QE

Is this week, dare I say, the first "normal" week of 2021? Let’s take a look at what has happened in January so far in what is supposed to be a more prosperous year than 2020.Six days into 2021, the Capitol saw its first insurrection since 1814.Two weeks later, we inaugurated a new president.A week later, we saw class warfare before our eyes when Redditors from the "WallStreetBets" subreddit took on hedge funds and won.After declining in two of the last four weeks, the indices haven't seen a single down day all week. If Friday (Feb. 5) futures stay the same, we might not have a down day all week.Bulls on parade.Good morning investors, thanks for finally caring about strong earnings and not paying attention to GameStop (GME) (that was fun while it lasted, though).The sentiment is rosey and for good reason. Earnings continue to crush. Some form of President Biden’s aggressive stimulus could also pass within days. Jobless claims fell for the third consecutive week and hit the lowest level since the end of November, labor market data looks strong, vaccines hit a record daily total on Thursday (Feb. 4) and could be distributed at CVS and Walgreens within days, and the 5-to-30 year treasury curve was the highest its been since March 2016.Johnson & Johnson (JNJ) also just applied to the FDA for emergency use authorization for its one-dose vaccine. If approved, it could be game-changing.Happy days.My overheating and trading concerns in an overbought market remain, though, and have returned with a vengeance. I liked where many sectors and indices ended last week for potential BUY opportunities. This blazing win streak, though, is teetering on the edge of mania and overvaluation again.The S&P 500, Nasdaq, and Russell 2000 hit new record closes yet again.Are we in a bubble? Maybe.I worry about complacency and overvaluation.The S&P 500’s forward 12-month P/E ratio is back to nearly 22 and well above the 10-year average of 15.8. The Russell 2000 is also back at a historic high above its 200-day moving average. Tech stock valuations are even approaching dot-com bust levels, once again.According to a recent Bank of America survey of 194 money managers, bullishness on stocks is at a three-year high, and the average share of cash in portfolios, which is usually a sign of protection from market turmoil, is at the lowest level since May 2013.The market needed last week’s pullback, but it was nothing but a minor cooldown period thanks to Reddit in the grand scheme of things.We are long overdue for a correction. Corrections are healthy for markets and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).Well, hello, we haven’t seen one since last March!A correction could also be an excellent buying opportunity for what should be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Four Days in a Row and Counting for the S&P 500... Figure 1- S&P 500 Large Cap Index $SPXHave you ever rooted so hard for a team that can frustrate and excite you at the same time? Rip off a 4-day winning streak, followed by a slump of losing 5 out of 6 games, then come back with another winning streak? Does it have you questioning if the team is outstanding or a mirage?If I could compare the S&P 500 to a team, it would probably be the Philadelphia 76ers.This index looks like a winner and seemingly rips off multiple-day winning streaks weekly. Now and then, though, it can show inconsistency, make you scratch your head, and go on a frustrating losing streak.Two weeks ago, the S&P was hovering around a record-high. Its forward P/E ratio was the highest since the dot-com bust, and the RSI consistently approached overbought levels.By the end of last week, it was nearly oversold.Now, this week? Its RSI is back above 60, we’re at another record high, we’re on a four-day winning streak (which could be five if futures remain in the green), and we’re at a forward 12-month P/E ratio at nearly 22 and well above the 10-year average of 15.8.I said before that once the S&P approaches a 3600-level, we can start talking about it as a BUY. Well, the index came pretty darn close to it last week, but it wasn’t enough for me. Despite this week’s rally, short-term concerns remain, with long-term optimism.To me, because of the RSI and how the index has traded, it remains a HOLD. But we’re teetA short-term correction could inevitably occur by the end of Q1 2021, but for now, I am sticking with the S&P as a HOLD.For an ETF that attempts to directly correlate with the performance of the S&P, the SPDR S&P ETF (SPY) is a good option.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

The EUR/USD has finally dipped back to long-term support around 1.20ish and I see a lot of bearish commentary around it. The bigger picture is still bullish as per the weekly chart, so I will be actively looking to go long on the first sign of a bull signal on the daily or lower time frames. The EUR/USD is potentially following the path of 2017-18 as per the chart. If correct, rates could head toward 1.25+ in the next couple of months or so. With the EUR/USD at these levels, the EUR/GBP and other euro crosses could find support. As a side note, this is why I decided that the private group should take profit on the first portion of their short trades on the EUR/GBP. It may be the incorrect decision, but there is nothing wrong with taking +123 to +169 pips profit on this slow-moving pair. The second portion can remain open in case it keeps going lower over time. This is the before/after chart of the EUR/GBP trade: Going back to the EUR/USD topic, I remain bullish on this pair because of the potential return to normalcy with COVID vaccines slowly being rolled out etc. I also think the ECB is done with providing additional measures. The next move is likely to be tapering of QE, but this won't happen any time soon.

Joe Biden’s election as president and his first economic proposal proved negative for gold prices, but the presidency might yet turn positive.The 46 th presidency of the United States has officially begun. What does that mean for the U.S. economy, politics and the precious metals market?Let’s start by noting that this will not be an easy presidency. The epidemic in the U.S. is raging, the economy is in recession , and public debt is ballooning. Foreign relations are strained while the nation is strongly polarized, as the recent riots clearly showed. So, Biden will have to face many problems, with few assets .First, as he turned 78 in November, Biden has been the oldest person ever sworn in as U.S. president. Second, his political capital is rather weak, as the 2020 election is more about Trump’s loss than Biden’s victory. In other words, many of his voters supported Biden not because of his merits but only because they opposed Trump. Third, he will have the smallest congressional majorities in several years. Democrats have only ten more seats than Republicans in the House and the same number of seats in the Senate. And even with Kamala Harris as a tie-breaker, Biden could not lose a single Democrat senator’s vote to pass any legislation in Senate.On the one hand, Biden’s tough political position seems to be negative for gold prices, as it lowers the odds of implementing the most radical, leftist political agenda. On the other hand, Biden’s difficulties also lower the chances of sound economic reforms, which is good news for the yellow metal. A divided Congress and Democratic Party with an old president at the helm, who has a weak personal base could result in political conflicts and stalemates which would prove positive for gold.When it comes to economics, Biden has already presented his pandemic aid bill, worth of $1.9 trillion. The proposal includes direct payments of $1,400 to households, $400 per week in supplementary unemployment benefits through September, billions of dollars for struggling businesses, schools, and local governments, as well as funding that would accelerate vaccination and support other coronavirus containment efforts. Biden also wants to raise the minimum wage to $15 per hour, which will not appeal to Republicans. The big size of the package will also be disliked by the GOP.The fact that Democrats have won the Georgia Senate runoffs, taking control over the Senate, increases the chances that Biden will implement his economic stimulus. The equity markets welcomed the idea of another large aid package, in contrast to bond investors who sell Treasuries, causing the yields to go up. The increase in real interest rates pushed gold prices down , as the chart below shows.It seems that investors liked the idea of big stimulus, hoping for acceleration in economic growth. However, printing more money (I know, the Treasury technically doesn’t print money – but it issues bonds which are to a large extent bought by the Fed ) and sending checks to people doesn’t increase economic output. Another problem is that the U.S. can’t run massive fiscal deficits forever and ever , hoping that interest rates will always stay low.So, although Biden’s economic stimulus may add something to the GDP growth in the short-term, it will not fundamentally strengthen the economy. Quite the contrary, the massive increase in government spending and public debt (as well as in taxation) will probably hamper the long-term productivity growth and make the already fragile debt-based economic model even more fragile. What is really worrisome is that Biden doesn’t seem to care about U.S. indebtedness – he has already spoken strongly against deficit worries and hasn’t proposed any actions to reduce the debt – and plans to unveil the additional economic stimulus.Hence, although gold declined initially in a response to Biden’s economic stimulus proposal, the new president could ultimately turn out to be positive for the yellow metal. After all, gold declined in the aftermath of the Lehman Brothers’ collapse , but it shined under Barack Obama’s first presidency. And Biden is likely to be even more fiscally irresponsible than Obama (or Trump), while the Fed under Powell is likely to even more monetarily irresponsible than under Bernanke (or Yellen ). Indeed, according to The Economist , Biden’s proposal is worth about nine percent of pre-crisis GDP, nearly twice the size of Obama’s aid package in the aftermath of the Great Recession . And, in contrast to previous crises, the Fed has announced the desire to overshoot its inflation target. All these factors should support gold prices in the long run.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.

We took for many months the stands of a Permabull in Silver and still do. Our primary call for acquiring physical Silver might find some hurdles. You might not get any. When we started in March of last year at the price of US$12 to urge for acquiring physical Silver holdings, we already experienced the vast percentage difference between the spot price and the actual acquisition price of Silver. This phenomenon persists to the present day. And what to do if one can’t purchase real Silver anymore?We look at the markets primarily from the perspective of risk. As long as you do not have too dramatic pullbacks (= a homogeneous equity curve), you can always recover from a temporary setback. After all, not every investment idea might work out.If Silver’s physical acquisition should come to a halt, we find mining stock ownership to be an excellent second choice.Here is why. Leveraged positions like ETFs, futures, and options allow special restrictions made by brokers and clearinghouses tied with their firms’ positions. Large players like this can also go belly up, especially in six sigma events. In that case, it is essential to find liquidity, the ability to transfer positions from one broker/clearinghouse to another, and mostly to liquidate positions. An option they may deny you through their regulative powers.Sil, Global Silver Miners ETF, Weekly Chart, ETFs might look good, but they aren’t:SIL Global X FDS Global X Silver Miners ETF in US Dollar, weekly chart as of February 4th, 2021.  Monthly Chart of Silver, Think long term and win:Silver in US Dollar, monthly chart as of February 4th, 2021.While Silver’s smaller time frames can be intimidating at times due to their volatility and recent limelight in the news, the larger monthly time frame clearly shows the health of the trend in motion and the long term opportunity.With this bigger picture in place, mining stocks will follow the uptrend.Daily Chart, Reyna Silver Corp in Canadian Dollar, The profit maze of Silver:Reyna Silver Corp in Canadian Dollar, daily chart as of February 4th, 2021.There is a vast array of choices to participate in mining stocks. You can employ various strategies like buying the market leaders or underdogs, for example. In this field, evaluation can change quickly based on depository discoveries, soil sample quality and many other factors. Another point of consideration is the accessibility of stock depending on the country you are trading from, which exchanges you can access.The above chart depicts the stock price of our sponsor Reyna Silver which we find undervalued and very attractive as a long-term investment. Stocks in this price range have the advantage that not too much of your money is parked long term. And still percentage returns can be substantial. (Disclaimer: Please note that Reyna Silver is the sponsor of our weekly silver chartbook).In this specific case, you can see that there is excellent support at CA$0.98 from a volume analysis perspective, right below where prices trade for a low-risk entry on a long-term time horizon.The profit maze of Silver:While we hold physical Silver in the highest regard to risk-averse wealth preservation (next to Gold and Bitcoin), additional investments in mining stocks are prudent. As a stockholder, you are a part-owner of a company with the acquired rights by law. From all the choices out there to participate in the Silver boom, mining stocks seem to be the ones with the smallest risk potential.With a goal of long term investing and wealth preservation, it is essential to look at investments from a risk perspective rather than leverage.Besides, many mining stocks pay dividends. That additional income flow can be reinvested, and one participates in the 8th miracle of the world: “Compound interest.” Automatisch generierte Beschreibung">Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

An interesting question was brought to my research team recently related to sector trends in 2021 and what may shift over the next 10 to 12+ months.  It is very difficult to predict any future trends that may set up over the next year or longer, but we took the effort to consider this question and to consider where trends may change over time. The one thing my research team and I kept returning to is “how will the global economy function after COVID and how much will we return to normalcy over the next 12 to 24+ months?”  We believe this key question will potentially drive sector trends and expectations in the future.  When COVID-19 hit the globe, in early 2020, a forced transition of working from home and general panic took hold of the general public.  Those individuals that were able to continue earning while making this transition moved into a “protectionist mode” of stocking, securing, preparing for, and isolating away from risks.  This shift in our economy set up a trend where certain sectors would see benefits of this trend where others would see their economies destroyed.  For example, commercial real estate is one sector that has continued to experience extreme downside expectations while technology and Healthcare experienced greater upside expectations.Longer-term Sector Trends – What's Next?When we look at a broad, longer-term, perspective of market sectors, we can see how many sectors have rallied, some are relatively flat, and others are still moderately weak compared to pre-COVID-19 levels.  The top row of these charts, the $SPX (S&P500), XLY (Discretionary), XLC (Comm Services), and XLK (Technology) sectors have all shown tremendous rallies after the COVID-19 lows in March 2020.  We can also see that XLI (Industrials), XLB (Materials), and XLV (Healthcare) have all started to move higher recently.One needs to consider the manufacturing component of technology, S&P 500/Industrial related companies, Technology and Healthcare services/products in relationship to Materials and Material/Chemical manufacturing.  Many of these industries require massive amounts of raw materials in order to build and supply finished products to the marketplace.  This suggests a broad commodity sector rally may be setting up while other stronger sectors continue to rally.Any resurgence of the global economy after nearly a year of efforts to find an effective cure vaccine/cure for COVID-19 will likely prompt capital to search out undervalued and strong sector trends.  Given the strength of the NASDAQ & Technology sectors as well as the Discretionary sector recently, we believe a shift this likely to focus on Healthcare, Commodities (Basic Materials, Agriculture and Metals), and certain manufacturing sectors – almost like a resurgence of the manufacturing/industrial economy.SPY Monthly Chart Shows Clear Breakout Rally AttemptWhen we compare the longer-term rally in the SPY to the QQQ (see the two charts below), we can clearly see the SPY has just recently rallied above the YELLOW trend line from the lows established in 2009 & 2010.  These lows represent a critical support/resistance channel for the markets moving forward from the 2009 market bottom.  They also represent an acceleration phase cycle in price when the price moves above this level. Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!Throughout almost all of 2011~2020, we can clearly see the price trend stayed below this YELLOW level.  Recently, though, the SPY price has rallied above this level for the first time since early 2011.  This suggests a broad SPY rally as initiated and that further upside price trending is likely as long as prices stay above the YELLOW support level.  If this level fails in the future, then a larger downside price trend may prompt a deeper price correction.The important factor for this chart is the recent rally above the YELLOW support channel.  The resurgence of the global economy and global central bank support may be prompting a very strong upward price phase – something we have not seen in more than a decade.QQQ Has Continued A Very Strong Rally Since 2009Comparing the same levels of the SPY chart to the QQQ chart presents a very different picture.  The QQQ price activity has, almost continually, stayed above the same YELLOW support/resistance level originating from the 2009 bottom.  This suggests that the strength of the technology sector, a major component of the NASDAQ, drove quite a bit of upward market expansion over the last 10+ years and is continuing to drive market prices higher.  This incredible trend related to technology services, products, support, and infrastructure has really served as a technological revolution over the past 2 decades.  Yet, will these expectation last if the market changes dynamics?It appears the QQQ is poised to target the $356~$357 level, which would complete a full 200% Fibonacci Measured Move to the upside. If and when that happens, we may see some increased volatility/rotation in the NASDAQ/Technology sector after watching this sector rally more than 100% from the March 2020 COVID-19 lows.Of course, technology will still continue to play a major role in our lives, but we may see these sectors attempt to restructure and re-balance if a new Commodity/Basic Material/Manufacturing phase takes root.  This process may take place over many months or years, but we believe it is very likely given the extent of the rally phases of these sectors and the process of rebuilding a functioning global economy.In Part II of this article, we'll dive deeper into the trends and setups that make this shift in global market sector a real potential for future profits.  Remember, we are not making any call that the market it topping or collapsing from these levels.  We believe the resurgence in the global economy may prompt a restructuring of value in many sectors over the next 2 to 3 years – where Commodities, Basic Materials, and Manufacturing may suddenly become hot sectors as the global economy attempt to rebuild after COVID-19.  This does not detract from the bullish trending in current sectors, it just means many undervalued sectors may become very hot over the next 15+ months.Don’t miss the opportunities in the broad market sectors over the next 6+ months, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Learn how the BAN strategy can help you spot the best trade setups because staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Have a relaxing Sunday!

EURUSD Snaps A Four Day Losing Streak The euro currency posted gains on Friday, marking an end to four consecutive daily declines. The rebound comes after price reversed near a three-month low of 1.1951.As a result, prices pared losses to close on Friday near 1.2050. This level initially served as support.If price action forms resistance here, then we expect to see the EURUSD trading within the price band of 1.2050 and 1.1951.A breakout from this range will further set the direction.To the downside, the next support level is at 1.1900. To the upside, a strong close above 1.2050 could open the way for price to test the 1.2144 level next.GBPUSD Price Action Invalidates Ascending Wedge Pattern The British pound sterling continues to hold a strong bullish momentum. The strong reversal after price fell to a two-week low has now invalidated the ascending wedge pattern.This keeps price action biased to the upside. After Friday’s close, the GBPUSD is trading back close to the three and half year high.The currency pair has also now closed with bullish gains for four consecutive weeks.Still, the momentum is slowing and unless the GBPUSD closes strongly above 1.3755, we expect price action to remain flat near the current highs.Oil Prices Settle Near A 13-Month High WTI Crude oil prices continued to advance with price action closing near a 13-month high. Prices briefly traded close to the next key resistance level of 57.35.We could expect a push higher for the commodity to test this level firmly. Further gains can be expected only on a strong breakout above this level.This means that a reversal near 57.35 will potentially see a possible retracement coming.The previously held resistance level near 53.77 remains the initial downside target for the moment.The price level near 40.55 however marks the 61.8 Fibonacci retracement level for the decline from 65.62 in January 2020 through the zero level on 20th April.Therefore, the correction, if applicable could see a stronger pullback.Gold Prices Pull Back From A Three-Month Low The precious metal managed to recover some of the losses on Friday. Price action closed with over one percent gains on the day, after falling to a three-month low previously.The retracement puts gold prices close to the 1817.80 level where resistance could form.Unless we see a strong close above 1817.80, gold prices could hold a sideways range between 1817.80 and the recent lows near 1784.81.Despite the current pullback, gold price closed on a bearish note for the week. Therefore, a continuation to the downside cannot be ruled out.

Stock bulls aren‘t wavering, and the upswing continues without a pause. Is the move (still) in balance with the relevant markets as one catches up to the other, or is a digestion of prior sharp gains nearby? It didn‘t come earlier this week, and in today‘s article, I‘ll lay down the rising probabilities of seeing at least a short-term pause in the stellar pace of gains since Monday. Gold pause gave way to selling pressure yesterday, spurred to a degree by the post-Monday‘s trading action. As both metals declined by around 2.5%, this move probably appears overdone to more than a few. Me included, as I called it a kneejerk reaction before yesterday‘s close. In today‘s analysis, I‘ll demonstrate why precious metals investors shouldn‘t be afraid of a trend change – none is happening. Let‘s dive into the charts (all courtesy of www.stockcharts.com). S&P 500 Outlook Stocks continue higher without stopping, and the daily volume rose a little. The bulls are strong, and took prices almost to the upper Bollinger Bands border amid positive moves in CCI and Stochastics. The daily of daily increases looks set to slow down as minimum though – starting today. Credit Markets High yield corporate bonds (HYG ETF) are still pushing higher. While I ignored Tuesday‘s and Wednesday‘s upper knot, yesterday‘s one is arguably a more respectable one, and that‘s because of the drying volume. It wouldn‘t be unimaginable to experience HYG to pause shortly, which would support my prior assessment about SPX. High yield corporate bonds to short-term Treasuries (HYG:SHY) ratio with S&P 500 overlaid (black line) shows that the two are tracking each other tightly in recent days. Actually, stocks are reaching for the leadership position, which given their performance since the start of November is very short-term suspect (stocks have lagged a little relative to the credit markets, and now they‘re trying to lead). That‘s yet another reason why to be cautious about (at least today‘s) trading – and for all the coming days, you know now where to find my daily analyses. Russell 2000 and S&P 500 Smallcaps aren‘t weakening vs. the 500-strong index in the least, which means that the stock bull market continues unabated. It also disproves the recent significant correction ahead calls on the internet that aren‘t hard to come by. Here we are after Friday‘s bloodbath that I called as out of whack with the internals, here we are at new index highs, this soon. In yesterday‘s analysis, I presented the value to growth ratio‘s message of the rotation from tech into value as value having to try once again. Technology (XLK ETF) had a strong week, so let‘s inspect its performance vs. the smallcaps – see the above chart. It shows that the Russell 2000 (IWM ETF) has carved a nice, almost rounded bottom, and is primed for higher values ahead, which also supports the notion of no stock market top ahead. Gold in the Spotlight The yellow metal is attempting to stage a recovery – a modest one thus far as it has been rejected at $1810 earlier. How disappointing is that? We‘ll see at the closing bell (my assumption is that the bulls will prevail today comfortably), but the implications of the moves thus far doesn‘t change my thesis of a break higher from the 5-month long consolidation in the least. It‘s that the technical (not to mention fundamental) factors propelling it higher, are still in place. The caption says it all – we‘re in the closing stages of the prolonged consolidation, and prices will rebound next, as so many preceding sizable red candles had trouble attracting follow through selling, and yesterday‘s candle is in a technically even more difficult position to achieve that. The moving averages aren‘t seriously declining, and I look for the death cross (50-day moving average puncturing the 200-day one) to fail relatively shortly. The Force index in gold agrees that we aren‘t seeing a really serious push to the downside here. Look at the start of 2021, how deep it went back then – we‘ll carve out a nice bullish divergence as I look for gold to get serious about turning up. Yes, the Force index won‘t decline as low as in early January. Silver didn‘t yield all that much ground as the short squeeze got squeezed. The chart is still bullish, and I stand by the calls mentioned in the caption here – a great future ahead for the white metal in 1H 2021 and beyond. Ratios and Miners The gold to silver ratio also continues favoring the white metal, whose this week‘s retreat (post-Monday) didn‘t affect the downward trending values in the least. The miners to gold ratio continues supporting my call of breakdown invalidation leading to a new precious metals upleg. I made the calls along these lines both on Tuesday and prior Monday, when I featured my 2021 prognotications on stocks, gold, dollar and Bitcoin – please do check them if you hadn‘t done so already. Senior gold miners (GDX ETF) are taking a back seat to juniors (GDXJ ETF), andthat‘s a hallmark of bullish spirits returning – first below the surface, then very apparently. While we have to wait for the latter, its preconditions are here. Summary The stock market keeps powering higher, and despite the rather clear skies ahead, a bit of short-term caution given the speed of the recovery and its internals presented, is in place even as the stock bull run shows zero signs of having topped. It‘s time for the gold and silver bulls to reappear after yesterday‘s outsized setback. Crucially, it hasn‘t flipped the short- and medium-term outlook bearish as the factors powering the precious metals bull run, are in place. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for both Stock Trading Signals and Gold Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals www.monicakingsley.comk@monicakingsley.co * * * * * All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

