocks taking a plunge, so the current month will get an optical boost. I am looking for higher prices, and no correction around the corner.
Gold is in a different situation, still basing and unable to keep intraday gains. Having predictably given up the silver short squeeze boost, the search for the local bottom in largely sideways price action continues. That‘s likely to be the case given that the dollar has stabilized and is peeking higher (before eventually moving to new lows, is still my call).
When Joe Public buys shares during a wave of euphoria, they do it close to a market top or before the beginning of a decline. Looking at you, SLV!
Silver rallied on Friday (Jan. 29), gold reversed its direction before the end of the day and so did miners, with the latter slightly underperforming gold. I wrote this before, and I’ll stress this once again today – the above is a perfectly bearish indication of an upcoming downturn in the precious metals market. This is not the first time it’s happening, and this combination of relative strengths worked reliably in the past. And we are not only just seeing that happening – we are seeing that at precisely the moment that is similar to previous patterns that were followed by sizable declines, which means that the relative bearish factors are even stronger.
forecasts
EUR and Silver: Going Down a One-Way StreetSince the precious metals like to ride along with the EUR/USD, and the latest Eurozone data looks grim, what are the implications for the PMs?
Feb 03, 2021 05:02 PM GMT
Just when everyone and their brother thought that silver was going straight to the moon… it plunged. And that’s not the end of the decline.
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Figure 1 – COMEX Silver Futures
I previously emphasized that silver’s volatile upswing is likely just temporary, and I discussed the Kondratiev cycle which implies much higher gold prices but not necessarily right away, because the value of cash (USD) would be likely to soar as well. The latter would likely trigger a temporary slide in gold – and silver.