Reminder: ETF updates are presented as a snapshot to current status only. More in depth work is done in NFTRH.
GLD turned last week’s resistance to support, which is now being tested as Ukraine hype unwinds and FOMC looms. This is a still bullish chart working off an over bought condition.
GLD is in consolidation at resistance. It is bullish until proven otherwise. Support is anywhere from the visual lateral support at 122 to the gap and moving average convergence around 125.
The Ukraine hysteria on Monday was almost too perfect; almost too per the script. One indicator that was done no good what so ever by the charge of emotion was the TLT-SPY ratio (one measure of risk ‘off’), which jumped as the least savvy players took the bait and knee jerked bearish as the media pumped the story. The subsequent reversal has damaged TLT-SPY, technically.
So if risk does not go ‘off’, where does that mean risk is? Well, risk would then be ‘ON’ in more ways than one.
Risk ‘on’ would mean further appreciation in assets and further degradation of the risk vs. reward ratio, which already sucks. A lousy RvR does not mean don’t play. It simply means that the market is at risk, similar to how silver was at 39>40>41>42>43…
GLD has reached the resistance that is the initial objective for the rally off the December bottom. On its bull signal but at a logical point of consolidation or reaction.
I get it. I continue to look silly posting bearish things as the market levitates. Well, here is another silly bearish nugget for good measure. Sure, the sky pilots in junk bonds are chasing yields to the heavens. Why, just look at HYG go!
But its ratio to long-term Treasury bonds is not so stellar. It’s just another small divergence to the bull festivities, but there it is none the less.
I happen to think nominal T bonds have a good shot at rising soon. If that should happen, for risk to remain ‘ON’ junk bonds had better rise even faster.
GLD is on a strong bull signal, but getting over bought as it heads toward the equivalent of gold 1340, our short term target. Over bought is seen in distance from EMA’s 10 and 20. A pullback would be normal.