One week, Reddit bandits take on hedge funds and win, pumping up stocks like GameStop and AMC while the broader market sees its worst decline since October.What a difference a week can make.The indices then see their most significant gains the next week since Joe Biden's election victory and don't see a down day all week.Now we're here- still amid a tug of war between sentiments. For now, though, things are looking rosy. That is, of course, unless you're Patrick Mahomes this morning.Can the market keep up it’s winning streak this week? It’s possible. But I’d be surprised if we don’t see at least one sharp pullback before this Friday (Feb. 12).Can the market keep up its winning streak this week? It's possible. But I'd be surprised if we don't see at least one sharp pullback this week.Despite tailwinds moving the markets right now, such as stimulus progress, an ever-improving vaccine delivery, the possibility of an effective one-dose vaccine from Johnson and Johnson (JNJ), falling COVID numbers, and an improving economic outlook based on consistently falling jobless claims and corporate earnings that continue to crush, I want you to be wary of complacency and overvaluation.Yes, I know I keep saying this. I also know that earnings are on pace to rise by over 20% in 2021. Since 1980, only 12 years have earnings increased by 15% or more. Except for 2018, the market gained an average of 12% in all of those years.But consider some valuation metrics that scream “bubble.”As of February 4, 2021, the Buffett Indicator , or the ratio of the total US stock market valuation to the GDP, was at a level not seen since the dotcom bubble. If you take the US stock market cap of $48.7 trillion and the estimated GDP of $21.7 trillion, we're nearly 224% overvalued and 84% above the historical average.With the S&P 500, Nasdaq, and Russell 2000 all currently trading at record closes, fears of a bubble are genuine. The S&P 500’s forward 12-month P/E ratio is back to above 22 and well above the 10-year average of 15.8. The Russell 2000 is also back at a historic high above its 200-day moving average. Tech stock valuations are also approaching dot-com bust levels.Yes, the outlook is healthy and for good reason. According to a recent Bank of America survey of 194 money managers, bullishness on stocks is at a three-year high, and the average share of cash in portfolios, a sign of protection from market turmoil, is at its lowest level since May 2013.But always remember that when the market gets what it expects, and we’re expecting strength by mid-year, it’s usually a time to sell rather than buy.While I don’t foresee a crash like we saw last March, I still maintain that some correction before the end of Q1 could happen.Corrections are healthy and normal market behavior, and we are long overdue for one. They are also way more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. How Frothy is Tech Again?Figure 1- Nasdaq Composite Index $COMPI remain bullish on tech. Its earnings continue to defy expectations with stocks like Amazon, Alphabet, PayPal, and eBay all crushing estimates last week. I’m also especially bullish on subsectors such as cloud computing, e-commerce, and fintech for 2021.But please monitor the RSI.The Nasdaq is opening the week at another record high and is continuing to show strength. But there are clear echoes of the dotcom bubble 20-years ago, and the index has been trading in an RSI-based pattern.Let’s break down the Nasdaq since December and how it has reacted whenever the RSI has exceeded 70.December 9- exceeded an RSI of 70 and briefly pulled back.January 4- exceeded a 70 RSI just before the new year, and declined 1.47%.January 11- declined by 1.45% after exceeding a 70 RSI.Week of January 25- Exceeded an RSI of over 73 before the week, and declined 4.13% for the week.Every single time the RSI exceeded 70, I switched my Nasdaq call to a SELL.Why?The Nasdaq is trading in a precise pattern.The RSI is at around 67.50 so I’m not ready to switch my call again. But I am a bit concerned. Tech valuations, especially the tech IPO market, terrify me. SPACs don’t help either.The ratio of market value to total revenues has also not been this high since the dotcom bust.I still like tech and am bullish for 2021. But for now, I'm going to stay conservative and say HOLD while monitoring the RSI.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

After a frenzy of Reddit induced activity that captivated everyone, silver painfully gave back what it gained. What’s next for the white metal?As the precious metals’ version of moral hazard, silver tipped over the flowerpot, and left gold to clean up the mess. After silver’s short squeeze mania ended in tears on Feb. 2, the white metal gave back 97% of its squeeze -induced gains. Conversely, bearing the brunt of the market’s wrath, gold gave back 237% of the momentum-induced gains.Please see below:Figure 1As a result, silver is doing what it normally does near market tops: outperforming among comments regarding silver shortage .Positioning itself for an epic blow-off top, silver’s Feb. 1 surge ended in less than 24 hours. In addition, silver is approaching two triangle-vertex-based reversal points – which could come to a head by the end of February or early March. However, given the two set ups, they could be signaling one climactic reversal or two separate reversals of differing magnitudes. As it stands today, it’s still too early to tell.Figure 2 - COMEX Silver FuturesHowever, supporting the argument of a single blow-off top, I mentioned last week that the iShares Silver Trust ETF (SLV) took in nearly $1 billion in daily inflows on Jan. 29. For context, that was nearly double the previous record.Please see below:Figure 3 - Source: Bloomberg/Eric BalchunasBut because too much of a good thing can often be bad, the frantic buying mirrored an ominous period in SLV’s history.Please see below:Figure 4 - COMEX Silver FuturesIf you analyze the volume spikes at the bottom of the chart, 2021 and 2011 are a splitting image. To explain, in 2011, an initial abnormal spike in volume was followed by a second parabolic surge. However, not long after, silver’s bear market began.SLV-volume-wise, there's only one similar situation from the past - the 2011 top. This is a very bearish analogy as higher prices of the white metal were not seen since that time, but the analogy gets even more bearish. The reason is the "initial warning" volume spike in this ETF. It took place a few months before SLV formed its final top, and we saw the same thing also a few months ago, when silver formed its initial 2020 top.The history may not repeat itself to the letter, but it tends to be quite similar. And the more two situations are alike, the more likely it is for the follow-up action to be similar as well. And in this case, the implications for the silver price forecast are clearly bearish.Based on the above chart, it seems that silver is likely to move well above its 2011 highs, but it’s unlikely to do it without another sizable downswing first.In conclusion, if silver meets its maker, the white metal is likely to lead gold and the miners to slaughter. Moreover, silver is well known for its false breakouts and its relative strength is often a precursor to substantial declines. As a result, last week’s short squeeze was much more semblance than substance. In contrast, once the metals rebase and trade at more appropriate levels, an attractive buying opportunity will emerge.For more insight, let’s look at the relative performance of gold, silver and the gold miners, and compare how they’re impacted by the USDX and the SPX. If you analyze the chart below, you can see that the precious metals all broke down in September, after the USDX broke above resistance.Figure 5To explain, I wrote on Jan. 18:Like traffic lights flashing red, notice how the HUI Index (proxy for gold stocks) is trading well below its early 2020 highs? In stark contrast, gold remains moderately above its early 2020 highs, while silver is significantly above its early 2020 highs. The misaligned performance – with silver outperforming and gold miners underperforming – puts a bow on this bearish package.The bottom line?It is not only the case that silver was strong and miners were weak in the last several days – it’s been the case over the past several months as well. The implications are bearish.Also troubling is that the stock market that’s soaring in the medium term, hasn’t shined its light upon the PM market. Contrasting the mantra that ‘a rising tide lifts all boats,’ equity market strength hasn’t triggered a sustainable rally in silver or the gold miners. And this “should have” been the case – both are more connected to stocks than gold is. Gold stocks because they are, well, stocks. Silver, due to multiple industrial usesAll in all, based on what we saw in silver recently, it doesn’t seem that we’re likely to see much higher precious metals prices without seeing a major decline first.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Stock bulls aren‘t yielding an inch of ground, and technically they have precious few reasons for doing so. 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? As the proverbial rubber bands gets pushed upwards still, what about those rising probabilities of seeing at least a short-term pause in the stellar pace of gains since last Monday? Gold did recover on Friday, and didn‘t disappoint after Thursday‘s slide. The weak non-farm employment data certainly helped, sending the dollar bulls packing. It‘s my view that we‘re on the way to making another dollar top, after which much lower greenback values would follow. Given the currently still prevailing negative correlation between the fiat currency and its shiny nemesis, that would also take the short-term pressure of the monetary metal(s). What would you expect given the $1.9T stimulus bill, infrastructure plans of similar price tag, and the 2020 debt to GDP oh so solidly over 108%? Inflation is roaring – red hot copper, base metals, corn, soybeans, lumber and oil, and Treasury holders are demanding higher yields especially on the long end (we‘re getting started here too). Apart from the key currency ingredient, I‘ll present today more than a few good reasons for the precious metals bull to come roaring back with vengeance before too long. Let‘s dive into the charts (all courtesy of www.stockcharts.com). S&P 500 Outlook and Its Internals Stocks keep pushing higher, and the bulls are strong regardless of the little contraction in the daily volume. The daily indicators attest to the strength of the uptrend, but the pace of daily increases looks set to slow down as minimum though. Imagine that all the constituent shares in the S&P 500 had equal weight (i.e. forget about $NYFANG) – this is the chart you get. RSP ETF is only now challenging its highs, which is however not a disappointment or a red light flashing divergence at all. The march to new highs in the S&P 500 still looks satisfactorily broad based. Market breadth confirms that very clearly. Both the advance-decline line and advance-decline volume aren‘t disappointing in the least, and new highs new lows have made a strong comeback from preceding setback. The intermediate picture is one of strength. Credit Markets and S&P 500 Sectoral Ratios High yield corporate bonds to short-term Treasuries (HYG:SHY) ratio with S&P 500 overlaid (black line) shows that the two are tracking each other tightly in recent days. Stocks haven‘t yet yielded in their attempt at taking leadership position, regardless of their performance since the start of November (which makes the attempt suspect in the very short-term, as stocks have lagged a little relative to the credit markets back then). Bearish prospects? No way, dips are still to be bought. The financials to utilities (XLF:XLU) ratio still broadly supports the stock market advance. Looking at the bond market dynamics, I expect utilities to remain under pressure while financials would gain faster. I‘m not worried by the current relatively depressed ratio‘s value, and don‘t consider it a warning sign for the S&P 500 in the least. Consumer discretionaries to consumer staples (XLY:XLP) is another leading ratio worth watching. It‘s currently at quite elevated levels, as I view the discretionaries as extended while the staples have undergone an appealing pullback. Even though that makes for short-term headwinds in the ratio, it‘s still primed to support the stock market bulls. Gold & Silver Friday‘s gold session still is cause enough for optimism among the gold bulls about an important low being made. The other option would be a brief dip below Thursday‘s lows, which I however due to more powerful $USD reversal on Friday (erasing all Thursday‘s gains on the heels of poor non-farm payrolls data), don‘t look at as the more likely scenario currently. For now, it still remains most probable that Thursday‘s bottom in gold won‘t be overcome by much, not going down to more than $1760 (though I am obviously not betting all in my trading plans on this strong support) – if at all. It‘s the „if at all“ part that I subscribe to most heavily. Silver‘s chart is the livelier one, less under pressure but given the recent squeeze-driven run, the white metal might need to cool down a bit here. The 1H real economy recovery outlook is though guaranteed to put a solid floor below any sub $26 dip should that – which is as questionable as in case of gold – happen at all. Base building at roughly current levels would be a healthy development for the bulls to rejoice. Precious Metals Ratios Checking out on the gold to all corporate bonds ($GOLD:$DJCB) ratio reveals relative strength in the yellow metal currently. It‘s trading much farther above its late Nov low than the metal itself. Similarly to the case junior miners to senior ones are making, this is a hidden sign of strength in the precious metals sector, whose next upleg is knocking on door. The miners to gold ($HUI:$GOLD) ratio‘s false breakdown announcing another upleg that I discussed on Feb 01 already, is still intact, and sending the very same signals of internal strength inside the precious metals complex. The 1H 2021 future is bright, and approaching fast. Summary The stock market keeps powering higher, and despite the rather clear skies ahead, a bit of short-term caution given the speed of the recovery and its internals presented, is in place. I wouldn‘t be surprised to see today or tomorrow a brief and weak whiff of lower prices – nothing to call home about if you were a bear, that is. The gold and silver bulls apprear to be staging a return, slowly but surely, which is consistent with the price damage repair pattern frequently experienced after sizable red candles that felt to at least part of the marketplace as out of the left field. The case for the next upleg remains as strong as it has ever been in my view. Thank you for having read today‘s free analysis, which is available in full here at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for both Stock Trading Signals and Gold Trading Signals.

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 my open long position is solidly profitable right now. In line with the case I‘ve been making since the end of January, the tide has turned in the precious metals, and we are in a new bull upleg, which will get quite obvious to and painful for the bears. Little noted and commented upon, don‘t forget though about my yesterday‘s dollar observations, as these are silently marking the turning point I called for, and we‘re witnessing in precious metals:(…) The weak non-farm employment data certainly helped, sending the dollar bulls packing. It‘s my view that we‘re on the way to making another dollar top, after which much lower greenback values would follow. Given the currently still prevailing negative correlation between the fiat currency and its shiny nemesis, that would also take the short-term pressure of the monetary metal(s). What would you expect given the $1.9T stimulus bill, infrastructure plans of similar price tag, and the 2020 debt to GDP oh so solidly over 108%? Inflation is roaring – red hot copper, base metals, corn, soybeans, lumber and oil, and Treasury holders are demanding higher yields especially on the long end (we‘re getting started here too). Apart from the key currency ingredient, I‘ll present today more than a few good reasons for the precious metals bull to come roaring back with vengeance before too long.Finally, I‘ll bring you an oil market analysis today as well. So, let‘s dive into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsA strong chart with strong gains, and the volume isn‘t attracting either much buying or selling interest. That smacks of continued accumulation, with little in terms of clearly warning signs ahead.The market breadth indicators are all very bullish, and pushing for new highs, as the caption points out precisely.The intermediate picture remains one of strength.Credit Markets and TechnologyHigh yield corporate bonds to short-term Treasuries (HYG:SHY) ratio is powering higher significantly stronger than the investment grade corporate bonds to longer-dated Treasuries (LQD:IEI) one. The bullish spirits are clearly running high in the markets.Technology (XLK ETF) as the leading heavyweight S&P 500 sector, keeps charging higher vigorously after not so convincing post-Aug performance. Crucially, its current advance is well supported by the semiconductors (XSD ETF – black line), meaning that apart from the rotational theme I‘ve been been mentioning last Thursday, we have the key tech sector firing on all cylinders still.Gold & SilverLet‘s overlay the gold chart with silver (black line). The disconnect since the Nov low should be pretty obvious, and interpreted the silver bullish way I‘ve been hammering for weeks already. Please also note that the white metal has been outperforming well before any silver squeeze caught everyone‘s attention.Let‘s go on with gold and the miners (black line). See that end Jan dip I called as fake? Where are we now? Miners are no longer underperforming, and the stage is set for a powerful rise.Just check the gold miners to silver miners view to get an idea of how much the white metal‘s universe is leading everything gold. Another powerful testament to the nascent bull upleg in the precious metals.Continuing with gold and long-term Treasuries (black line), we see that the king of metals isn‘t giving in. Instead, it‘s rising in the face plunging Treasuries that are offering higher yields now. No, the yellow metal is decoupling here, as the new precious metals upleg is getting underway. The greenback is the culprit – and again in my yesterday‘s analysis, I called the headwinds it‘s running into. The world reserve currency will indeed get under serious pressure and break down to new lows as the important local top is being made.From the Readers‘ Mailbag - OilQ: "Hi Monica, I am glad I found you after you 'disappeared' from Sunshine Profits! As you had been back then already covering gold and oil at times, I wonder what's your take on black gold right now. A little great birdie told me oil will be the next Tesla for 2021 - what's your take?"A: I am also happy that you found me too! Thankfully, my „disappearance“ is now history. I‘ll gladly keep commenting, in total freedom, on any question dear readers ask me. Back in autumn 2020, seeing the beaten down XLE, I wrote that energy is ripe for an upside surprise. I was also featuring the fracking ETF (FRAK) back then. Both have risen tremendously, and it‘s my view that the oil sector (let‘s talk $WTIC) is set for strong gains this year, and naturally the next one too. Think $80 per barrel. Part of the answer is the approach to „dirty“ energy that strangles supply, and diverts resources away from exploitation and exploration. Not to mention pipelines. Did you know that the overwhelming majority of ‚clean‘ energy to charge electric cars, comes from coal? And that the only coal ETF (KOL) which I also used to feature back in autumn, closed shop? Oil is clearly the less problematic energy solution than coal.These are perfect ingredients for an energy storm to hit the States by mid decade. I offer the following chart to whoever might think that oil is overvalued here. It‘s not – it‘s just like all the other commodities, sensing inflation hitting increasingly more.SummaryThe stock market keeps powering higher, and despite the rather clear skies ahead, a bit of short-term caution given the speed of the recovery and its internals presented, is in place. Expect though any correction to be a relatively shallow one – and new highs would follow, for we‘re far away from a top.The gold and silver bulls are staging a return, as last week‘s price damage is being repaired. The signs of a precious metals bull, of a new upleg knocking on the door, abound – patience will be rewarded with stellar gains.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for both Stock Trading Signals and Gold Trading Signals.Thank you,Monica KingsleyStock Trading SignalsGold Trading Signalswww.monicakingsley.comk@monicakingsley.co* * * * *All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

EURUSD Gains But Watch The Hidden Bearish Divergence The euro currency snapped strongly above the 1.2050 level, but price action formed a lower high.The hidden bearish divergence on the chart could, however, see prices pushing lower.To the downside, the euro currency is forecast to push down lower to the 1.2050 level of support.If price breaks down below this level, then we expect further downside.The previous low near 1.1953 will however need to crash lower to continue the downtrend.But the support level near 1.2050 level will act as the line in the sand.GBPUSD Rises To A New Three-And-Half Year High The British pound sterling continues to push higher with price action rising to a new three and a half year high. The gains come as the GBPUSD moves closer to the 1.3777 level.Given that this level has served as support in the past, we could expect GBPUSD to form resistance at this level.If price reverses near this level, then we might expect price action to slip back to the 1.3500 level of support. But in the near term, GBPUSD will need to break down below the 1.3758 level of support to confirm the downside.In the event that the currency pair rises above 1.3777 level, then we expect a further upside that could see the next level near 1.4368.WTI Crude Oil Breaks From A 6-Day Winning Streak WTI crude oil prices are pushing lower following a six-day winning streak. Price action rose to a 13-month high prior to the pullback.But for the moment, the declines are likely supported near the 57.35 level of support. If price action loses this support, then we expect to see further declines.The next main support level near 53.77 will be the level to watch. For the moment, watch how the daily price action will unfold near the current highs.We would need to see a bearish follow through to the downside to confirm the correction.In the event that the support level near 57.35 holds, we could expect to see further gains.Price action will need to break out above the current highs of 58.59 in order to confirm further continuation to the upside.Gold Prices Rise For Three-Consecutive Days The precious metal is posting strong gains, rising for three consecutive days. Despite the gains, prices are below the 1850 level of resistance.In the near term, we might expect prices to move sideways within the 1850 and 1817.80 level. If price breaks out above 1850 level, we could expect to see further gains.The next key level will be near the 1874.00 resistance level. To the downside, the support level near 1817.80 will likely keep prices supported from any further declines.Meanwhile, we continue to see the hidden bearish divergence forming on the 4-hour chart.Therefore, it is quite likely that the 1817.80 level could be tested in the near term.

The EUR/CHF is a forgotten currency pair and rightly so because it hardly moves. So why bother writing about it? Well, I think it is about to start trending higher again and become more active. Don't expect it to behave like Bitcoin or the Dow, but it should provide a good, stable, trade for the bulls given the ongoing "risk-on" sentiment. I have recently written bullish forecasts on the GBP/CHF due to Brexit being avoided etc., and the private group ledges have benefitted from this pair already, as you can see from the following before/after charts: Source: TradingCandles.com and TradingView.com Source: TradingCandles.com and TradingView.com Source: TradingCandles.com and TradingView.com But like the pound, the euro could now also climb higher, especially against haven currencies like the franc and yen as we hopefully head towards more normal times ahead later this year. Anyway, straight to the point: the EUR/CHF monthly is looking bullish to me: Source: TradingCandles.com and TradingView.com The monthly chart shows the long-term bullish trend has been defended for several months now and rates have broken above the bearish channel. The path of least resistance is to the upside again. It is a very slow-moving pair, so if you do trade it long, make sure you don't expect the moon, and too quick. But the key takeaway point from this article is that the forgotten currency pair could be about to pop higher and become mainstream for FX traders again.

BTC-USD, Monthly Chart, The ladder of success:BTC-USD, monthly chart as of February 9th, 2021A part of this story is that those who fear and fight progress, on the other hand, are curious and would like to see some profits for themselves but can’t bring themselves to participate. In the monthly chart above, we can see profit potentials in each time segment illustrated by the percentage.While doubters try to be right, those who take risks make money. Not every story is a success story, but Bitcoin´s past, present, and in our opinion, future as well is more than rosy. BTC-USDT, Daily Chart, The runaway train:BTC-USDT, daily chart as of February 9th, 2021In each of these success stories comes one specific point that has its tricky part from a psychological perspective and, as such, an extra hurdle on how to participate in a market at that particular point of the trend.When advancements seem overbought, but the critical mass of investors is not yet on board, the supply is limited, and peer pressure in the professional market-making forces governments, institutions, hedge funds, banks, and so forth to participate to have a core holding. Everybody hopes for a retracement to get into the move with relatively low risk, but prices join the runaway train.At this point, prices seem already high compared to their origin and the steepness of the trend, but investors often wake up 5-10 years later and can’t believe they didn’t join the party with prices up to higher levels.We recommend to take aggressive entries on smaller time frames and reduce the risk factor by trading small position size. Due to the use of our quad exit strategy and letting runners run and transfer to higher time frames, one can still build a sizeable position over time.The daily chart above depicts such a train entry scenario with entry points at the midline of a linear regression channel.BTC-USDT, Monthly Chart, Bitcoin, the real move is still ahead:BTC-USDT, monthly chart as of February 9th, 2021This chart shows what we mentioned as a comment in our last paragraph. Waking up one day and looking back and thinking to oneself: “Why didn’t I buy Google, Amazon, Bitcoin @ $ …, now it is at $…”.There is no need to bet the farm, but just because Bitcoin is trading near US$47,000 doesn’t mean it is expensive. What is costly is shying away from participation just because entering the market here is the most difficult from a psychological perspective.Our 32-month projection price, based on a 4.76 Fibonacci expansion, is pointing towards US$210,000!Bitcoin, the real move is still ahead:A good example is Warren Buffett’s Berkshire Hathaway stock trading at US$350,000. Indeed, many have underestimated the immense growth of this stock over the last decade. Think about these price levels for Bitcoin within the next few years …  and beyond! Automatisch generierte Beschreibung">Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

Both the upside and downside in stocks appears limited as these keep cooling off not far away from recent highs. Yesterday‘s session sent us a telling signal that the bears might wake up from their stupor briefly. Largely though, all remains well in the S&P 500 land. The anticipated gold rebound is underway, and the significant upper knot of yesterday‘s session isn‘t concerning – gold is not rolling over to the downside here. Let alone silver. I view yesterday‘s trading as consistent with a daily pause within an unfolding uptrend. My open long position is growingly profitable, and I‘ve covered the bullish case in detail both on Monday and Tuesday. Today‘s analysis will strengthen the story even more. Given the dollar performance, I can‘t underline enough the importance of what we‘re witnessing – let‘s move to my Monday‘s dollar observations, which are silently marking the turning point I called for, directly relevant to precious metals: (…) The weak non-farm employment data certainly helped, sending the dollar bulls packing. It‘s my view that we‘re on the way to making another dollar top, after which much lower greenback values would follow. Given the currently still prevailing negative correlation between the fiat currency and its shiny nemesis, that would also take the short-term pressure of the monetary metal(s). What would you expect given the $1.9T stimulus bill, infrastructure plans of similar price tag, and the 2020 debt to GDP oh so solidly over 108%? Inflation is roaring – red hot copper, base metals, corn, soybeans, lumber and oil, and Treasury holders are demanding higher yields especially on the long end (we‘re getting started here too). Apart from the key currency ingredient, I‘ll present today more than a few good reasons for the precious metals bull to come roaring back with vengeance before too long. Finally, I‘ll bring you uranimum market analysis today as well. By popular demand, I‘ll dive into the commodity and its miners. You know already that my focus goes much further than the key topic of these analyses (stocks and precious metals). I am regularly covering oil, commodities and currencies too – just check out my trading story if you hadn‘t done so already. So, let‘s dive into the charts (all courtesy of www.stockcharts.com). S&P 500 Outlook and Its Internals A first day of hesitation into a very strong chart with non-stop gains recently, yet it‘s exactly these moments when the bears might try to raise their heads once again. Just to rock the boat, that‘s all. The Force index is warning that its solid upswing is due a reprieve here in what I perceive to be initial signs of selling into strength. Not too much, but distribution had an upper hand yesterday over accumulation. Credit Markets High yield corporate bonds (HYG ETF) didn‘t perform fine yesterday at all. On declining volume, the bulls couldn‘t close above Monday‘s opening prices, which given the post Jan 20 performance doesn‘t bode well for the short term. The steep uptrend simply appears in need of a rest. Smallcaps, Emerging Markets and Oil S&P 500 vs. the overlaid Russell 2000 (black line) isn‘t sending any warning signs of internal weakness when the two are compared. The rising tide is lifting all (stock) boats. Neither the emerging markets (black line) are diverging – the many stock bull markets around the world, they are all doing fine. The oil to gold ratio keeps leaning in favor of oil, just as it‘s expected during an economic recovery, coupled with inflation that‘s lighting fire across commodities. The stock bull isn‘t going down really. Gold & Silver Let‘s overlay the gold chart with silver (black line). My yesterday‘s words are a good fit also today – the disconnect since the Nov low should be pretty obvious, and interpreted the silver bullish way I‘ve been hammering for weeks already. Please also note that the white metal has been outperforming well before any silver squeeze caught everyone‘s attention. The gold to silver ratio sends a similarly clear message – the coming precious metals upleg will be characterized by silver outperforming gold for a variety of reasons beyond the industrial demand and versatility ones. Silver‘s above ground stockpile isn‘t being added to at the same pace as gold‘s is, and its recycling is less feasible practically speaking. Solar panels are but one of the ever hungry industrial applications, making heavy demands on silver reserves. Let‘s overlay the senior gold miners chart with both junior mining stocks (also gold) and silver mining stocks. See the late Nov turning point, where silver miners started outperforming both the gold juniors and gold seniors. That‘s another proof of the precious metals bull waking up. From the Readers‘ Mailbag - Uranium Q: Hi Monica, despite all the dire warnings of $1500 on gold, you seem to be spot on so far. Where do you think uranium might be headed. It looks risky but some say nowhere but up others nowhere but down! A: Thank you very much! That‘s honest analysis, free from fearmongering. I have been very vocal in writing here, on Twitter, and within comments everywhere that hypothetical technical targets divorced from reality (nonsensical) are dangerous to those who take them without a pinch of salt or two. Whenever I turn from a precious metals (or stock market) bull to a more cautious tone, you all my dear readers, will be the first ones to know. Just as now, the technical signs supporting the bullish (PMs) case are appearing increasingly forcefully (hello, dollar), the same way I‘ll present to you the weakening bullish factors whenever their time comes. We are far away from that in both markets, and in oil too (you‘ll hear me cover that one more often as well). Uranium was hit pretty hard with the Fukushima disaster of 2011 that brought about a long bear market. In 2016, a bottom was reached, and the commodity is slowly but surely on the mend. No spectacular gains, but modest positive returns that not even coronavirus managed to bring down. The same though couldn‘t be said about uranium miners as the below chart shows. Having taken a plunge, they‘ve recovered with the veracity of Bitcoin (called right in my first 2021 analysis), outperforming uranium as a commodity greatly. Still, these remain considerably below their 2011 highs (over $105), and given the energy mix and policies, I am clearly on the bullish side of the uranium opinion spectrum. Summary The stock market keeps holding gained ground, but regardless of the rather clear skies ahead, a bit of short-term caution is called for given the weakening credit markets, which may prove to be very temporary indeed. Expect any correction to be relatively shallow – and new highs to follow, for we‘re far away from a top. The gold and silver bulls are consolidating gains amid their return, and the bullish case for precious metals is growing stronger day by day. Crucially, it‘s not about the dollar here, but about the sectoral internals, and decoupling from rising Treasury yields. The new upleg is knocking on the door, and patience will be rewarded with stellar gains. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for both Stock Trading Signals and Gold Trading Signals.

Technically, the Dow and S&P snapped their 7-day winning streak.Technically.I hardly consider a decline of 0.03% and 0.11% for the Dow and S&P, respectively, a down day.Meanwhile, the Nasdaq and Russell saw a record close for who knows how many consecutive days.Can the market keep this up? Who even knows anymore. Everything seems to defy expectations and logic. Yeah, it's possible. But I'd be surprised if we don't see at least one sharp pullback before the end of the week.The sentiment is surely rosy right now. The economic recovery appears to be gaining steam, and the Q1 decline everyone predicted might not be as swift as we anticipated- if at all. President Biden's stimulus could officially pass within days as well and provide much-needed relief to struggling businesses and families.Have you seen the vaccine numbers lately, too? More people in the U.S. have now been vaccinated than total cases. On Monday (Feb. 8), vaccine doses outnumbered new cases 10-1. New daily COVID cases have also reached their lowest levels since October.With Johnson and Johnson's (JNJ) one dose vaccine candidate seemingly days away from FDA approval, the outlook is certainly more positive at this point than many anticipated.But we're not out of the woods yet, and three non-pandemic related factors still concern me- complacency, overvaluation, and inflation.Jim Cramer's "Seven Deadly Sins" from Mad Money Monday night (Feb. 8) reflect many of my concerns too:Source: CNBCYes, I know I keep saying to beware. I also know that earnings are on pace to rise by over 20% in 2021. Since 1980, only 12 years have earnings increased by 15% or more. Except for 2018, the market gained an average of 12% in all of those years.But consider some valuation metrics that scream “bubble.”As of February 4, 2021, the Buffett Indicator , or the ratio of the total US stock market valuation to the GDP, was at a level not seen since the dotcom bubble. If you take the US stock market cap of $48.7 trillion and the estimated GDP of $21.7 trillion, we're nearly 224% overvalued and 84% above the historical average.Keep in mind; this chart was dated February 4. This number has only grown since then. Tuesday (Feb. 9) was hardly a down day. If anything, it was plain dull.Fears of a bubble are genuine. The S&P 500’s forward 12-month P/E ratio is back to above 22 and well above the 10-year average of 15.8. The Russell 2000 is also back at a historic high above its 200-day moving average. Tech stock valuations are again approaching dot-com bust levels.Bank of America also believes that a market correction could be on the horizon due to signs of overheating.While I don’t foresee a crash like we saw last March, I still maintain that some correction before the end of Q1 could happen.Corrections are healthy and normal market behavior, and we are long overdue for one. They are also way more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what could be a great second half of the year.Bank of America also echoed this statement and said that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and ‘as good as it gets’ earnings revisions.”The key word here- buyable.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Small-Caps are Officially Overbought Figure 1- iShares Russell 2000 ETF (IWM)This pains me to write this because I love Russell 2000 small-cap index in 2021.But this is getting ridiculous now.As tracked by the iShares Russell 2000 ETF (IWM) , small-cap stocks have been on a rampage since November. Since the close on October 30, the IWM has gained nearly 50% and more than doubled ETFs' returns tracking the larger indices. What happened to the Nasdaq being red hot? This chart makes it look like an igloo.Since the close on January 29, the Russell has done just about the same again and gained 11.10%. It’s outperformed all the other major indices by a minimum of 5% in that period.Not to mention, year-to-date, it’s already up a staggering 18%.Small-caps are funny. They either outperform and underperform and can be swayed easily by the news. I foresaw the pullback two weeks ago coming for over a month, and unfortunately, I see the same thing happening now. But only for the short-term.I remain bullish due to aggressive stimulus, which could be put in motion this week.I also love small-cap stocks for the long-term, especially as the world reopens and this Biden agenda gets put in motion. It seems like things are finally trending in the right direction.For now, though, the index is once again overbought.The RSI is at a scorching 75, and I can't justify calling this a BUY or HOLD right now. It's an excellent time to take profits.SELL and take profits. If and when there is a deeper pullback, BUY for the long-term recovery.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Does gold’s most recent rally and the inflow of capital into silver change the fundamental outlook of the PMs? If so, what about equities?In short, yes, the U.S. dollar is down, thereby boosting gold. Yes, the recent massive interest in silver has everyone talking about getting in on the action. However, one must remember that markets don’t move in a straight line and countertrend rallies are expected along the way. Keep your eye on the ball. Now, let’s examine what exactly is happening.Gold moved higher once again yesterday (Feb. 9), but it reversed and declined before the closing bell. Miners declined as well. Does it mean that the next top is in or about to be in? That’s exactly what it means. Especially considering that gold’s reversal took place almost right at the triangle-vertex-based reversal and during USD’s breakout’s verification.Figure 1 - USD IndexI previously wrote that because assets don’t move in a straight line, it’s plausible that the USD Index retests its declining resistance line, while gold retests its rising support line. If this occurs, the USDX is likely to decline to the 90.6 range, while gold will receive a short-term boost . I emphasized that the outcome does not change their medium-term trends and the above confirmations signal that the USDX is heading north and gold is heading south.The part that I put in bold is exactly what is being realized right now. The USDX is correcting after the breakout, likely verifying the previous resistance as support.Unless the USDX breaks back below the declining medium-term support line in a meaningful way, the bullish implications for the following weeks will remain intact. At the moment of writing these words, the USD Index is practically right at the support line, which means that it’s quite likely to reverse shortly.Figure 2 - COMEX Gold FuturesGold formed a reversal yesterday, but it ended the session slightly higher. The latter might seem bullish, until one compares that to the size of the daily decline in the USD Index. The move lower in the latter was quite visible, so what we saw in gold should be viewed as USDX’s underperformance and thus a bearish sign.Let’s keep in mind that gold was just at its triangle-vertex-based reversal (based on the declining black resistance line and the rising red support line), which perfectly fits the shape of yesterday’s session – the shooting star reversal candlestick. The implications are bearish.Today, gold moved slightly higher, but the move was too small to change anything. Gold didn’t move above yesterday’s intraday high, which means that the short-term top might already be in.What about silver, did the white metal change anything?Figure 3 - COMEX Silver FuturesNot really. Just like gold, silver is taking a breather after the increased volatility. This is normal.Speaking of silver, please note how big the silver inflows were last week.Figure 4This might seem bullish at first sight – a lot of capital entering the silver market is bound to push the silver price higher, right?Wrong. This could simply be an indication of a temporary (yet massive) increase in the white metal’s potential (which no doubt will be realized, but not necessarily yet), which is something that we tend to see at market tops along with increased interest in terms like “ silver squeeze ” or “ silver manipulation ”.Please compare the first spike that you can see on the above chart with what silver did next (on the following chart).Figure 5Silver declined severely in the first half of 2013. Also please note that at that time, the silver market was already well after the massive monthly volume spike. We saw the same thing in mid-2020.The outlook for silver is very bullish for the next years, but the implications of the above factors are very bearish for the medium term.This is especially the case, since silver and mining stocks tend to decline particularly strongly if the stock market is declining as well. And while the exact timing of the market’s slide is not 100% clear, stocks’ day of reckoning is coming . And it might be very, very close.Eyes Wide ShutAs the NASDAQ Composite records yet another all-time high, investors are sleepwalking through one of the most dangerous equity markets ever.On Feb. 4, I warned that fund managers’ cash positions were frighteningly low.I wrote:Mutual fund managers are now holding less than 2% of their portfolios in cash – an all-time low.Figure 6 - Source: SentimenTraderMoreover, with fear of missing out (FOMO) taking a sledgehammer to valuation, pension funds are also following the bad behavior. If you analyze the chart below, you can see that pension fund cash positions have fallen to 2.6% – also an all-time low.Figure 7 - Source: SentimenTraderAnd with daydreams of riches continuing to transfix rationality, the upward inertia has left equity bears nearly extinct. As of Jan. 15 (the latest data available), S&P 500 short interest has hit its lowest level since the peak of the dot-com bubble.Please see below:Figure 8To explain the importance, fund managers’ cash positions and short sellers are akin to airbags in your car. In the event of a crash, airbags serve their purpose by cushioning the blow. Similarly, when the market crashes, short-sellers cover their positions (by purchasing the underlying asset), helping to alleviate the downward impact. Similarly, when fund managers’ cash positions are high, they have more ‘dry powder’ at their disposal to hit the bid and support prices. As a result, with both variables being excommunicated, nearly every investor is now driving with their pedal to the metal.Also encapsulating the speculative euphoria, last week, technology companies recorded their highest-ever weekly inflow.Please see below:Figure 9And not to be outdone, the Russell 2000 (a proxy for U.S. small caps) is also earning its fair share of speculative gold medals. On Feb. 4, I warned that money was pouring into companies that are on the brink of financial distress.I wrote:Figure 10The red line above represents companies with ‘weak balance sheets.’ Essentially, these are companies with high leverage ratios that rely on a strong economic backdrop to service their debt. At the end of 2019, these companies made up roughly 6% of the Russell 2000 index. Today, that figure has nearly doubled to an all-time high of more than 11%.Moreover, amid investors’ foray into the riskiest corners of the U.S. equity market, they’ve also bid the Russell 2000 (as of Feb. 8) to more than 39% above its 200-day moving average (also an all-time high).Please see below:Figure 11 - Source: thedailyshot.comIgnoring a sound diet, bond investors also continue to feast on junk food. On Feb. 8, the average yield on junk bonds (represented by Barclays U.S. Corporate High-Yield index) fell below 4% for the first-time ever.Please see below:Figure 12In addition, issuances of CCC-rated debt – the riskiest tier of junk – have been massively oversubscribed , as yield-hungry investors throw caution to the wind. More importantly though, the frenzy has lured even riskier companies to the market, with the group raising a record $52 billion in January alone.Even more indicative of the reckless behavior, the riskiest companies are also negotiating the riskiest loan terms. Peddling payment-in-kind (PIK) interest, junk bond issuers are now paying investors with IOUs. Unlike traditional bonds, where fixed cash flows are paid at pre-defined dates, PIK bonds are essentially loans on top of loans. Here, investors forego cash payments and add hypothetical interest payments to their bond’s principal balance. Then, at maturity, investors receive the entire proceeds.And what’s the problem?Well, as I’m sure you can tell, the IOUs are worthless if insolvency strikes first.Moving up the speculative ladder, in January, small traders bought call options at nearly 9x their 2019 pace. For context, ‘ s mall traders’ purchase 10 or less call option contracts and have exposure to 1,000 shares or less. As such, they’re usually the least sophisticated market participants.But because their Delta/Gamma splurge continues to impact dealers’ hedging activity, U.S. equity volume has gone completely parabolic. On Feb. 8, U.S. equities (trading at record prices) exchanged hands at nearly 4x their historical average.Please see below:Figure 13In addition, as more and more first-time buyers dip their toes into the equity pool, the ripple can be felt across Google Search trends. As of Feb. 8, online searches for “penny stocks” have exploded.Figure 14 - Source: thedailyshot.comEven more telling, retail interest in the stock market usually peaks during bouts of volatility. In a nutshell: when the stock market crashes and news outlets cover the story (that otherwise wouldn’t during normal times), it piques the interest of the general public. As a result, crashes tend to bring about investing tourists.Please see below:Figure 15 - Source: SentimenTraderTo explain the chart above, the blue line depicts the trend in “buy stocks” in Google searches over the last ~17 years. If you analyze the first two spikes in October 2008 and March 2020, they occurred alongside extreme market stress. However, if you look at the third spike on the right side of the chart (almost as high as March 2020), it’s occurred alongside U.S. equities current melt-up.The key takeaway?As the equity bubble grows larger, it’s sucking in more and more unsophisticated investors. However, as 2000 proved, overconfidence can give way to fear at the blink of an eye.As the final chart in today’s edition, investors’ belief in a utopian future has also come full circle.Please see below:Figure 16To explain, the white line above depicts the movement of Citigroup’s Global Risk Aversion Macro Index – which uses credit spreads, swap spreads and implied volatility to quantify investors’ perception of risk. As you can see, the index is now back to its pre-pandemic lows. More importantly though, the reading encapsulates all of the above and highlights the excessive complacency underwriting global equities.In conclusion, global stocks are living on a razor’s edge and their margin for error continues to dwindle. And due to gold and silver’s moderate-to-strong correlation with the S&P 500 (250-day correlations of 0.71 and 0.87 respectively), one false step could knock over the entire house of cards. As a result, it’s prudent to consider these cross-asset implications when assessing the future performance of the precious metals. However, once the events reach their precipice, the PMs will be able to resume their long-term uptrend.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

If you were not paying attention, Platinum began to rally much higher over the past 3+ days – initiating a new breakout rally and pushing well above the $1250 level.  What you may not have noticed with this breakout move is that commodities are hot – and inflation is starting to heat up.  What does that mean for investors/traders?DAILY PLATINUM CHART SHOWS CLEAR BREAKOUT TRENDFirst, Platinum is used in various forms for industrial and manufacturing, as well as jewelry and numismatic functions (minting/collecting).  This move in Platinum is more likely related to the increasing inflationary pressures we've seen in the Commodity sector coupled with the increasing demand from the surging global economy (nearing a post-COVID-19 recovery).  The most important aspect of this move is the upward pricing pressure that will translate into Gold, Silver, and Palladium.We've long suggested that Platinum would likely lead a rally in precious metals and that a breakout move in platinum could prompt a broader uptrend in other precious metals.  Now, the combination of this type of rally in Platinum combined with the Commodity rally and the inflationary pressures suggests the global markets could be in for a wild ride over the next 12 to 24+ months.This Daily Platinum chart highlights the recent upside breakout rally that has prompted a rally from $1050 to $1250+.  If this rally continues to target the 100% Fibonacci price extension, near $1300, then it will become very clear that Platinum is rallying away from other precious metals.  If this coincides with a continued general Commodity price rally, then we may start to see an inflationary cycle setting up that really change things – very quickly.This type of “triple-whammy” is very similar to the commodity/inflationary price rally that took place in the late 1970s and early 1980s.  For those of you that don't remember this trend, commodities started to rally in the early/min-1970s, prompting Gold to rally a low price near $100 (in 1976) to a higher level near $195 (in 1978) – but that was just the beginning.  After that rally stalled a bit, a bigger commodity price rally took place in 1979 that prompted a much bigger Gold price rally and started an inflationary price cycle that prompted the US Fed to take aggressive action in curtailing inflation.  Gold rallied from $169 in late 1978 to over $870 in early 1980 – a 420% increase.PLATINUM MAY LEAD A COMMODITY PRICE RALLYWe believe the rally in Platinum is a strong signal that a Commodity price rally is initiating and that an inflationary price cycle may be starting.  If our research is correct, evidence of this cycle phase will continue over the next 6+ months where commodities will continue to rally overall and where market inflation will become very tangible in the US and across the globe.  This will prompt the US Fed, and global central banks, to begin to take immediate action to contain any potential run-away inflation concerns – obviously tightening monetary policy and raising interest rates.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!Platinum may rally above $1500 if this rally extends to the 200% Fibonacci price extension level – and that move may come very quickly.  This weekly Platinum chart, below, shows a green arrow that points to the 200% Fibonacci price extension level (near $1500). Remember, the commodity price rally in 1979/1980 lasted more than 24 months and prompted a big 400%+ rally in Gold.  If that type of rally were to happen today, Gold would rally to levels near $7500 (or higher).Pay attention to what is happening with Platinum and you'll start to understand the inflationary/institutional demand for this unique metal.  If our research is correct, we may see a new rally in Gold and Silver fairly quickly as Platinum acts as a catalyst for an inflationary cycle paired with a Commodity rally (very similar to the 1979 to 1980 rally). It is a great time to be an active trader in these markets.  One of our recent BAN trades just closed out for a 47% gain.  These big trends may be here for the next 24+ months and 2021 is going to be full of these types of trends and setups.  Quite literally, hundreds of these setups and trades will be generated over the next 3 to 6 months using the BAN Trader Pro technology.  The BAN Trader Pro technology does all the work for us.Don’t miss the opportunities in the broad market sectors over the next 6+ months, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Learn how the BAN strategy can help you spot the best trade setups because staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Have a great day!

EURUSD Rises To A Two-Week High The euro currency continues to push higher, rising for the third consecutive day, to a two-week high.The gains, however, are slowing as price moves closer to the 1.2144 – 1.2177 level of resistance. We also continue to see the hidden bearish divergence on the chart, which could suggest a pullback.To the downside, price is likely to stall near the 1.2050 level of support for the moment. However, a close below this level could see the Feb 5 lows of 1.1952 come into the picture.If the current bullish moment continues, then the euro currency will need to break out above 1.2177 to confirm further upside.GBPUSD Pushes Higher But Gives Back Gains The British pound sterling continues to rise higher, marking a new high of 1.3866 intraday. But price action is pulling back after testing this level.The Stochastics oscillator is firmly in the overbought levels supporting the upside bias. For the moment, the downside remains limited until we see a lower high forming.Given the current pace of gains, the GBPUSD is seen testing the support area of 1.3790.A strong close on a weekly basis above this level is needed to confirm further upside.For the moment, the untested support level near 1.3759 will be the likely downside target in case of a correction.Oil Price Grinds Higher To A New 13-Month High WTI crude oil prices continue to maintain a strong bullish moment.Price action rose to fresh highs of 58.73. This makes price action likely to test the unfilled gap from January 20 last year at 59.47However, with price now trading below the trend line, this could act as a potential resistance for price action.To the downside, the support level at 57.35 is already tested albeit only slightly.Therefore, any declines could see this level coming under a firm re-test. Only a strong close below 57.35 will confirm a move down to the 53.77 level of support.Gold Prices Rejected Near 1850 The precious metal is struggling to breakout above 1850 as price action was firmly rejected near this level intraday.Overall, gold prices remain trading subdued compared to the gains made in the previous sessions.We expect the precious metal to maintain a sideways range between the 1850 resistance and 1817.80 level of support in the near term.The Stochastics oscillator is also starting to move a bit down from the overbought levels currently. This will likely mark an end to a three-day winning streak in gold.

Yesterday was a prelude, a little preview of things to come. We better get used to brief and shallow corrections again, after being lulled by the many preceding sessions. It appears that we‘re now going to get the consolidation period even as the overall S&P 500 metrics remain in a healthy territory. This is the (print-and-spend-happy) world we live in, and we better not fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this doesn‘t qualify yet in my view. So, for all the tech bashers, we‘re going higher – like it or not. Let‘s get right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Its Internals A second day of hesitation, this time with a thrust to the downside. Comfortably repelled, but still. Is it just one of a kind, or more would follow over the coming sessions? I think this corrective span has a bit further to run in time really. Remember my yesterday‘s words though – the bears are just rocking the boat, that‘s all. The caption describes nicely the mixed momentary situation in market breadth. I am looking especially at new highs new lows right now for whether they would be able to keep the relative high ground, or not, and what would accompany that. Now, it‘s amber light. A supportive warning sign comes from the put/call ratio – we‘re getting a bit too complacent here again. Well worth watching. Credit Markets High yield corporate bonds (HYG ETF) wavered yesterday as well, yet bottom fishers appeared, pushing up the volume. The bond markets are clearly buying the dip here. High yield corporate bonds to short-term Treasuries (HYG:SHY) ratio is still lining up closely with the S&P 500 index. Pulling in tandem, these aren‘t showing any momentary divergence. When it comes to the high yield corporate bonds to all corporate bonds (PHB:$DJCB) ratio, the picture gets different, as the riskier end of the corporate bond spectrum isn‘t firing on all cylinders. That‘s part of the watchout story justification. Technology, Value and Growth Technology (XLK ETF) hadn‘t suffered a profound setback really yesterday. The volume wasn‘t there, and half of the intraday losses were recouped – the bears weren‘t serious, and as the caption says, be wary of tech bubble callers constantly warning about significant corrections with unclear timings. Both tech and S&P 500 are primed to go to much higher levels before things get really ridiculous. Also, remember that since September, the sector has been not at its strongest really. Here comes the rotation between value and growth – given the current status, tech has been underperforming. It‘s the other sectors that are now catching up since the start of Feb. All in all, the chart doesn‘t scream imbalance – the accompanying S&P 500 advance has been relatively orderly. Gold & Silver Today‘s precious metals section will be shorter than usually, because the many bullish factors discussed throughout the week, remain in place. Just check out the metals & miners ratios, or yet another timely call of the dollar top. Let‘s dive into the gold and silver price action that I tweeted about earlier today. My open long position remains profitable, and the very short-term question remains what‘s next. Regardless of the upper knots, I don‘t see the short-term uptrend as exhausted, and you all know pretty well my medium- and long-term bullish case (stronger for silver than for gold in 2021 really). Despite being quite hot in the short run, silver isn‘t willing to correct to any kind of reasonable target. I view the current indecision as part of an ongoing consolidation, and don‘t discount the bullish implications. The key takeaway however is, how much would have to happen to flip this (and gold‘s) chart bearish. I remain cautiously optimistic in the short run, and very optimistic as regards the medium- and long-term. Summary The stock market keeps holding gained ground, having defended yesterday‘s values largely. Given the signs of creeping deterioration, which is however not strong enough to break the bull‘s back, let alone jeopardize it, the short-term caution in the 3,900 vicinity is still warranted. The gold and silver bulls are consolidating gains, and the bullish case for precious metals remains strong. Crucially, it‘s not about the dollar here, but about the sectoral internals, decoupling from rising Treasury yields, and holding firm against corporate ones. The new upleg is knocking on the door, and patience will be richly rewarded. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for both Stock Trading Signals and Gold Trading Signals.

Tesla has supported the price of Bitcoin, but it can affect gold as well.The bull market in cryptocurrencies continues. As you can see in the chart below, the price of Bitcoin has recently increased to almost $47,000 (as of February 10). The parabolic rise seems to be disturbing, as such quick rallies often end abruptly.However, it’s worth noting that the price of Bitcoin has partially jumped because of the increased acceptance of cryptocurrencies as a legitimate form of currency by the established big companies. In particular, Elon Musk, the CEO of Tesla, has recently published a series of tweets that significantly affected the price of Bitcoin, Dogecoin, and other cryptocurrencies.Furthermore, Tesla updated its investment policy to include alternative assets as possible investments. In the last 10-k filing to the Securities and Exchange Commission in January 2021, Tesla stated:In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity.Importantly, these assets also include gold :As part of the policy, which was duly approved by the Audit Committee of our Board of Directors, we may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds, and other assets as specified in the future.This means that Tesla wants to diminish its position in the U.S. dollar and to diversify its cash holdings. In other words, the company lost some of its confidence in the greenback and started to look for alternatives. So, it seems that Musk and other investors are afraid of expansion in public debt , higher inflation , and the dollar’s debasement .And rightly so! The continued fiscal stimulus will expand the fiscal deficit even further, ballooning the federal debt. With the budget resolution passed last week, only a simple majority will be needed in the Senate to get Biden’s $1.9 trillion package approved, a majority that Democrats have.Remember also that the U.S. economy added only 49,000 jobs in January , while 227,000 jobs were lost in December (revised down by 87,000!). The poor non-farm payrolls will strengthen the odds of a larger fiscal stimulus and easier fiscal and monetary policies.Hence, combined with the ultra-dovish monetary policy and a Fed more tolerant to inflation, the upcoming fiscal support could ultimately be a headwind for the dollar. Initially, the prospect of fiscal support caused positive reactions on the financial markets, but as the euphoria passes, investors start to examine the long-term consequences of easy money and the large expansion of government spending. Importantly, the larger the debt, the deeper the debt trap , and the longer the zero interest rates policy will stay with us, as the Fed won’t try to upset the Treasury.Implications for GoldWhat does Tesla’s move imply for the precious metals market? Well, we are not observing the kind of rally in gold that we are currently witnessing in the cryptocurrencies sphere (see the chart below). And – given the size of the gold market – it’s unlikely that Musk & Co. could ignite a mania similar to the one seen in Dogecoin. The gold market is simply too big. Even the silver market could be too large for similar speculative plays – as the failure of the recent attempt of a short squeeze has shown.However, the update of Tesla’s investment policy is a confirmation of gold as a safe-haven asset and portfolio diversifier . If other big companies follow suit, and we see an actual reallocation of funds from the U.S. dollar towards gold, the price of the yellow metal will get an invigorating electric impulse .If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care

EURUSD Reverses Near 1.2144 Resistance Level The euro currency is giving back the gains made from Wednesday as price action failed to rise above the technical resistance level near 1.2144.As a result, price action is quite bearish, amid the hidden bearish divergence as well. However, given the fact that price action has broken out from the falling price channel, this decline could merely be a retracement to the breakout level.We could see EURUSD retest the breakout level near 1.2080 to the downside. Below this level, the lower support area near 1.2050 is also likely to hold the declines.In the near term, we could expect the EURUSD to move in a sideways range between 1.2144 and 1.2080 levels.GBPUSD On Track To Retest 1.3590 The GBPUSD currency pair is giving back the gains made from the previous day with prices turning lower.On the intraday charts, we see prices trading currently below the 1.3821 swing low. A confirmed daily close below this level could potentially see price action testing the previous untested support level near 1.3790.As long as this support level holds, we could expect to see further upside. But for price action to continue higher, we would need to see the GBPUSD rising past the current highs above 1.3850.However, if the GBPUSD loses the 1.3759 level of support, then we could expect further declines in the near term.This would also potentially open the way for the currency pair to slide towards the 1.3500 level of support.WTI Crude Oil Rally Takes A Pause The recent pace of strong gains in the WTI crude oil market is seen to be slowing with prices likely to close flat for a second consecutive day. This could potentially see the onset of a short term correction in the markets.The initial support level near 57.35 is likely to be tested in the short term. As long as this support level holds, we could expect crude oil prices to maintain the upside bias.However, in the event that oil prices lose the 57.35 support, then we might expect to see a steeper correction. Below this level, the next main support comes in near 53.77.Given the recent bullish momentum in the oil markets, there is also strong evidence of a bearish divergence building up.Therefore, this could see a short-term correction which can only be confirmed upon a daily close below the 57.35 support level.Gold Prices Slip To A Three-Day Low The precious metal is down nearly 1% intraday as the short term bearish momentum is strong. Price action is likely to retest the support area near 1817.80.The stochastics oscillator on the intraday charts are also signaling further room to the downside. However, the declines might stabilize after testing the 1817.80 level.In the event that gold prices breakdown below this level, then we might expect to see further declines.The initial price level to watch will be the 1785.25 level which marks the lows from the 4th of February.A close below the swing low could potentially open the way for gold prices to test 1764.22 next.

The pandemic winter will take longer than we thought. The longer we struggle with the coronavirus, the brighter gold could shine.A long, long time ago, there was a bad virus, called the coronavirus , that killed many people all around the world and severely hit the global economy. Luckily, smart scientists developed vaccines that defeated the coronavirus and ended the pandemic . Since then, humankind lived happily – and healthy – ever after.Sounds beautiful, doesn’t it? This is the story we were all supposed to believe. The narrative was that the development of vaccines would end the pandemic and we would quickly return to normalcy. However, it turns out that this was all a fairy tale – the real struggle with the coronavirus is more challenging than we thought .First, the rollout of vaccinations has been very, very slow . As the chart below shows, on February 1, 2021, only about 1.77 percent of Americans became fully vaccinated against COVID-19.Of course, full protection requires two doses, so it takes some time. But in many countries, the share of the population which received at least one dose of the vaccine is also disappointingly low, as the chart below shows.It means that our progress towards herd immunity is really sluggish . At such a pace, we are losing the race between injections and infections. And we will not reach herd immunity until the second half of the year or even the next winter…Second, there is the problem of mutations . The new strains are rapidly popping up which poses a great risk in our fight with the coronavirus. One of these new variants was identified in the United Kingdom and quickly spread through the country. Although it’s not more lethal, it’s more infectious, which makes it more dangerous overall. And the more variants emerge, it’s more likely that we could see a mutation resistant to our current treatments and vaccines. Indeed, some of the mutations change the surface protein, spike, and have been shown to reduce the effectiveness of combating the coronavirus by monoclonal antibodies.The really bad part is that these two problems are strongly connected. The longer the vaccinations take, the more active cases we have. The more active cases we have, the more mutations happen, as each new infection implies more copies of the coronavirus, which gives it more chances to mutate. The more mutations occur, the higher the odds of a really nasty strain. Therefore, the longer the vaccination process takes, the more probable it is that it will not work and that vaccine-resistant variants might emerge.Given that in many countries vaccinations are practically the only rational strategy to fight the virus, the vaccine-resistant strain would be a serious blow. Surely, some vaccines could be relatively easily updated, but their rollout would still require time – time we don’t have.What does it all imply for the gold market? Well, the more sluggish the vaccinations, the higher the risk that something goes wrong and that our battle with COVID-19 will take more time. The longer the fight, the slower the economic recovery. The longer and bumpier road toward herd immunity, the slower lifting sanitary restrictions and social distancing measures, and the later we come back to normalcy. The longer we live in Zombieland, the easier fiscal and monetary policies will be, and the brighter gold will shine.Another issue is that we shouldn’t forget about the possibility of the pandemic’s long economic shadow. A recent paper has examined the effects of 19 major previous pandemics, finding a long shadow of the economic carnage. Although financial markets are still (wrongly, I believe) betting on a V-shaped recovery, the history suggests that a double dip is likely, as eight of the last 11 recessions experienced it. Recessions sound golden, don’t they?However, there is one caveat here. The sensitivity of economic activity to COVID-19 infections and restrictions has significantly diminished since the Great Lockdown in the spring of 2020. There are three reasons for that. First, people fear the coronavirus less. Second, epidemic restrictions are better targeted and implemented. Third, entrepreneurs adopted better to cope with the epidemic.The greater resilience of the economy means a smaller downturn and fewer long-term scars, which will limit any upward COVID-19 related impact on gold prices . But a softer economic impact also implies a quicker recovery, which – together with the upcoming big government stimulus – could increase consumer prices, thus supporting gold prices through the inflation channel. Indeed, commodity prices have been surging in 2021, so gold may follow suit.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.

For once, we have a week in 2021 where the market really didn't move all that much.Except for weed stocks that whipsawed GameStock-like and Bitcoin and Dogecoin making waves thanks to Lord Elon, it's really been kind of a boring week for the major indices.The S&P and Nasdaq closed at another record high Thursday (Feb. 11), while the Dow barely retreated from its own record high. The red-hot Russell has lagged this week.However, it’s all relative. No index has moved upwards or downwards more than about 0.30% week-to-date.It’s about time we had a week of relative quiet in the market.The sentiment is indeed still rosy right now. The economic recovery appears to be gaining steam, and the Q1 GDP decline everyone predicted might not be as sharp as we anticipated. We could also be days away from trillions of dollars of much-needed stimulus getting pumped into the economy.Earnings continue to impress, too, and are on pace to rise by over 20% in 2021. Since 1980, only 12 years have earnings increased by 15% or more. Except for 2018, the market gained an average of 12% in all of those years.We could also days away from FDA approval of a one-dose vaccine from Johnson and Johnson (JNJ).The COVID numbers and vaccine trend could truly turn the tide of things. More people in the U.S. have now been vaccinated than total cases, and the week kicked off (Feb. 8) with vaccine doses outnumbering new cases 10-1. Dr. Fauci also claims that vaccines could be available to the general public by April.But we're not out of the woods yet. Sure this week has been calm.But it’s almost been “too calm.”I still worry about complacency, valuations, and the return of inflation.“You wouldn’t know it from the sedate action in the averages,” but Wall Street is on “a highway to the danger zone,” CNBC ’s Jim Cramer said.“In a frothy market, stocks will have enormous rallies that are totally disconnected from the underlying fundamentals.”He’s not wrong.Look at the Buffett Indicator as of February 4. Where I track this indicator usually updates once a week and shows the total U.S. stock market valuation to the GDP. If you take the US stock market cap of $48.7 trillion and the estimated GDP of $21.7 trillion, we're nearly 224% overvalued and 84% above the historical average. This ratio has not been at a level like this since the dotcom bubble.Worse? This chart was dated February 4. The market’s only risen since then.This is what I mean by don’t be fooled by the relative calm of this week.The S&P 500’s forward 12-month P/E ratio is also well above its 10-year average of 15.8. The Russell 2000 is also back at a historic high above its 200-day moving average. Tech stock valuations are again approaching dotcom bust levels.Still not sold? Look at Goldman’s non-profitable tech index. It’s approaching an absurd 250% year-over-year performance.Bank of America also believes that a market correction could be on the horizon due to signs of overheating.While I don’t foresee a crash like we saw last March, I still maintain that some correction before the end of Q1 could happen.Corrections are healthy and normal market behavior, and we are long overdue for one. They are also way more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what could be a great second half of the year.Bank of America also echoed this statement and said that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and ‘as good as it gets’ earnings revisions.”The key word here- buyable.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. The Streaky S&P Is Back at a Record Figure 1- S&P 500 Large Cap Index $SPXThe S&P continues to trade as a streaky index. It seemingly rips off multiple-day winning streaks or losing streaks weekly.After the S&P 500 ripped off a streak of gains in 6 of 7 days, it promptly went on a 3-day losing streak, followed by another record close.I would hardly call that a 3-day losing streak, though. I’d even say it was a boring week for the S&P 500 with muted moves.The outlook is healthy, though, especially when you consider earnings. More than 80% of S&P stocks that have reported earnings thus far have beaten estimates.What could be on tap for next week? Who even knows anymore. But if earnings keep on outperforming, and the sentiment remains stable, it could be another strong week.The S&P’s RSI is ticking up towards overbought. However, because it’s still below 70, and because of the streaky manner in which the index has traded, it remains a HOLD.A short-term correction could inevitably occur by the end of Q1 2021, but for now, I am sticking with the S&P as a HOLD.For an ETF that attempts to directly correlate with the performance of the S&P, the SPDR S&P ETF (SPY) is a good option.For more of my thoughts on the market, such as red-hot small-caps and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Stocks are clinging to the 3,900 level, and the bulls aren‘t yielding. Without much fanfare, both the sentiment readings and put/call ratio are at the greed and compacent end of the spectrum again. How long can it last, and what shape the upcoming correction would have? Right now, the warning signs are mounting, yet the bears shouldn‘t put all their eggs into the correction basket really, for it shapes to be a shallow one – one in time, rather than in price.Gold‘s hardship is another cup of tea, standing in stark comparison to how well silver and platinum are doing. At the same time, the dollar hasn‘t really moved to the upside – there is no dollar breakout. If the greenback were to break to the upside, that would mean a dollar bull market, which I don't view as a proposition fittingly describing the reality – I called the topping dollar earlier this week. The world reserve currency will remain on the defensive this year, and we saw not a retest, but a local top.This has powerful implications for the precious metals, where the only question is whether we get a weak corrective move to the downside still, or whether we can base in a narrow range, followed by another upleg (think spring). February isn't the strongest month for precious metals seasonally, true, but it isn't a disaster either. As has been the case throughout the week, I‘ll update and present the evidence of internal sectoral strength also today.One more note concerning the markets – in our print-and-spend-happy world, where the give or take $1.9T stimulus will sooner or later come in one way or another, we better prepare on repricing downside risk in the precious metals, and also better not to fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this just doesn‘t qualify yet in my view. All those serious correction calls have to wait – in tech and elsewhere, for we‘re going higher overall – like it or not.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsThird day of hesitation, this time again with a thrust to the downside. Marginally increasing volume, which speaks of not too much conviction by either side yet. As the very short-term situation remains tense, my yesterday‘s words still apply today:(…) I think this corrective span has a bit further to run in time really. (…) the bears are just rocking the boat, that‘s all.The market breadth indicators are deteriorating, without stock prices actually following them down. Thus far, the correction is indeed shaping to be one in time and characterized by mostly sideways trading. Unless you look at the following chart.Volatility has died down recently, yet a brief spike (not reaching anywhere high, just beating the 24 level) wouldn‘t be unimaginable to visit us by the nearest Wednesday. In all likelihood, it would be accompanied by lower stock prices. Well worth watching.Credit Markets and TechThere is a growing discrepancy between high yield corporate bonds (HYG ETF) and its investment grade counterpart (LQD ETF). Both leading credit market ratios have been diverging not only since the end of Jan, but practically throughout 2021. The theme of rising yields is exerting pressure on the higher end of the debt market as the stock investment fever goes on – that‘s my take.No, this is not a bubble – not a parabolic one. The tech sector is gradually assuming leadership in the S&P 500 advance, accompanied by microrotations as value goes into favor and falls out of it, relatively speaking. Higher highs are coming, earnings are doing great, and valuations aren‘t an issue still.Gold, Silver and RatiosUnder pressure right as we speak ($1,815), the yellow metal‘s technical outlook hasn‘t flipped bearish. Should we get to last Thursday‘s lows, it would happen on daily indicators ready to flash a bullish divergence once prices stabilize. But for all the intense bearish talk, we haven‘t broken below the late Nov lows.For those inclined so, I am raising the arbitrage trade possibility. Long silver, short gold would be consistent with my prior assessment of the gold-silver ratio going down. Similarly to bullish gold bets, that‘s a longer-term trade, which however wouldn‘t likely take much patience to unfold and stick.A bullish chart showing that gold isn‘t following the rising yields all that closely these days. Decoupling from the Treasury yields is a positive sign for the sector, and exactly what you would expect given the (commodity) inflation and twin deficits biting.Silver continues to trade in its bullish consolidation, and unlike in gold, its short-term bullish flag formation remains intact. The path of least resistance for the white metal remains higher.Gold juniors (black line) keep their relative strength vs. the senior gold miners, and the mining sector keeps sending bullish signals, especialy when silver miners enter the picture.SummaryThe stock market tremors aren‘t over, and the signs of deterioration keep creeping in. The bull run isn‘t however in jeopardy, and there are no signals thus far pointing to an onset of a deeper correction right now.The gold bulls find it harder to defend their gains, unlike the silver ones. That‘s the short-term objective situation, regardless of expansive monetary and fiscal policies, real economy recovery, returning inflation and declining U.S. dollar. The new upleg keeps knocking on the door, and patience will be richly rewarded.

We took for many months the stands of a Permabull in Silver and still do. Our primary call for acquiring physical Silver might find some hurdles. You might not get any. When we started in March of last year at the price of US$12 to urge for acquiring physical Silver holdings, we already experienced the vast percentage difference between the spot price and the actual acquisition price of Silver. This phenomenon persists to the present day. And what to do if one can’t purchase real Silver anymore?We look at the markets primarily from the perspective of risk. As long as you do not have too dramatic pullbacks (= a homogeneous equity curve), you can always recover from a temporary setback. After all, not every investment idea might work out.If Silver’s physical acquisition should come to a halt, we find mining stock ownership to be an excellent second choice.Here is why. Leveraged positions like ETFs, futures, and options allow special restrictions made by brokers and clearinghouses tied with their firms’ positions. Large players like this can also go belly up, especially in six sigma events. In that case, it is essential to find liquidity, the ability to transfer positions from one broker/clearinghouse to another, and mostly to liquidate positions. An option they may deny you through their regulative powers.Sil, Global Silver Miners ETF, Weekly Chart, ETFs might look good, but they aren’t:SIL Global X FDS Global X Silver Miners ETF in US Dollar, weekly chart as of February 4th, 2021.  Monthly Chart of Silver, Think long term and win:Silver in US Dollar, monthly chart as of February 4th, 2021.While Silver’s smaller time frames can be intimidating at times due to their volatility and recent limelight in the news, the larger monthly time frame clearly shows the health of the trend in motion and the long term opportunity.With this bigger picture in place, mining stocks will follow the uptrend.Daily Chart, Reyna Silver Corp in Canadian Dollar, The profit maze of Silver:Reyna Silver Corp in Canadian Dollar, daily chart as of February 4th, 2021.There is a vast array of choices to participate in mining stocks. You can employ various strategies like buying the market leaders or underdogs, for example. In this field, evaluation can change quickly based on depository discoveries, soil sample quality and many other factors. Another point of consideration is the accessibility of stock depending on the country you are trading from, which exchanges you can access.The above chart depicts the stock price of our sponsor Reyna Silver which we find undervalued and very attractive as a long-term investment. Stocks in this price range have the advantage that not too much of your money is parked long term. And still percentage returns can be substantial. (Disclaimer: Please note that Reyna Silver is the sponsor of our weekly silver chartbook).In this specific case, you can see that there is excellent support at CA$0.98 from a volume analysis perspective, right below where prices trade for a low-risk entry on a long-term time horizon.The profit maze of Silver:While we hold physical Silver in the highest regard to risk-averse wealth preservation (next to Gold and Bitcoin), additional investments in mining stocks are prudent. As a stockholder, you are a part-owner of a company with the acquired rights by law. From all the choices out there to participate in the Silver boom, mining stocks seem to be the ones with the smallest risk potential.With a goal of long term investing and wealth preservation, it is essential to look at investments from a risk perspective rather than leverage.Besides, many mining stocks pay dividends. That additional income flow can be reinvested, and one participates in the 8th miracle of the world: “Compound interest.” Automatisch generierte Beschreibung">Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

As technical traders, we know the importance of following the price charts using proven trading strategies and implementing risk and position management. Here at TheTechnicalTraders.com we are stepping things up a notch by adding options to our trading.By using options, a trader can leverage, hedge positions, and generate income via selling premiums. There are basic options, strategies, and complex, and everything in between. Because of that, I have brought options trading specialist Neil Szczepanski to join our team.I will let Neil introduce himself.Hi everyone!  Neil Szczepanski here.  In case you are wondering it is pronounced “Sus’ pan ski".  Yes, I have roots in eastern European ancestry and I’m first generation.  I love options and have been trading them for many, many years. I like options because you have more ways to be profitable in your trading.  I hate putting on a position and then waiting for the market to go your way.  I want to be in control of my trades and options allows for that.  Also, trading can equal freedom. Think about this: imagine having a job that you can do from anywhere on the planet, work as much as you want, and make as much money as you want?  Imagine having that same job that has no boss breathing down your neck and you call the shots. Well, that is what options trading can be like if you have the skills or access to someone who tells you what and when to buy and sell options contracts.You control your own destiny and I have seen traders start with as little as $500.  Options are especially attractive because they can cater to the small guy with smaller accounts via leverage, allowing them to take on big positions with little capital. On the flip side, the more wealthy sophisticated traders use options to protect and hedge positions and can do more complex strategies that provide even more consistent and lucrative returns with lower risk.No matter what category of options trading you fall into, they work incredibly well, and I will teach you while providing professional trades to execute. Over my next few posts, I am going to explain some more about why trading options can be consistently profitable without having to take on huge risks. Today I am going to talk about why I love swing-trading options and the power of leverage that options provide us traders.MAKE BIG MONEY WITH SMALL ACCOUNTSAs I alluded to above, options give the average trader ways to break into the trading world because of leverage. A little capital can go a long way, and if options trading is done properly you can have significantly less risk than buying the stock outright. You can start small, make smart bets that generate returns, and continue building your account through sound risk management techniques like position sizing, etc.For example, when an underlying stock is super expensive, like Telsa for example, it can be prohibitive for the average person just starting out trading to own that stock… let alone 100 shares! Options give you the ability to control those shares for a specific period of time at a fraction of the price. Each individual options contract lets you control 100 shares of Tesla without having to buy the stock.Sign up now to receive information on the launch of the Technical Traders' options trading courses and newsletter!Let us take a look at a simple example where you want to buy TELSA with an expectation that it will go up at least 5% in value in the next month. If you wanted to buy and hold 100 shares of TESLA, then you would need to spend $80,482 to own those shares. Since all we want to do is to be able to sell the shares and lock in the profit when they go up by 5% or more.   We don’t need to own them but rather just have the right to control them within the options contract timeframe. When we hit our targets, we can sell the option contract and take profit (or take possession/delivery of the underlying shares on contract expiry).  This is called option assignment.Below is a sample of a Tesla options chain, where we can see that the price of the stock is $804.82.  Let’s say you could allocate $2,000 to this trade - you would be able to buy almost 2.5 shares of TSLA. But with $2,000, you could buy an option contract at the money that would let you have the right to buy 100 TSLA shares anytime in the next 30 days at a price of $800/share. With options, you have the ability to take your $2,000 trade and have the same controlling interest in an underlying stock as the person that just spent over $80,000 to buy the stock.So to continue with the TSLA example, let’s say on March 12th TSLA was trading for $844 (the 5% gain you were expecting).  If you bought and sold the stock, you would have made a 5% return of $4,000. If you had bought the option, and then take on the assignment (let it expire) you would have the right to buy 100 TSLA shares at $800 and then turn around and sell them for $844.  Your profit would be $4,400 (less the cost of the option contract), a little more profit than had you bought the shares outright. However, if you look at your return it is more than 225% using options!!! Options enable the small players to trade stocks that would normally be outside of their price range, and this is one of the reasons we have seen an increase in options trading popularity over the last year. In fact, options trading volume has more than doubled since the start of the pandemic.Of course, the above trade is a dream, but the reality can be quite scary. If you took the options trade and TSLA dropped below $800, then your liability starts mounting, however, the loss with owning the stock could be over $80,000 while the total loss with buying the options would be the price you paid for the option which is $1,950.  A big reversal of the stock would be catastrophic in both cases but can be much worse for the stock owner.  So it is important to make sure you trade with proper risk management and protections in place. While the adage “with great power there comes great responsibility” was popularized within a different context, I feel it applies to trading options.I know at this point you are probably thinking what the heck is he talking about and options are WAY too complicated for me.  Don’t worry, I’m going to teach and show you in a very simple and easy way how to trade options.  I am also going to provide trades that limit the max loss per trade, and reduce risk so get ready for some excitement!SWING TRADING OPTIONS IS THE PERFECT SIDE-HUSTLEI love teaching, technology, and trading. I knew early on that these were the things that would drive my career path. At the same time, I had kids to feed so I needed to supplement my income to support my growing family. I was able to achieve this through swing trading options. This allowed me to focus on my career and family while making modest yet consistent income, without having to be glued to my screen every day since swing trades last a few days or weeks.We have all seen the traders with 10 monitors looking at charts all day, making trades, and watching and waiting on every single turn in the market.  I can tell you this is NOT my idea of trading.  I prefer swing trading, where I can set up trades to enter and exit every couple of days or even weeks.  Swing trades are meant to be short duration, and they are not intra-day, so you can set up your trades and manage them when you have time to yourself.I once got advice from a great old friend that sometimes it is wise to look at the animal kingdom to learn how we can improve and live our lives.  There is a lot we can learn from the animal kingdom.  Some of the necessities we need as a human being is food shelter, social acceptance, and security.  As such, we should always have back up plans. Going back to the animal kingdom, if we look at say prairie dogs, for example, we know that they always have two holes.  One is for the main entry and exit and the other is for emergency exits.  Side hustles are just that and swing trading can be a really useful back-up/extra income plan.  It is your second hole!Swing trading is also a great way to gain entry into the world of trading.  It is like dipping your toe in the water to test it before you jump in head first.  With swing trading, you can learn all about options and other financial instruments like futures, CFD, and currencies. The best part about swing trading is it can eventually turn into a full-time job, replacing your regular job.  Now, instead of trading during your free time, you can trade when you don’t have to be at work, leaving you with even more time to enjoy life and family. This is the ultimate freedom.  That is what I have done using several strategies that generate consistent, low-risk gains for 20+ years. One of my favorite strategies that I have developed is called the C-LEAP strategy.  In this strategy, you enter and exit positions once every two weeks.  It is one of the least risky strategies I have ever developed, and I use a simple checklist to follow it. I have had past students generate tens of thousands of dollars every month using this strategy, and I have found it to be easy to learn and very consistent.As you may or may not know, I am preparing some options courses where I will teach basic options trading as well as more advanced strategies. Anyone can learn how options work but the most important thing is what strategy you use.  You also need to know how and when to use the right strategy.  I love teaching people how to trade options and live by two principles when doing so: “Trading can be simple but it is not easy” and "I want EVERYONE to win not just me and in fact, I have no desire to win if everyone else loses.". I am really excited to get to know some of you soon when I launch my LIVE options courses and get you on the path to winning trades!I will also be running The Technical Traders' new service – Options Trading Signals – where I will share my knowledge, model portfolio, a weekly trade, and opportunities report, and trade alerts with subscribers. Look for the launch of my newsletter and courses at the end of February! Make sure you sign up now to keep informed of the launch of my newsletter and courses. You can sign up at www.thetechnicaltraders.com/options-trading.In the next article Neil will keep giving you reasons to love trading options, including how you can trade options with less risk than stocks, how you can better react to volatility with options compared to stocks, and how you can attain consistent profits with lower drawdowns by trading options. So come along with me for the ride and change your life with a new skill trading options!All my best,

Weekly Chart of Silver, The trend is your friend:Silver in US Dollar, weekly chart as of February 11th, 2021.First and foremost, remove yourself from the noise. There is no need to read every news item. Turn those notifications on your phone off to not let media frequently trigger fear and uncertainty emotions within. Make a longer-term plan that excludes short-term uncertainties and, as such, escapes temporary exuberance hype. Once your mind has settled down, approach the market with a simple but sound wealth preservation strategy first and wealth creation second. It is much harder to make back what you already earned once lost.Looking at the chart above, you find silver in an uptrend. Trend-following strategies are the most common and quite powerful.  Daily Chart of Silver, Silver protection against exuberance:Silver in US Dollar, daily chart as of February 11th, 2021.Next, we find physical silver holdings a lot more attractive than any other Silver investment derivatives. Yes, the physical Silver purchase’s actual price is much higher, as indicated in this chart versus the spot price. Since this phenomenon has persisted already for nearly a year and as such is a trend, it should only be interpreted that physical Silver is in higher demand than any holdings where your rewards are paid out in a fiat currency. After all, you want to have wealth preservation against fiat currencies since money printing is also in exuberance. So do not shy away from this factor in regard to the acquisition.Weekly Chart of Silver, Price projection:Silver in US Dollar, weekly chart as of February 11th, 2021.We find there to be a fair chance that Silver spot prices might advance to the mid fifty range within this year. We would not be surprised for this trend to have a total of five legs reaching just short below three-digit numbers within the upcoming years.Silver protection against exuberanceThere are other ways to protect yourself, like Gold, for example. As much as we find Silver to be very attractive here, the most we care about is illustrating that a proactive stand with a quiet mind is an opportunity right now. Finding yourself shell shocked in hopes the overwhelm might settle and circumstances return to a familiar previous point in time is a dangerous one. We see multiple confirmations in the market that point towards a different future to unfold. Acting on a longer time frame to buy “insurance” for possible hyperinflation and other monetary threats could be a wise decision to ensure your nest egg.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|February 12th, 2021|Tags: low risk, Silver, silver bull, Silver Chartbook, technical analysis, time frame, trading principles|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

The recent rally in Marijuana and Alternative Pharma/Agriculture stocks has been impressive, to say the least.  One thing we have to remember about this sector is that it rallied to highs in 2018 and 2019, then fell out of favor for many months.  The anticipation of this new sector emerging within the US, and across many areas of the globe, prompted quite a bit of excitement after 2016 when many US states voted to legalize Marijuana. Even before this date, the alternative medicine and consumer product use related to Marijuana has been heavily speculated on by investors/traders.If we were to consider the out-of-favor phase of this sector over the past 15+ months, after the rally/hype phase which took place in 2017 and early 2018, we've seen many cannabis stocks collapse 70% to 85% or more recently.  This downward price trend likely set up a number of incredible opportunities based on expanded marketplace opportunities, enterprise valuations, and longer-term consumer/pharmaceutical use applications for CBD and other chemical extracts.  Additionally, we need to also consider what would happen if a consolidation phase were to take place in this industry – how would cannabis leaders play a role in acquiring smaller, yet important, firms with innovative technology/solutions.The MJ Alternative Harvest ETF Weekly chart below highlights the incredible decline in the cannabis sector after the August 2018 peak. MJ fell from a high of $45.40 to a low of $9.34 – representing a -86% decline.  Aurora Cannabis (ACB) peaked at 150.34 in October 2018 and recently bottomed near $3.71 – representing a massive -97.5% decline.Over the past two months or longer, this sector has started to heat up again with a moderately strong rally setting up.  Over the past 14+ days, a big upside rally initiated pushing price levels upward by +80% to +150% or more from recent lows.  Historically, when one considers the longer-term potential for growth, revenues and consolidation within this industry sector, we believe this rally may be just starting.If we were to consider a potential continued focus on the Cannabis/Alternative Agriculture supply and industry sector over the next 4+ years, we would have to take a look at the deep decline in price levels recently and the opportunity for some type of industry consolidation over the next 5 to 10+ years.  Obviously, this industry/sector is here to stay, and, much like the Alcoholic Beverage industry in the 1960s to early 2000s, we are in a very early stage of the legalization, expansion, and consolidation phase of this sector.Using these two sectors for comparison, the first question is just how big is the Cannabis/Alt marketplace compared to similar types of markets?  The Cannabis sector currently makes up about 1/10th of the total US Alcoholic beverage annual sales ($25.3B Cannabis: $252.82B Alcohol - https://www.statista.com/topics/1709/alcoholic-beverages/).  From a conservative standpoint, Cannabis consumers very likely cross-over into the Alcoholic beverage consumer market on a fairly high basis.  This means the consumer market for Cannabis is very likely 60% to 75%, or more, of the Alcoholic-beverage market.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The second question should be what additional advantages does the Cannabis/Alt sector have that differentiate it from the Alcoholic-beverage industry?  That answer lies in an unknown factor – the pharmaceutical/consumer product use that is currently in its infancy.  CBD has already shown great promise, but the long-term capabilities, use, and application of various alternative chemical compounds found in various strains of plants, mushrooms, and other organic sources are still part of the “X-Factor”.The third question in our minds becomes, how long before these unknowns/X-Factor components become a reality?  We can't attempt to put the answer into dates or predictions, but we do believe the speed at which these organic compounds will be introduced and mapped-out into potential medical-use solutions has been clearly illustrated by the speed at which the COVID-19 vaccines/medical advancements have been delivered.  These solutions only took “months” to come to market.  If the same type of capabilities were applied to the Cannabis/Alternative marketplace, and thus toward the multiple supply/innovation companies within this sector, a massive boost of growth, innovation, and consolidation within this sector over time. Let's take a look at some current statistics & data below.Marijuana Tax Revenues by state appear to be strong and growing.  One thing to consider about this Tax data is that a relatively large portion of actual sales are still going unreported (as illicit transactions).Source: https://loudcloudhealth.com/resources/marijuana-tax-revenue-by-state-map/Legalization & Acceptance of Marijuana within the US has now reached almost every state – with only six states still showing Marijuana is fully illegal.  All other states have adopted Marijuana use in some form over the past 5+ years.Source: https://disa.com/map-of-marijuana-legality-by-stateThe US Cannabis Consumer Market is expected to increase by more than 15 to 20% in 2021 after more than doubling in 2020.  From 2018 to 2021, the total consumer market was expected to increase by more than 350%.  By the end of 2022, that ratio increases to levels beyond +450% compared to the 2018 levels.Source: https://mattermark.com/vc-investment-sparks-high-times-american-cannabis-industry/Obviously, the deep price decline in the Marijuana sector, which recently ended, did not properly reflect the market capabilities and expectations for future growth and earnings.  We believe this sector could become one of the hottest sectors for growth over the next 2+ years and it may prompt a massive consolidation phase within this industry which will create potential behemoth conglomerate Cannabis firms – very much like the Alcoholic Beverage industry.I am able to find these trends, like MJ, by using my Best Asset Now strategy. My subscribers and I are loving the strategy as we closed our MJ trade last week after taking profits at the 7,%, 15%, 20%, and 48% levels in two weeks! This is how we make consistent profits from the BAN strategy while still getting that awesome, excitable feeling from being in an explosive trade!!Don’t miss the opportunities in the broad market sectors over the next 6+ months, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Learn how the BAN strategy can help you spot the best trade setups because staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.In the second part of this article, we'll explore various Marijuana sector charts showing where traders may find real opportunities for profits if the current rally phase continues.  This exciting industry sector may become one of the hottest sectors for traders and may prompt a massive consolidation phase within this industry over the next 5+ years.  Get ready for some big trends and opportunities.

Slow start to the week with China and US markets closedEURUSD Recovers From A Three-Day Low The euro currency touched a three-day low on Friday at 1.2080 before recovering. Price action is subdued for the past three sessions with a lower high currently forming.This comes after price slipped to a three-month low at 1.1951 on February 5th. The downside bias is starting to build up.The common currency will need to rise above the recent swing high of 1.2187 in order for the upside bias to hold.Failure to do so could potentially open the way for further declines, especially if the swing low of 1.1951 gives way.For the moment, the support area near 1.2050 will be critical to the downside. The Stochastics oscillator is moving up and could signal another test to the resistance area near 1.2144 – 1.2177.The British pound sterling made a sharp recovery with price action on Friday posting a strong rebound.The gains put the GBPUSD back near the previous highs at 1.3866. But with the Stochastics oscillator signaling a lower high, we could see a pullback.The support level near 1.3759 remains in scope to the downside. As long as the cable holds gains above this level, there is room for further gains.But a close below this level could potentially see a larger correction taking place.For the moment, the uptrend remains intact with price making consistently higher lows.Oil Advances To A New Eleven-Month High WTI Crude oil prices resumed the bullish momentum following three days of subdued trading. Prices settled at 59.55 on Friday, marking a new 11-month high.The rebound comes after oil prices briefly fell to the support area near 57.35. This potentially cements the 57.35 level as a strong support area in case of any downside.Despite the gains, oil prices are now nearing a multi-year resistance area between the 65.5 and 61.5 levels.Price action has on previous occasions failed to break past this level.Therefore, unless there is a strong momentum led breakout, we could see price action consolidating in this resistance area.Gold Prices Find Support Near 1817.89 The declines in the precious metal stalled after prices once again tested the 1817.89 level of support. A retest of this level, alongside the Stochastics oscillator attempting to move out from the oversold levels, could keep prices to the upside for the moment.This will mean that gold prices will continue to maintain a sideways range between 1850 and 1817.89 levels in the near term.On the daily charts, gold prices closed flat following the losses from the previous day.Therefore, if price action turns bearish today, we could expect to see the previous lows at 1784.81 from 4th February coming under test once again.To the upside, price action needs to post a strong close above the 10th of February highs of 1855.30 for any signs of further gains.

The window of opportunity for the stock bears is slowly but surely closing down as Friday‘s gentle intraday peek higher turned into a buying spree before the closing bell. The sentiment readings and put/call ratio are at the greed, euphoric and compacent end of the spectrum again. I asked on Friday:(…) How long can it last, and what shape the upcoming correction would have? Right now, the warning signs are mounting, yet the bears shouldn‘t put all their eggs into the correction basket really, for it shapes to be a shallow one – one in time, rather than in price.Today, I‘ll say that waiting for a correction is like waiting for Godot. Trust me, I have come to experience quite some absurd and Kafkaesque drama not too long ago. What an understatement.One week ago, I called the dollar as making a local top, and look where we are in the process. Coupled with the steepening pace of rising long-dated Treasury yields, that‘s a great environment for financials (XLF ETF) as they benefit from the widening yield curve.Gold remains a drag on the precious metals performance, with silver and platinum flying. The miners‘ outlook and internal dynamics between various mining indices, provides a much needed proof to those short on patience. Little wonder, after 5+ months of downside correction whose target I called on Aug 07 in the article S&P 500 Bulls Meet Non-Farm Payrolls. Little wonder given the monstrous pace of new money creation beating quite a few prior interventions combined.Yet, the precious metals complex is coming back to life as the economic recovery goes on, and will get new stimulus fuel. Commodity prices are rising steeply across the board, yet inflation as measured by CPI, will have to wait for the job market to start feeling the heat, which it obviously doesn‘t in the current pace of job creation and low participation rate. Until labor gets more powerful in the price discovery mechanism (through market-based dynamics!), the raging inflationary fire will be under control, manifesting only in (financial) asset price inflation. That‘s precisely what you would expect when new money is no longer sitting on banks‘ balance sheets, but flowing into the economy. Again quoting my Friday‘s words:(…) One more note concerning the markets – in our print-and-spend-happy world, where the give or take $1.9T stimulus will sooner or later come in one way or another, we better prepare on repricing downside risk in the precious metals, and also better not to fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this just doesn‘t qualify yet in my view. All those serious correction calls have to wait – in tech and elsewhere, for we‘re going higher overall – like it or not.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsThe weekly S&P 500 chart is still one of strength, without a top in sight. And the lower volume, I don‘t view as concerning at all.After a three day sideways consolidation, stock bulls forced a close higher on Friday. Low volume, but still higher prices. The bears missed an opportunity to act, having hesitated for quite a few days. Not that the (big picture) path of least resistance weren‘t higher before that, though.The market breadth indicators got a boost on Friday, but it‘s especially the new highs new lows that have a way to go. One would expect a bigger uptick given Friday‘s price advance, but the overall message is still one of cautious but well grounded optimism.Credit Markets, Treasuries and DollarThe high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio performance is lining up nicely with the S&P 500 one, and definitely isn‘t flashing a warning sign for the days to come.Long-term Treasuries are declining at a faster pace than has been the case in late 2020, which is (not immediately right now, but give it time and it‘ll turn out to be) concerning. Thus far though, the money flows are positive for the stock (and other risk on) markets as the liquidity tide keeps hitting the tape.Who suffers? The dollar. No, it‘s not breaking higher (retracing breakout before a run higher – no) above the 50-day moving average or any way you draw a declining resistance line on higher time frames. The greenback is getting ready for another powerful downleg.Gold and SilverGold bulls have repelled another selling wave, which was however not the strongest one. The fact there was one in the first place even, is more (short-term) concerning for the gold bulls. But please remember that it was first gold that got it right in jumping higher on the unprecedented money printing spree as we entered spring 2020, followed by copper, base metals, agricultural commodities, and also oil now (remember my recent bullish calls for over $80 per barrel in less than 2 years). Gold keeps catching breath, frustrating the bulls who „know“ it can only go higher, but its spark isn‘t there at the moment. A perfect example is Monday‘s session thus far – spot gold 0.25% down, spot silver 1.25% up. It‘s been only on Friday when I touted the gold-silver spread trade idea as not having exhausted its potential yet, not by a long shot:(…) For those inclined so, I am raising the arbitrage trade possibility. Long silver, short gold would be consistent with my prior assessment of the gold-silver ratio going down. Similarly to bullish gold bets, that‘s a longer-term trade, which however wouldn‘t likely take much patience to unfold and stick.Silver keeps acting in a bullish way, tracking commodities ($CRB) performance much better than gold does at the moment. While both are a bullish play with the many factors arrayed behind their upcoming rise, it‘s silver that will reap the greatest rewards – today and in the days and weeks ahead. Gold and Silver MinersBack to the beaten down and underperforming gold. See that the yellow metal still isn‘t following the rising yields all that closely these days. Decoupling from the Treasury yields bodes well for precious metals universally, and it‘s precisely what you would expect given the (commodity) inflation, twin deficits biting, and the dollar balancing on the brink.The miners examination also proves no change in the underlying bullish dynamic that is largely playing out below the surface. We‘re seeing the continued outperformance of junior gold miners vs. the seniors, and also the great burst of life in the silver miners – these are outperforming ever more visibly the rest of the mining companies.This is a long awaited chart to flip bullish. Thus far, we have had one recent bullish divergence only (the GDX refusal to break to new lows when gold broke below its Jan lows) – once gold miners start leading the yellow metal, the sentiment in the precious metals community would get different compared to today really.SummaryThe deterioration in stock market got postponed with the latter half of Friday bringing in fresh buying pressure. Would the bears appear, at least to rock the boat a little? They had a good chance all the prior week, but didn‘t jump at the opportunity. Their window is closing, slowly but surely. The stock bull run is on, and there are no signals thus far pointing to an onset of a deeper correction soon.The gold bulls continue lagging behind their silver counterparts, predictably. That‘s the objective assessment regardless of unprecendented monetary and fiscal policies, unfolding real economy recovery, inflation cascading through the system, and the dollar struggling to keep its head above water. The new upleg keeps knocking on the door, and patience will be richly rewarded (unless you took me up on the gold-silver arbitrage trade, and are popping the champagne already).

EURUSD Subdued Amid Thin TradingThe euro was trading subdued, with price action once again attempting to retest the resistance level near 1.2144.Price action in the EURUSD is somewhat flat with the US markets closed on account of the president’s day holiday today.The short term trend appears to be flat for the moment unless the common currency is able to break out above the resistance area between 1.2144 and 1.2177.Meanwhile, the stochastics oscillator is posting a lower high. This could suggest a short-term correction to the downside.The support level near 1.2050 is likely to remain the downside target for the moment.GBPUSD Surges Past 1.3900The British pound Sterling continues to surge ahead with price action rising above 1.3900.So far, GBPUSD has been posting gains for nearly five consecutive weeks.A continuation to the upside could see price action rising towards the 1.4400 level. This would mark the highest level since mid-2016.But the current pace of gains has seen no meaningful pullback just as yet. Therefore, the lack of any support to the downside is likely to open the downside risk.The recent swing high near 1.3867 is likely to act as support. But if the GBPUSD loses this handle, we expect a correction down to 1.3759 next.Oil Prices Rally On Cold WeatherOil prices opened on a bullish note in the Asian trading session rising to a new 13 month high.The gains came as the cold winter has fueled demand for the fossil fuel.Price rallied to a new high of 60.75 before giving back some of the intraday gains. However, towards the late European trading session, oil prices were seen giving back some of these gains.If oil prices continue to pull back, then we might get to see prices covering the gap from Monday’s open. To the upside, the next main resistance level is near 61.35.The current rally in the oil prices also comes as the US dollar has been trading weaker over the past few weeks.Gold Price Confined To Friday’s RangeThe precious metal is trading subdued with price action firmly stuck within Friday’s range.With both the Asian and US markets closed, trading in the precious metal is slow. Price action is back near the support level of 1817 region.For the moment, the support level seems to be holding up which could provide a short-term boost to the upside. The resistance level near 1850.00 will likely once again act as resistance keeping a lid on any further gains.However, watch the stochastics oscillator which is likely to signal a shift in the momentum.In the event that gold prices lose the 1817 support, we could expect price action toward the 4th February lows at 1784.79.

It is easier said than done since we like seeing the confirmation. We enjoy seeing prices go up and then would be willing to commit to buying. Unfortunately, it is too late to participate at that point since the risk is increasing the more prices advance. The result is that many novices trade breakout trades. This is one of the most apparent form of market participation. Since the whole world can identify such a trade, it is a low probability technique.A real edge is created by conditioning oneself to ask the right questions at the right time. When prices retrace within a general uptrend having a clear rule set of participation is very useful. When prices go up, using a supporting exit strategy like our quad exit to take partial exits and generally asking oneself where to get out is the right behavior.The following three charts describe the essential scenarios we see for Bitcoin to progress further.BTC-USD, Weekly Chart, Minor dip with high risk:BTC-USDT, weekly chart as of February 15th, 2021.As much as a minor retracement would point for the most aggressive trend direction from a risk perspective regarding mid and long-term market participation, we see no low-risk entries to take part in. In this case, we prefer the price to penetrate 50k successfully and would like to enter on a bounce of this significant number. BTC-USDT, Weekly Chart, Consolidation zone below US$50,000:BTC-USDT, weekly chart as of February 15th, 2021.The next way prices could unfold is consolidation below the larger 50k marker. We find entries on the low end of the trend rage attractive as participation by taking partial profits on the range box’s upper rim and possible continuation of the remaining position size to all time new highs.BTC-USDT, Weekly Chart, Bitcoin-be a contrarian:BTC-USDT, weekly chart as of February 15th, 2021.The real contrarian opportunity would lay in a larger retracement to fade for the well-prepared trader. Bitcoins’ nature has been to show substantial retracements. A move like this would evoke emotions of doubt. Contrarian to these emotions, the larger the decline, the more aggressive an entry in position size should be.All three scenarios require a well-prepped plan. Instead of following the market’s evolution with emotional observation, focus on the prepared battle plan and engage only if your preconceived ideas are matched by price behavior.Bitcoin, be a contrarianIf you follow prey to your intuitive, emotional response, you will find yourself in the urge of wanting to get into the market once prices show a clear direction. This is also precisely at that spot where “fear of missing out” comes into play, another emotional trigger. Conscious efforts have to be made to overwrite these non-quality questions from a market participation perspective. Write notes into your charts and rehearse quality-question-timing for market participation until they become second nature. A low-risk entry methodology starts with these quality questions, and doing so within a trade, is one of the best performing trading methods out there. Be a contrarian to market direction and be a contrarian to your emotions.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|February 15th, 2021|Tags: Bitcoin, Bitcoin mining, crypto analysis, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

Yesterday‘s thin volume session didn‘t bring any material changes as the window of opportunity for the stock bears to act, is slowly but surely closing down. Friday‘s intraday move brought increasingly higher prices, and Monday‘s trading extended gains even more. Euphoric, complacent greed as evidenced by the sentiment readings and put/call ratios, is on.I asked on Friday:(…) How long can it last, and what shape the upcoming correction would have? Right now, the warning signs are mounting, yet the bears shouldn‘t put all their eggs into the correction basket really, for it shapes to be a shallow one – one in time, rather than in price.Both on Monday and today, I‘ll say that waiting for a correction is like waiting for Godot. Right from the horse‘s mouth as my personal experience with quite some absurd and Kafkaesque drama got richer recently.The dollar keeps topping out, which I called it to do a week ago – and its losses have been mounting since. Long-dated Treasury yields are rising in tandem, which is a great environment for financials (XLF ETF) and emerging markets (EEM ETF). The former benefit from the widening yield curve, the latter from plain devaluation.Gold performance is still short-term disappointing, and silver and platinum are leading. But it‘s the miners and the moves between various mining indices, that work to soothe the bulls‘ impatience. Understandable as we are in 5+ months of downside correction whose target I called on Aug 07 in the article S&P 500 Bulls Meet Non-Farm Payrolls, witnessing record pace of new money creation.The ongoing economic recovery will get new stimulus support, and that will work to broaden the precious metals advance. Commodity prices are universally rising, and over time, inflation as measured by CPI, will do so too. But not until the current pace of job creation picks up and participation rate turns – we‘re far from that moment. Until then, inflation will be apparent only in (financial) asset prices, which is in line with new money no longer sitting on banks‘ balance sheets, but flowing into the real economy. Again quoting my Friday‘s words:(…) One more note concerning the markets – in our print-and-spend-happy world, where the give or take $1.9T stimulus will sooner or later come in one way or another, we better prepare on repricing downside risk in the precious metals, and also better not to fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this just doesn‘t qualify yet in my view. All those serious correction calls have to wait – in tech and elsewhere, for we‘re going higher overall – like it or not.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsThe bulls had an opportunity to act for quite a few days in a row, yet missed it. Their inaction confirms that the path of least resistance for stocks is to still rise.The market breadth indicators have improved on Friday, but especially the new highs new lows has a way to go. It could have ticked upwards more given Friday‘s price advance, but didn‘t. The put/call ratio has moved upwards (see chart below), but the overall message is still one of cautious yet reasonable optimism – not enough to trigger the sizable correction quite some participants are constantly awaiting.Credit Markets, Treasuries and DollarThe high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio performance isn‘t out of whack with the S&P 500, but the investment grade corporate bonds to longer dated Treasuries (LQD:IEI) are not confirming exactly. Before the corona crash, the high yield ones were leading the investment grade ones for countless quarters. From the Mar 2020 bottom, the investment grade ones were in the pool position. And since the end of Dec 2020, the high yield ones are leading again, but investment grade ones aren't going up anymore, but down the way long-term Treasuries do. One more sign of the euphoric stage in stocks we're in.Long-term Treasuries are the chart to watch for the market to throw a fit – or not. They‘re declining at a faster pace than has been the case in late 2020, which can bring about trouble - not immediately right away, but over time it can turn out so. The dynamic of money moving into the stock market is thus far still positive as the many risk on assets are gaining on the fast pace of new money creation. The worry about a sudden, sharp reversal is misplaced for now.The dollar is on the receiving end – there is no breakout verification before a run higher in progress – no. Neither above the 50-day moving average, nor any way you draw a declining resistance line on higher time frames. The greenback is about to test and break below its 2021 lows. Solidly below.Gold and SilverGold bulls stood their ground on Friday, yet their yesterday‘s and today‘s performance is rather weak. Not disastrously so, but still indicative of the headwinds gold bulls face. Gold‘s spark isn‘t there at the moment. Putting it into context, please remember that it was first gold that jumped in the unrivalled money printing era arrival in spring 2020, followed by copper, base metals, agricultural commodities, and also oil now (remember my recent bullish calls for over $80 per barrel in less than 2 years). Silver price action is the bullish one, in line with commodities ($CRB) performance being much stronger now. Silver is definitely better positioned to benefit from the upcoming precious metals rise – today and in the days and weeks ahead. Gold and Silver MinersThe heat gold is taking from rising Treasury yields, is also progressively weaker. The decoupling from rising nominal (real) yields bodes well for precious metals universally, and it‘s precisely what you would expect given the (commodity) inflation, twin deficits, and the dollar on the brink.Gold to all corporate bonds chart reflects the current dillydallying nicely. Gold isn‘t breaking down into a bearish downtrend. The miners examination also proves no change in the underlying bullish dynamic playing out below the surface. Junior gold miners are oputperforming. the seniors, and there is also the great burst of life in the silver miners – these are outperforming ever more visibly the rest of the crowd.Once this chart flips bullish, we have the new upleg clearly visible. Thus far, we have had one recent bullish divergence only (the GDX refusal to break to new lows when gold broke below its Jan lows) – once gold miners start leading the yellow metal, the sentiment in the precious metals community would get different compared to today really.SummaryThe deterioration in stocks got postponed as both Friday and Monday brought new buyers into the market. Would the bears appear, at least to rock the boat a little? I stand by my call that they had a good chance all the prior week, but didn‘t jump at the opportunity – their window is closing, slowly but surely. The stock bull run is on, and there are no signals thus far pointing to an onset of a deeper correction soon.The gold bulls continue lagging behind their silver counterparts, predictably, with both under pressure in Tuesday‘s premarket. Coupled with the miners‘ signals, and unprecendented monetary and fiscal stimulus, unfolding real economy recovery, inflation making its way through the system, and the dollar struggling to keep its head above water, the new PMs upleg is a question of time.

Gold is dodging bullets, as it comes increasingly under fire from rising U.S. interest rates and a USD that is poised to surge.Catching unsuspecting traders in yet another bull trap , gold’s early-week strength quickly faded. And with investors unwilling to vouch for the yellow metal for more than a few days, the rush-to-exit mentality highlights a short-term vexation that’s unlikely to subside.Please see below:Figure 1Destined for devaluation after hitting its triangle-vertex-based reversal point (which I warned about previously ), the yellow metal is struggling to climb the ever-growing wall of worry.Mirroring what we saw at the beginning of the New Year, gold’s triangle-vertex-based reversal point remains a reliable indicator of trend exhaustion.And when you add the bearish cocktail of rising U.S. interest rates and a potential USD Index surge, $1,700 remains the initial downside target , with $1,500 to even ~$1,350 still possibilities under the right curcumstances.Please see below:Figure 2 - Gold Continuous Contract Overview and Slow Stochastic Oscillator Chart ComparisonTo explain the rationale, I wrote previously:Back in November, gold’s second decline (second half of the month) was a bit bigger than the initial (first half of the month) slide that was much sharper. The January performance is very similar so far, with the difference being that this month, the initial decline that we saw in the early part of the month was bigger.This means that if the shape of the price moves continues to be similar, the next short-term move lower could be bigger than what we saw so far in January and bigger than the decline that we saw in the second half of November. This is yet another factor that points to the proximity of $1,700 as the next downside target.In addition, as a steepening U.S. yield curve enters the equation, I wrote on Jan. 27 that the bottom, and subsequent move higher, in U.S. Treasury yields coincided with a USDX rally 80% of the time since 2003.Figure 3 - Source: Daniel LacalleAnd while the USDX continues to fight historical precedent, on Feb. 12, the U.S. 30-Year Treasury yield closed at its highest level in nearly a year. As such, the move should add wind to the USDX’s sails in the coming weeks.Please see below:Figure 4In conclusion, gold is under fire from all angles and dodging bullets has become a near impossible task. With the USD Index likely to bounce off its declining resistance line (now support), a bottom in the greenback could be imminent. Also ominous, a steepening U.S. yield curve signals that the yellow metals’ best days are likely in the rearview. However, as the situation evolves and gold eventually demonstrates continued strength versus the USD Index, its long-term uptrend will resume once again.Before moving on, I want to reiterate my previous comments and explain why $1,700 remains my initial target:One of the reasons is the 61.8% Fibonacci retracement based on the recent 2020 rally, and the other is the 1.618 extension of the initial decline. However, there are also more long-term-oriented indications that gold is about to move to $1,700 or lower.(…) gold recently failed to move above its previous long-term (2011) high. Since history tends to repeat itself, it’s only natural to expect gold to behave as it did during its previous attempt to break above its major long-term high.And the only similar case is from late 1978 when gold rallied above the previous 1974 high. Let’s take a look at the chart below for details (courtesy of chartsrus.com)Figure 5 - Gold rallying in 1978, past its 1974 highAs you can see above, in late 1978, gold declined severely right after it moved above the late-1974 high. This time, gold invalidated the breakout, which makes the subsequent decline more likely. And how far did gold decline back in 1978? It declined by about $50, which is about 20% of the starting price. If gold was to drop 20% from its 2020 high, it would slide from $2,089 to about $1,671 .Figure 6 - Relative Strength Index (RSI), GOLD, and Moving Average Convergence Divergence (MACD) ComparisonIf you analyze the red arrow in the lower part of the above chart (the weekly MACD sell signal), today’s pattern is similar not only to what we saw in 2011, but also to what we witnessed in 2008. Thus, if similar events unfold – with the S&P 500 falling and the USD Index rising (both seem likely for the following months, even if these moves don’t start right away) – the yellow metal could plunge to below $1,350 or so. The green dashed line shows what would happen gold price, if it was not decline as much as it did in 2008.However, as of right now, my initial target is $1,700, with $1,500 likely over the medium-term. But as mentioned, if the S&P 500 and the USD Index add ripples to the bearish current, $1,400 (or even ~$1,350) could occur amid the perfect storm. ~$1,500 still remains the most likely downside target for the final bottom, though.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

A couple of days ago Neil, my options trading specialist and I posted an article how you can benefit and profit by trading some very easy to implement strategies we teach. If you missed the first half of this article entitled "5 Reasons Why People Prefer To Trade Options Over Stocks" then click on the title to revisit it.  In this final part, back to finish off telling you why I love to trade options and will walk through how adjustments and risk management of options can help give you better control of your trades and profits. Hopefully everyone enjoys the information and we look forward to helping everyone win with options trading!REDUCE RISKEveryone has heard a story about someone who mischaracterized or misunderstood their options trade, then having their account blow up when the underlying stock goes the wrong way. This happened recently with a Robinhood trader who woke up one morning to see his account at -$730,165. In this tragic event the kid took his life because he thought he had lost $730,165 and couldn't reach his brokerage to understand his account. We learned later that the negative balance did not represent uncollateralized indebtedness at all, but rather his temporary balance until the stocks underlying his assigned options actually settled into his account.  In short it was a delay in processing of the options contracts in his account, and not the actual trade that went awry.  This is why it is very important that in this game of trading you get the proper training so you understand your risk. The risk is real. So how can options be less risky? Simple: because you can define your risk right at the outset of the trade. Further, you can adjust your risk/reward ratio 24/7, and not just during market hours with a stop loss like stocks. In very volatile markets risk management becomes even more important and your exposure to unlimited risk can destroy your account very quickly. Think back to the tech bubble in 2002, or the subprime mortgage crisis, and don't forget the consequneces of the great recession.  Or even the Covid-19 pandemic of 2020!  The most successful traders are good at maximizing their winners, but more importantly, they are even better at minimizing their losses on losing trades. This includes making sure you prepare for black swan events. One of the questions I always get is how do you control and/or manage your risk with options?  In the following diagram, you can see that if you use options around your existing positions you can cap your max loss at about $7.  To achieve this, the trade-off is to cap your upside at about $13.  In this scenario, we own stock the orange line represents this. Let’s assume the price is $110 so the profit is about $3.  We sell a call to pay for a put that we buy.  So the max profit in the line created by selling the call and the max loss is defined by the buying of the put.  This is called collaring your stock position using stock options.  As I mentioned this trade is on 24/7 and not just during market hours like a stop for stocks.FLEXIBILITY TO REACT TO MARKET VOLATILITYYou don’t need to always be right on direction. With options, you can put on a position and adjust and move with the market minimizing your losses or turning a losing trade into a winning trade. You can sell premium with options and make money even when the underline stock goes nowhere. You get paid for the time by selling the rights to the stock that you can either own or not own. With stocks it is more limiting, you can either buy more or sell and take your loss if the price goes against you, that’s it.Sign up now to receive information on the launch of the Technical Traders’ options trading courses and newsletter!If you are trading options you have way more flexibility than stock.  With stock you can buy, sell short and buy more.  I hate adding to a losing position and quite frankly not sure why anyone would do that.  With options you can roll out of a leg in your option spread and adjust to where the market is going.  Think of this as steering a boat through a series of rocks rather than just running them over and damaging the ship.  You control where you want to go and avoid the disasters.  You can also turn losing positions into winning ones by adjusting.  With my new Options Trading Signals newsletter ("OTS") we will go through these steps and show how you can create winning positions or minimize your losses in ways that is simply not possible with stocks.CONSISTENT RETURNS WITH less severe DRAWDOWNSConsistent returns and less dramatic drawdowns can be achieved with an options strategy rather than a just buying stock strategy. I usually only allocate 50% or less of my overall account into options positions yet achieve better returns than if I were to invest 100% into stocks. I also don’t have nearly the same levels of drawdowns, or the sudden trend reversal risk, that one would take by being 100% in stocks. Holding cash also allows me to capitalize on opportunities like if a black swan event. When such an event does eventually hit, I have cash available to buy in while all stocks are on sale. So, I can still get a better return, with fewer drawdowns, and with cash to be ready to jump on buying opportunities. One can get all of the best of all worlds!I am really excited about sharing my knowledge and strategies with you. I will be writing another article this week that walks you through my simple strategy to consistently generate profits from the market. I will be walking through a few trades with you so make sure you don’t miss out.Selling options is the best way to get consistent returns that are undeniable and consistent.  Nothing in the market is guaranteed except the premium you sell on an options contract.  The best part about selling premium is the stock can go against you, with you, or do nothing and you can profit on any of those scenarios.  Today's current market conditions are RIPE for selling premium since there are many new options traders piling into the market, buying options, and inflating the premium on options.  This is a supply and demand game and because the demand is high and the supply is low this is creating a premium price skew to the upside.  This is clearly an edge we can take advantage of but in order to do so, you must understand how the market works and more importantly how options work.  My new OTS service will detail our weekly trades and walk you through how to take advantage of this edge.  To further my point that options can simply provide better returns, let us look at the below Silver chart to see why buy and hold is a tough game to play. If you entered Silver in August 2020 at roughly $25, then you would have zero gains 7 months later if you had bought the stock. However had you sold a Put Option at $24 for 7 months it would have expired worthless and paid you the entire premium that you sold it for.  Currently, an option contract 7 months out on Silver is trading at $296 at the time of this article being written, so, this trade would have netted a $256 gain even though the underlying SLV stock went absolutely nowhere. If you want to learn more about options, then join me in March when I will start teaching basic options trading, as well as offering courses on more advanced strategies. Anyone can learn how options work but the most important thing is what strategy you use.  You also need to know how and when to use the right strategy.  I love teaching people how to trade options and live by two principles when doing so: “Trading can be simple but it is not easy” and “I want EVERYONE to win not just me and in fact, I have no desire to win if everyone else loses.”. I am really excited to get to know some of you soon when I launch my LIVE options courses and get you on the path to winning trades!I will also be running The Technical Traders’ new service – Options Trading Signals – where I will share my knowledge, model portfolio, a weekly trade, and opportunities report, and trade alerts with subscribers. Look for the launch of my newsletter and courses at the end of February! Make sure you sign up to keep informed of the launch of my newsletter and courses. You can sign up now at www.thetechnicaltraders.com/options-trading.All our best,Chris Vermeulenand Neil Szczepanskiwww.TheTechnicalTraders.com

Euro Gives Back Intraday GainsThe euro currency rose to a four-week high after GDP numbers came out better than forecast.But price action soon gave back the gains as the resistance level proved too hard to breach.Price action briefly rose past 1.2144 before retreating from the resistance level between 1.2177 and 1.2144. For the moment, the EURUSD remains well above the 12th February lows.However, a close below this level could see further short term declines. The main support level at 1.2050 remains the downside target for the moment.GBPUSD Slips But Upside Remains IntactThe British pound sterling continues to post steady gains. Price action was seen trading a bit weaker after testing highs of 1.3951 on Tuesday.But a quick recovery from the intraday lows is keeping the upside bias intact.Further gains could likely see the cable testing the 1.4000 round number level in the near term.To the downside, the current intraday lows near 1.3869 and the highs from 10th February at 1.3866 form the initial support.Only a strong close below this level will open the downside toward the 12th Feb lows at 1.3775.Crude Oil Retreats From 60.92WTI crude oil prices are giving back the gains after prices touched a new 13-month high earlier this week.The declines come after prices fell to fill the gap from last Friday at 59.55. With most of the intraday declines already pulling back, the upside could resume.The fundamentals remain bullish for oil markets especially with the cold winter in the US. This could see oil prices likely to test the 61.00 level next to the upside.Any corrections could likely stall near the 57.35 level for the moment. Establishing support here could also further strengthen the potential for more gains.Gold Slips Below 1817 Technical SupportThe precious metal lost the 1817.79 technical support on Tuesday.However, after prices fell to intraday lows of 1789.37, there was a quick recovery.The current pullback could see gold prices retesting the 1817.79 level once again. The bias remains mixed as we could see some consolidation taking place near this level.Only a strong close below 4th Feb lows of 1784 will see further downside.The next key target for gold is near the 1764.22 level of support. To the upside, gains could be limited to the 1850 handle once again.

The market largely continued last week’s mixed moves, with the S&P and Nasdaq mildly retreating from record highs and the Dow eking out another record close.The sentiment remains mostly rosy thanks to earnings that continue to impress, plummeting virus numbers worldwide, indicators that the economic recovery is gaining steam, and imminent stimulus.But we’re not out of the woods yet, and I still worry about complacency and valuations.But now, you can add one more concern to the list- rising bond yields.On Tuesday (Feb. 16), the 10-year Treasury yield jumped 9 basis points to top 1.30% for the first time since February 2020. The 30-year rate also hit its highest level in a year.Why is this concerning?Rising interest rates=less attractive stocks.Sure, the banks benefit. But what do you think this means for growth sectors such as tech that have benefited from low-rates?You couple that with the fact that according to the Buffet Indicator (Total US stock market valuation/GDP), the market could be 228% overvalued, and tech stocks may be at valuations not seen since the dotcom bubble? Genuine concerns.A rebound in rates could also put a dent in the economic recovery if both companies and consumers find it increasingly expensive to borrow.While I don’t foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of Q1 could happen.Bank of America also echoed this statement and said last week that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and ‘as good as it gets’ earnings revisions.”Corrections are healthy and normal market behavior, and we are long overdue for one. They are also way more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. The Streaky S&P Is Back at a Record Figure 1- S&P 500 Large Cap Index $SPXThe S&P continues to trade as a streaky index. It seemingly rips off multiple-day winning streaks or losing streaks weekly.Before Tuesday’s (Feb. 16) “decline” (if you can call it that), here’s how the S&P has traded in February. It kicked off the month by ripping off a streak of gains in 6 of 7 days. It then promptly went on a 3-day losing streak, followed by a two-day winning streak and more record closes.Then it declined a 0.06% to kick off the President’s Day shortened trading week.More than 80% of S&P stocks that have reported earnings have beaten estimates, which is quite impressive. Yes, the forward P/E ratio is historically high. However, this P/E ratio has coincided with growing earnings.With the index also up 5.9% month-to-date and a healthy outlook for the second half of the year, we could have some more room to run.While the S&P’s RSI is still hovering around overbought levels, it’s remained stable at a HOLD level, mainly reflecting its muted moves over the last week and change.A short-term correction could inevitably occur by the end of Q1 2021, but for now, I am sticking with the S&P as a HOLD.For an ETF that attempts to directly correlate with the performance of the S&P, the SPDR S&P ETF (SPY) is a good option.For more of my thoughts on the market, such as red-hot small-caps and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

The stock bears finally showed they aren‘t an extinct species – merely a seriously endangered one. Yesterday‘s close though gives them a chance to try again today, but they should be tame in expectations. While there is some chart deterioration, it‘s not nearly enough to help fuel a full on bearish onslaught in the S&P 500. There is no serious correction starting now, nothing to really take down stocks seriously for the time being.The Fed remains active, and monetary policy hasn‘t lost its charm (effect) just yet. Commodities and asset price inflation has been in high gear for quite some time, yet it‘s not a raging problem for the Main Street as evidenced by the CPI. Food price inflation, substitution and hedonistic adjustments in its calculation, are a different cup of tea, but CPI isn‘t biting yet.Meanwhile, the real economy recovery goes on (just check yesterday‘s Empire State Manufacturing figures for proof), even without the $1.9T stimulus and infrastructure plans. Once we see signs of strain in the job market (higher participation rate, hourly earnings and hours worked), then the real, palpable inflation story can unfold. But we‘re talking 2022, or even 2023 to get there – and the Fed will just let it overshoot to compensate for the current and prior era.Meanwhile, the wave of new money creation (we‘re almost at double the early 2020 Fed‘s balance sheet value - $4T give or take then vs. almost $7.5T now – and that‘s before the multiplier in commercial banks loan creation kicks in) keeps hitting the markets, going into the real economy, predictably lifting many boats. It‘s my view that we have to (and will) experience a stock market bubble accompanied by the precious metals and commodities one – to a degree, simultaneously, for the stock market is likely to get under pressure first. Again, I am talking the big picture here – not the coming weeks.Meanwhile, the intense talk of S&P 500 correction any-day-week-now is on, just as outrageous gold, silver and miners‘ drop projections. Let‘s examine the bear market is gold – some say that the late 2015 marked bottom, I‘m of the view that the 2016 steep rally was a first proof of turning tide. But the Fed got serious about tightening (raising rates, shrinking its balance sheet), and gold reached the final bottom in Aug 2018. Seeing through the hawks vs. dove fights at the Fed in the latter half of 2018 (December was a notable moment when Powell refused to the markets‘ bidding, remained hawkish in the face of heavy, indiscriminate selling across the board – before relenting).Since then, gold was slowly but surely gathering steam, and speculation in stocks was on. The repo crisis of autumn 2019 didn‘t have a dampening effect either – the Fed was solidly back to accomodative back then. These have all happened well before corona hit – and it wasn‘t able to push gold down really much. The recovery from the forced selling, this deflationary episode (which I had notably declared back in summer 2020 to be a one-off, not to be repeated event), was swift. Commodities have clearly joined, and the picture of various asset classes taking the baton as inflation is cascading through the system, is very clear.Quoting from my yesterday‘s analysis:(…) The dollar keeps topping out, which I called it to do a week ago – and its losses have been mounting since. Long-dated Treasury yields are rising in tandem, which is a great environment for financials (XLF ETF) and emerging markets (EEM ETF). The former benefit from the widening yield curve, the latter from plain devaluation.Gold performance is still short-term disappointing, and silver and platinum are leading. But it‘s the miners and the moves between various mining indices, that work to soothe the bulls‘ impatience. Understandable as we are in 5+ months of downside correction whose target I called on Aug 07 in the article S&P 500 Bulls Meet Non-Farm Payrolls, witnessing record pace of new money creation.The ongoing economic recovery will get new stimulus support, and that will work to broaden the precious metals advance. Again quoting my Friday‘s words:(…) in our print-and-spend-happy world, where the give or take $1.9T stimulus will sooner or later come in one way or another, we better prepare on repricing downside risk in the precious metals, and also better not to fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this just doesn‘t qualify yet in my view. All those serious correction calls have to wait – in tech and elsewhere, for we‘re going higher overall – like it or not.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookFinally, there is a whiff of bearish activity. Will it last or turn out a one day event as thus far in Feb? The chances for a sideways correction to last at least a little longer, are still on, however the short- and medium-term outlook remains bullish.Credit Markets and TreasuriesHigh yield corporate bonds (HYG ETF) wavered yesterday, trading in a sideways pattern during recent days. Encouragingly, yesterday‘s session attracted increasing volume, which I read as willingness to buy the dip. One dip and done?Long-term Treasuries (TLT ETF) are the key chart on my radar screen right now. The rise in yields is accelerating, and if progressing unmitigated, would throw a spanner into many an asset‘s works. Even though it‘s not apparent right now, there is a chance that we‘ll see a slowdown, even a temporary stabilization, over the coming sessions. The larger trend in rates is higher though, and in the dollar to the downside.Gold, Silver and CommoditiesThe heat gold is taking from rising Treasury yields, has gotten weaker recently, with the decoupling from rising nominal (real) yields being a good omen for precious metals universally. The dynamics of commodity price inflation, dollar hardly balancing under the weight of unprecedented economic policy and twin deficits, attests to the gold upleg arriving sooner rather than later.Let‘s step back, and compare the performance of gold, silver, copper and oil. The weekly chart captures the key turns in monetary policy, the plunge into the corona deflationary bottom, and crucially the timing and pace of each asset‘s recovery. Gold and silver were the first to sensitively respond to activist policies, followed by copper, and finally oil. Is their current breather really such a surprise and reversal of fortunes? Absolutely not.SummaryThe bearish push in stocks has a good chance of finally materializing today. How strong will its internals be, will it entice the bulls to step in – or not yet? The stock bull run is firmly on, and there are no signals thus far pointing to an onset of a deeper correction with today‘s price action.The gold bulls continue lagging behind their silver counterparts, predictably, with both under continued pressure. The yields are rising a bit too fast, taking the metals along – temporarily, until they decouple to a greater degree. Combined with the miners‘ signals, and unprecendented monetary and fiscal stimulus, unfolding real economy recovery, inflation making its way through the system, and the dollar struggling to keep its head above water, the new PMs upleg is a question of time.

There has been quite a bit of chatter related to precious metals lately.  The rally in Cryptos, particularly Bitcoin, and various other stocks have raised expectations that Gold and Silver have been overlooked as a true hedging instrument. As these rallies continue in various other stocks and sectors, Gold and Silver have continued to trade sideways over the past 6+ months – when and how will it end?GOLD SUPPORT NEAR $1765 MAY BECOME A NEW LAUNCHPADMy research team and I believe the recent downside trend in Gold has reached a support level, near $1765, that will act as a launching pad for a potentially big upside price trend. This support level aligns with previous price highs (May 2020 through June 2020) after the Covid-19 price collapse, which we believe is an indication of a strong support level.  As you can see from the Gold Futures Weekly chart below, if Gold price levels hold above $1765 then we feel the next upside rally in metals could prompt a move targeting $2160, then $2400.The February 2021 Gold contract expires on February 24 – only a few days away.  The CME Delivery Report shows an incredible amount of contracts already giving notice of a “Delivery Request”. This suggests that on or near February 25, a supply squeeze for Gold and Silver may become a very real component of price.For example, there are 32,831 contracts requesting delivery for February 2021 COMEX 100 Gold Futures as of February 16, 2021. That reflects a total delivery obligation of 3,283,100 ounces of Gold. The Silver contract deliveries are similar in size.  As of February 16, 2021, here are 1,865 February 2021 COMEX 5000 Silver contracts requesting delivery. That translates into over 9,325,000 ounces of Silver.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!We still have another five trading days to go before the February contract expires.  How many more futures contract holders will pile into the Delivery Que at COMEX and how will this translate into any potential price advance or decline?SILVER TRENDS HIGHER – ALREADY SHOWING STRONG DEMANDSilver has already begun to move higher while Gold continues to wallow near recent lows.  Our research team believes the next few days of trading in Gold and Silver could become very volatile as global traders suddenly realize the demand for Deliveries may squeeze prices much higher.  Traders should stay keenly aware of this dynamic in the Precious Metals markets as we may continue to see futures contract delivery requests out-pace supply as Precious Metals prices continues to move higher.The 100% Fibonacci measured move technique we are showing on these charts helps us to understand where and how upside price targets become relevant.  If support on these charts hold and the February 24, 2021 futures contracts expire with strong demand for physical deliveries, then we believe an upside price squeeze may setup fairly quickly (over the next 5 to 15+ days) in both Gold and Silver.We need to watch how Gold reacts near this support level and to pay attention to the delivery data from COMEX.  If these levels continue to increase over the next few days, before the February 24 expiration date, then we need to consider how and when the price will start to reflect this strong demand.  Currently, Gold price activity does not properly reflect what is happening in Silver and Platinum related to the demand for metals.  We believe, over the next 30 to 60+ days, this will change as Gold may enter a new bullish price phase – targeting $2400.  At this point, we believe the answer to this question will become known by February 25th or so.Precious Metals, Miners, Rare Earths, and Junior Miners may set up some really interesting opportunities for traders.  The entire Metals/Miners sector has been under moderate pressure recently and we believe that trend may be ending soon. 2021 is going to be full of these types of trend rotations and new market setups.   Staying ahead of these sector trends is going to be key to developing continued success in these markets.  As some sectors fail, others will begin to trend higher.  Learn how BAN strategy can help you spot the best trade setups. You can learn how to find and trade the hottest sectors right now in my FREE one-hour BAN tutorial. Don’t miss the opportunities in the broad market sectors over the next 6+ months. For those who believe in the power of relative strength, cycles and momentum then the BAN Trader Pro newsletter service does all the work for you in determining what to buy, when to buy it, and how to take profits while minimizing downside risk. In addition, you will be kept fully informed of the market with my short pre-market report delivered to you every morning along with the BAN Hotlist for those looking for more trades.Happy trading!

Dollar gains afer retail sales surprises to the upsideEuro Weakens To A Seven-Day LowThe euro currency is accelerating the pace of declines comparing to the previous few days. On an intraday basis, the euro slipped to a seven session low before recovering slightly.The declines come as the EURUSD has now breached the rising long term trendline once again.Still, given the recent rebound after the trendline breach on 5th February, we could see a recovery once again.Therefore, to the downside, only a confirmed close below 5th February lows of 1.1951 will see further declines coming.Meanwhile, to the upside, a reversal could see the trendline coming in as resistance or the euro could possibly breakout above the trendline once again.The long term correction could see the 200-day moving average being tested which currently sites around the 1.1800 region.The British pound sterling is extending declines following a flat close on Tuesday. Still, price needs to close below Tuesday’s low of 1.3901 to confirm further downside.The next immediate downside target is seen near 1.3733 where price established strong resistance previously. This price level forms the ideal target to the downside with support likely to come in.But in the event that the GBPUSD loses this handle, we might get to see further declines. This will push the cable down to the 1.3500 level which is pending a retest anyways.To the upside, price action will need to post a reversal and possibly rise above the Tuesday highs of 1.3950 in order to maintain the uptrend.WTI Crude Oil Inches Higher But Likely To Close FlatWTI crude oil is showing signs of losing its bullish momentum. Price action is seen struggling to get a foothold above 60.00.This has led to price action being rejected over the past three trading sessions. For the moment, the overall bias remains firmly to the upside.But this could change if oil prices close below Tuesday’s low of 59.31. This will potentially confirm the downside for the short term. The long term trendline will act as support in case of such a move.To the upside, oil prices are nearing the 61.35 level which marks the highs from 8th January. Given the current momentum it is unlikely to see oil prices rising further unless there is a strong breakout above 61.35.Gold Prices Fall To A Two-Month LowThe precious metal resumes its declines with price action currently trading near the 1777.50 level.The decline marks a new two-month low in the commodity. A break down below this level could further accelerate declines.Still, considering that this support level has held up previously around early December last year, the precious metal could post a rebound.The daily Stochastics oscillator is also nearing the oversold levels. This could coincide with the support level holding up.However, if the precious metal loses this support, we could see prices potentially falling to the next key support level near 1650.

Yesterday‘s bearish price action in stocks was the kind of shallow, largely sideways correction I was looking for. Not too enthusiastic follow through – just rocking the boat while the S&P 500 bull run goes on. Stocks are likely to run quite higher before meeting a serious correction. As I argued in yesterday‘s detailed analysis of the Fed policies, their current stance won‘t bring stocks down. But it‘s taking down long-term Treasuries, exerting pressure on the dollar (top in the making called previous Monday), and fuelling commodities – albeit at very differnt pace. The divergencies I have described yesterday, center on weak gold performance – not gaining traction through the monetary inflation, instead trading way closer in sympathy with Treasury prices. Gold has frontrunned the other commodities through the corona deflationary shock, and appears waiting for more signs of inflation. It didn‘t make a final top in Aug 2020, and a new bear market didn‘t start. It‘s my opinion that thanks to the jittery Treasury markets, we‘re seeing these dislocations, and that once the Fed focuses on the long end of the curve in earnest, that would remove the albatross from gold‘s back.I can‘t understate how important the rising yields are to the economy (and to the largest borrower, the government). Since 1981, we‘ve been in one long bond bull market, and are now approaching the stage of it getting questioned before too long. The rates are rising without the real economy growing really strongly, far from its potential output, and characterized by a weak labor market. Not exactly signs of overheating, but we‘ll get there later this year still probably.It‘s like with generating inflation – the Fed policies for all their intent, can‘t command it into happening. The Treasury market is throwing a fit, knowing how much spending (debt monetization) is coming its way, and the Fed‘s focus is surely shifting to yields at the long end. Bringing it under control would work to dampen the rampant speculation in stocks, and also lift gold while not hurting commodities or real economy recovery much. Sounds like a reasonable move (yield curve control), and I believe they‘re considering it as strongly as I am talking about it.Let‘s quote yesterday‘s special report on gold, inflation, and commodities:(…) the wave of new money creation (we‘re almost at double the early 2020 Fed‘s balance sheet value - $4T give or take then vs. almost $7.5T now – and that‘s before the multiplier in commercial banks loan creation kicks in) keeps hitting the markets, going into the real economy, predictably lifting many boats. It‘s my view that we have to (and will) experience a stock market bubble accompanied by the precious metals and commodities one – to a degree, simultaneously, for the stock market is likely to get under pressure first. Again, I am talking the big picture here – not the coming weeks.Let‘s examine the bear market is gold – some say that the late 2015 marked bottom, I‘m of the view that the 2016 steep rally was a first proof of turning tide. But the Fed got serious about tightening (raising rates, shrinking its balance sheet), and gold reached the final bottom in Aug 2018. Seeing through the hawks vs. dove fights at the Fed in the latter half of 2018 (December was a notable moment when Powell refused to the markets‘ bidding, remained hawkish in the face of heavy, indiscriminate selling across the board – before relenting).Since then, gold was slowly but surely gathering steam, and speculation in stocks was on. The repo crisis of autumn 2019 didn‘t have a dampening effect either – the Fed was solidly back to accomodative back then. These have all happened well before corona hit – and it wasn‘t able to push gold down really much. The recovery from the forced selling, this deflationary episode (which I had notably declared back in summer 2020 to be a one-off, not to be repeated event), was swift. Commodities have clearly joined, and the picture of various asset classes taking the baton as inflation is cascading through the system, is very clear.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsFinally, a daily downswing – not meaningful, but it‘s as good as it gets. The slightly lower volume though shows that there is not a raging conviction yet that this sideways move is over.The market breadth indicators aren‘t at their strongest. Both the advance-decline line and advance-decline volume dipped negative, which isn‘t worrying unless you look at new highs new lows as well. While still positive, $NYHL is showing a divergence by moving below the mid-Feb lows. Seeing its decline to carve a rounded bottom a la end Jan would be a welcome sight to the stock bulls. Before then, nothing stands in the way of muddling through in a shallow, corrective fashion.Credit Markets and TreasuriesThe divergence in both leading credit market ratios – high yield corporate bonds to short-term Treasuries (HYG:SHY) and investment grade corporate bonds to longer-dated Treasuries (LQD:IEI) – show the bond market strains. HYG:SHY clearly supports the S&P 500 rally, while LQD:IEI isn‘t declining in tandem with long-term Treasuries. Instead, it‘s carving out a bullish divergence as it‘s trading well above the Sep and Oct lows – unlike the TLT.Speaking of which, such were my words yesterday, calling for a Treasury reprieve to happen soon:(…) Long-term Treasuries (TLT ETF) are the key chart on my radar screen right now. The rise in yields is accelerating, and if progressing unmitigated, would throw a spanner into many an asset‘s works. Even though it‘s not apparent right now, there is a chance that we‘ll see a slowdown, even a temporary stabilization, over the coming sessions. The larger trend in rates is higher though, and in the dollar to the downside.The dollar is still topping out, and a new daily upswing doesn‘t change that – I look for it to be reversed, and for the new downleg reasserting itself.Gold, Silver and CommoditiesThe encouraging, budding short-term resilience of gold to rising Treasury yields, got a harsh reality check yesterday. While the latter ticked higher, gold declined regardless. Closing at the late Nov lows, it‘s still relatively higher given the steep rise in long-term Treasury yields since. A bullish divergence, but a more clear sign of (directional) decoupling (negating this week‘s poor performance) is needed.Let‘s look again at gold, silver, and commodities in the medium run. Silver decoupled from gold since the late Nov bottom in both, while commodities haven‘t really looked back since early Nov. Till the end of 2020, gold wasn‘t as markedly weak as it has become since, and actually tracked the silver recovery from the late Nov bottom. And the reason it stopped, are the long-term Treasury yields, which quickened their rise in 2021. It looks like an orderly decline in TLT is what gold would appreciate – not a rush to the Treasury exit door.SummaryThe bearish push in stocks has a good chance of finally materializing also today. How strong will its internals be, will it entice the bulls to step in again? Signs are for this correction to run a bit longer in time – but the stock bull run is firmly on, and there are no signals thus far pointing to an onset of a deeper correction right away.The gold bulls recovered a little of the lost ground, but that doesn‘t flip the short-term picture their way in the least. While the yellow metal is leading silver today, its overall performance in the short run remains disappointing, and the silver-gold spread trade I introduced you to a week ago, a much stronger proposition. Still, given the miners‘ signals, unprecendented monetary and fiscal stimulus, unfolding real economy recovery, inflation making its way through the system, and the dollar struggling to keep its head above water, the new PMs upleg is a question of time.

With the yellow metal just posting its lowest close since June and a bearish pattern forming, how vulnerable is gold to a further decline?Gold and mining stocks just broke to new yearly lows – as I warned you in my previous analyses. And that’s only the beginning.Let’s jump right into the charts, starting with gold.Figure 1 - COMEX Gold FuturesIn early February, gold broke below the rising red support line and it then verified it by rallying back to it and then declining once again. It topped almost exactly right at its triangle-vertex-based reversal, which was yet another time when this technique proved to be very useful.Gold has just closed not only at new yearly lows, but also below the late-November lows (in terms of the closing prices, there was no breakdown in intraday terms). This means that yesterday’s (Feb. 17) closing price was the lowest daily close since late June 2020. At the moment of writing these words, gold is also trading below the April 2020 intraday high.Gold was likely to slide based on myriads of technical and cyclical factors, while the fundamental factors remain very positive – especially considering that we are about to enter the Kondratiev winter, or we are already there. As a reminder, Kondratiev cycles are one of the longest cycles and the stages of the cycle take names after seasons. “Winter” tends to start with a stock market top that is caused by excessive credit. In this stage gold is likely to perform exceptionally well… But not right at its start. Even the aftermath of the 1929 top (“Winter” started then as well), gold stocks declined for about 3 months before soaring. In the first part of the cycle, cash is likely to be king. And it seems that the performance of the USD Index is already telling investors to buckle up.And speaking of stocks, what about mining stocks? As you might already well know, just as with gold, the miners moved below the November lows in terms of both the intraday prices and daily closing prices. What does that mean? If you’d like to explore mining stocks in detail and are curious to know more about their prices and possible exit levels, then our full version of the analyses contains exactly what you need to know.Getting back to gold…Figure 2If the fact that gold invalidated its breakout above its 2011 high, despite the ridiculously positive fundamental situation, doesn’t convince you that gold does not really “want” to move higher before declining profoundly first, then the above chart might.As I wrote above, gold is currently more or less when it was trading at the April 2020 top. Where was the USD Index trading back then? It was moving back and forth around the 100 level.100!The USD Index closed a little below 91, and gold is at the same price level! That’s a massive 9 index-point decline in the USDX that gold shrugged off just like that.There’s no way that gold could “ignore” this kind of movement and be “strong” at the same time. No. It’s been very weak in the previous months, which is a strong sign (not a fundamental one, but a critical one nonetheless) that gold is going to move much lower once the USD Index finally rallies back up.Right now, waiting for gold to rally is like waiting for the light to turn green, arguing that eventually it has to turn green, while not realizing that the light is broken (gold just didn’t rally despite the huge decline in the USDX). Yes, someone will fix it and eventually it will turn green, but it doesn’t mean that it makes much sense to wait for that to happen, instead of looking around and crossing the street if it’s safe to do so.Yes, gold is likely to rally to new highs in the coming years. And silver is likely to skyrocket. But in light of just two of the above-mentioned factors (gold’s extreme underperformance relative to the USD Index and the invalidation of a critical breakdown) doesn’t it make sense not to purchase gold right now (except for the insurance capital that is) in order to buy it after several weeks / few months when it’s likely to be trading at much lower levels?We live in very specific times. Getting a “like” on a post or picture becomes a necessary daily activity and means of self-validation. Not “liking” something that others posted or that is massively “liked” may be frowned upon or even viewed as being disrespectful. Plus, it seems that no matter what you do, everyone gets offended very easily. When did honesty, independence and common-sense stop being virtues?When it comes to gold investment analysis, it’s surprisingly similar. You either like gold and think that it’s going higher right away or you’re “one of them”. “Them” can be anyone who tries to manipulate gold or silver prices, “banksters”, or some kind of unknown enemy. “ Analysts' ” goal is often no longer to be as objective as possible and to provide as good and as unbiased an analysis as possible, but to simply be cheering for gold and provide as many bullish signals as possible regardless of what one really thinks about them. The above may seem pleasant to readers, but it’s not really in their best interest. In order to make the most of any upswing, it’s best to enter the market as low as possible and to exit relatively close to the top. What happens before a price is as low as possible? It declines. Why would something like that (along with those describing it) be hated by gold investors? It makes no sense, but yet, it’s often the case.Top of FormBottom of FormThe discussion – above and below – can be viewed as something positive or negative for any investor, but while reading it, please keep in mind that our goal is the same as yours – we want to help investors make the most of their precious metals investments. Call us old-fashioned, but regardless of how unpleasant it may seem, we’ll continue to adhere to honesty, independence and common-sense in all our analysesOk, but why on Earth would the USD Index rally back up? The Fed is printing so much dollars – why would they be worth more?!Because the currencies are valued with relation to each other and whether or not the USD Index moves higher or lower doesn’t depend only on what the Fed is doing.Figure 3What other monetary authorities do matters as well and right now the ECB is outprinting the Fed (that’s what the decline in the green line above means), which means that the euro is likely to fall more than the U.S. dollar. Therefore, the EUR/USD currency exchange rate would be likely to decline and since this exchange rate is the biggest (over 50%) component of the USD Index, it makes perfect sense – from the fundamental point of view – to expect the USD Index to move higher.Can gold rally despite higher USD Index values? Absolutely. However, it would first have to start to behave “normally” relative to the USD Index, and before that happens it would have to stop being extremely weak relative to it. And the fact that gold is at the same price level despite a 9-index-point decline in the USDX is extreme weakness.To make the technical discussion easier, I’m attaching the previous chart once again.Figure 4On Monday (Feb. 15), I wrote the following about the above chart:The size and shape of the 2017-2018 analogue continues to mirror the current price action . However, today, it’s taken 118 less days for the USD Index to move from peak to trough.Also, it took 82 days for the USDX to bottom in 2017-2018 (the number of days between the initial bottom and the final bottom) and the number amounts to 21.19% of the overall duration. If we apply a similar timeframe to today’s move, it implies that a final bottom may have formed on Feb. 12. As a result, the USDX’s long-term upswing could begin as soon as this week.Also noteworthy, as the USDX approached its final bottom in 2017-2018, gold traded sideways. Today, however, gold is already in a downtrend. From a medium-term perspective, the yellow metal’s behavior is actually more bearish than it was in 2017-2018.Also supporting the historical analogue, the USD Index’s current breakout above its 50-day moving average is exactly what added gasoline to the USDX’s 2018 fire. Case in point? After the 2018 breakout, the USDX surged back to its previous high. Today, that level is roughly 94.5.Based on this week’s rally it seems that the final bottom formed on Tuesday (Feb. 16) – just 2 trading days away from the analogy-based target, and in perfect tune with what I wrote back then. The breakout above both: the declining blue line, and the 50-day moving average was verified, and the short-term outlook here is clearly bullish.But isn’t the current situation similar to what happened in mid-2020? The correction that was followed by another decline?In a way, it is. In both cases, the USD Index moved higher after a big decline, but that’s about it as far as important similarities are concerned.What is different is the entire context. Even a single look at the above chart provides an instant answer. The mid-2020 correction was like the mid-2017 correction, and what we see right now is the post-bottom breakout, just as we saw in the first half of 2018.There are multiple details on the above chart that confirm it, including the sizes of the medium-term declines, the position of the price relative to the declining support/resistance lines, as well as relative to the 50-day moving average, and even the green arrows in the RSI indicator show how similar the preceding action was in case of this indicator. The vertical dashed line shows “where we are right now” in case of the analogy.Also, the fact that the general stock market has not yet declined in any substantial way only makes the short-term outlook worse (particularly for silver and miners). When stocks do slide, they would be likely to impact the prices of miners and silver particularly strongly.And please remember, we’re looking for the bottom in the precious metals sector not because we’re the enemy of gold or the precious metals investor . On the contrary, we’re that true friend that tells you if something’s not right, even if it may be unpleasant to hear. We want to buy more and at better prices close to the bottom, and we’ll continue to strive to assist you with that as well.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

USD weaker after a two-day gainEuro Attempts To Pare LossesThe euro currency is making a solid recovery, in a bid to recoup the losses from Wednesday.Price action is posting a reversal after it broke out from the long term daily trendline for the second time.However, the current pace of gains coincides with likely resistance from the trendline and the 50-day moving average.If the euro fails to close above Wednesday’s highs of 1.2107, then we might expect to see a continuation lower.For the moment, the support level near 1.2050 might help to stall further declines in the currency pair.But a daily close once again below this level will confirm further downside.The British pound sterling posted a strong reversal snapping a two-day losing streak. Price action was bullish as it broke past the previous highs near 1.3950.On an intraday basis, the GBPUSD rose to highs of 1.3985 before giving back some of the gains.Further upside is likely to continue as the GBPUSD approaches the key 1.4000 round number level.But given the current set up of the Stochastics oscillator, the bullish momentum might be losing steam.For the moment, the line in the sand is the Tuesday high of 1.3950. A daily close below this level could keep either prices moving sideways or a drop to Wednesday’s lows of 1.3829.Crude Oil Down Over One PercentOil prices are down over one percent on Thursday. The declines come after the commodity rose to intraday highs of 62.22 before giving back the gains.The overall bias in crude oil remains to the upside. Therefore, unless there is strong evidence of a correction, price action is likely to remain bullish.For the moment, the immediate trendline will be key to watch. A break down below this trendline could potentially accelerate short term declines.The main support level is near the 57.35 level. A close below 60.87 could potentially see the short term correction taking place.However, if oil prices manage to reverse the current gains, we could expect to see further upside in the near term.Gold Prices Steady Above 1764The precious metal is trading flat on Thursday following the sharp declines from the day before. Price action has not yet tested the 30 November lows of 1764.22.For the moment, we expect gold prices to consolidate between 1817.80 and 1764.22 levels. A breakout below 1764.22 could however extend declines down to the next key level near 1750.On a weekly basis, prices are consistently posting lower lows.However, the support level around the 1764 region is holding up. A weekly close below this level could open the way for further downside in the precious metal.

It´not a secret anymore that Silver is in a boom.The investor is digesting pandemic news for nearly a year now. And the newly termed phrase at the World Economic Forum: “In 2030, you will own nothing and be happy” makes one think twice.The chartist finds himself for almost a year in a bullish trend in Silver. This after Silver trading in a range for seven years. He/She sees Gold on the top of the list of ‘Top assets by market cap’ with Silver ranking 6th and Bitcoin ranking 9th.The market participant focused on fundamentals and market cycles is wondering how long the dollar will hold up as a fiat currency. Typically (over the last 600 years), a fiat currency hyperinflates after 93 years.Nevertheless, the question of “How much” is one to be answered, and it could be much larger time cycles that provide guidance there.The world viewed from a different angle might give clues:Toddlers have anxiety symptoms which can manifest in not eating properly, quickly getting angry or irritable, and being out of control during outbursts as well as constantly worrying or having negative thoughts and feeling tense and fidgety.Social Media addiction among  teens and young adults has exploded leading to an inability to stop or curb this addictive behavior despite suffering losses in friendship, decreased physical social engagement, and a negative impact at school.Worldwide obesity has nearly tripled since 1975. In 2016, more than 1.9 billion adults, 18 years and older, were overweight. Of these over 650 million were obese.The elderly are unwanted in a production-oriented society that measures human value by productivity rate.Yet, pet clothing stores and fresh pet food sections in grocery chain stores are becoming the norm.Any endeavors, including the arts, are measured against the benchmark of profitability. Resulting in the worship of money over beauty, ethics, and principles.The list goes on and could point as far back as to decadent times before the fall of Rome.Daily Chart of Silver, Range Trading:Silver in US Dollar, dailly chart as of February 18th, 2021.One part that has changed over time is the integrity of the markets. Free markets and their principle benefits are endangered. And then typically lies have short legs, and truth prevails.While Silver prices are still held in a range by artificial shorts, the cost of physical Silver much more accurately describes its value increase.  Weekly Chart of Silver, One deep breath and go:Silver in US Dollar, weekly chart as of February 18th, 2021.Once desperate bears have to give way to Silver’s real value and demand, we most likely see price-advances much more significant than generally assumed.S&P 500 Index in US Dollar, Monthly Chart, Large Silver cycles:S&P 500 Index in US Dollar, monthly chart as of February 18th, 2021.A view at the S&P500 chart above from a professional chartist’s perspective would qualify the hypothetical crash scenario, not as an abnormality but rather a typical scenario after advances this extended in time.In Rome, the leading coin used was The Denarius. With a 90% silver content (4.5 grams per coin), it was equal to a day’s work wages. Rome’s prosperity came from barter, and a finite amount of Silver came into the empire. Within 75 years, the Silver content per coin was diluted down to only 5%. Various emperors did this to finance wars and extravaganza. It was mainly hyperinflation that broke the empire. Sounds familiar?Large Silver cyclesOur intent is not to judge the world and the state it finds itself in, but markets reflect in cycles, and any view larger than one’s lifetime is hard to gauge. We might be in the midst of a market phase where next time around, we get a severe market correction; it might get ugly in a hurry. The result might be more dramatic than the corrections we have seen in the last 20 years. In this case, a look as far back as the Romans could be useful to determine how aggressively we hedge our bets, how much we buy into physical Silver. It looks like a few extra ounces couldn’t hurt.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|February 19th, 2021|Tags: low risk, Silver, silver bull, Silver Chartbook, technical analysis, time frame, trading principles|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

Under the Biden administration the economy could overheat, thereby increasing inflation and the price of gold.In January, Biden unveiled his plan for stimulating the economy, which is struggling as the epidemic in the U.S. continues to unfold. Pundits welcomed the bold proposal of spending almost $2 trillion. Some expenditures, especially on vaccines and healthcare, sound pretty reasonable. However, $1.9 trillion is a lot of money! And a lot of federal debt , as the stimulus would be debt-funded!So, there is a risk that Biden’s package would overheat the economy and increase inflation . Surprisingly, even some mainstream economists who support the deficit spending, notice this possibility. For instance, former Treasury Secretary Larry Summers, said that Biden’s stimulus could lead the economy to overheat, and that the conventional wisdom is underestimating the risks of hitting capacity. Although he doesn’t oppose the idea of another stimulus, Summers noted that “if we get Covid behind us, we will have an economy that is on fire”.Indeed, this is a real possibility for good reasons. First, the proposed package would not only be large in absolute terms (the nominal amount), but also relative to the GDP . According to The Economist , Biden’s proposal is worth about nine percent of pre-crisis GDP, nearly twice the size of Obama’s aid package in the aftermath of the Great Recession .And the stimulus is also large relative to the likely shortfall in the aggregate demand. I’m referring here to the fact that the winter wave of the coronavirus would be less harmful for the economy – and that there have already been big economic stimuli added last year, including a $900 billion package passed no earlier than in December.Oh yes, politicians were really spendthrift in 2020, and – without counting the aid passed in December – they injected into the economy almost $3 trillion, or about 14 percent of pre-crisis GDP, much more than the decline in the aggregate demand. In other words, the policymakers added to the economy more money that was destroyed by the pandemic .But the tricky part is that Americans simply piled up most of this cash in bank accounts, or they used it for trading, for instance. Given the social-distancing measures and limited possibilities to spend money, this outcome shouldn’t actually be surprising. However, the hoarding of stimulus shows that it has not yet started to affect the economy – but that can change when the economy fully reopens and people unleash the hoarded money. If all this cash finally reaches the markets, prices should go up.You see, the current economic downturn is unusual. It doesn’t result from the fact that Americans don’t have enough income and cannot finance their expenditures. The problem is rather that people cannot spend it even if they wanted to. Indeed, economic disruption and subdued consumer spending are concentrated in certain sectors that are most sensitive to social distancing – such as the leisure, transport and hospitality industries – rather than spread widely throughout the whole economy. So, when people will finally be able to spend, they will probably do so, possibly accelerating inflation .As well, normally the Fed would tighten its monetary policy to prevent the rise in prices. But now the U.S. central bank wants to overshoot its inflation target, so it would not hike interest rates only because inflation raises to two percent or even moderately above it.Another potential inflationary driver is dollar depreciation, which seems likely, given the zero-interest rates policy and the expansion in the U.S. twin deficit .Hence, without the central bank neutralizing the fiscal exuberance, it’s possible that Biden’s plan would overheat the economy, at least temporarily. Of course, that’s not certain and given the small Democrats’ majority in Congress, the final stimulus could be lower than the proposed $1.9 trillion. But it would remain large and on top of previous aid packages and pent-up demand, which makes the overheating scenario quite likely.Actually, investors have already started to expect higher inflation in the future – as the chart below shows, the inflationary expectations have already surpassed pre-pandemic levels.From the fundamental perspective, this is good news for the gold market. After all, gold is bought by some investors as an inflation hedge . Moreover, the acceleration of inflation would lower real interest rates , keeping them deeply in negative territory, which would also be positive for the yellow metal.So, although the expectations of higher fiscal stimulus plunged gold prices in January, more government spending – and expansion in budget deficits and public debt – could ultimately turn out to be supportive factors for gold. Especially if easy fiscal policy will be accompanied by the accommodative monetary policy – in particular quantitative easing and a rising Fed’s balance sheet – and inflation.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.

In keeping with last week’s theme, the market has mainly traded sideways this week. However, that correction I’ve been calling for weeks? We have potentially started.While I don’t foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of Q1 could happen.Bank of America also echoed this statement and said last week that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and as good as it gets’ earnings revisions.”Yes, the sentiment is still positive. That won’t change overnight. Vaccines seem more effective than we thought, especially against other variants of the virus. All that extra stimulus money and record low-interest rates could keep pushing stocks to more records and stimulate pent-up consumer spending. It’s not like the Fed is going to switch this policy up anytime soon, either.They don’t call it a stimulus for nothing.For weeks we’ve likely been in a rational bubble. Dhaval Joshi , the chief European investment strategist for BCA Research, has said that low bond yields meant the rally we’ve seen with stocks made sense.“Rational, because the nosebleed valuations are justified by a fundamental driver. And not just any fundamental driver, but the most fundamental driver of all – the bond yield.”Take a look at this chart comparing a “rational bubble” to an “irrational bubble.”But now? Things have possibly changed. Complacency, valuations, surging bond yields, and inflation concern me.They’re all connected. But look especially into the 10-year yield. It’s hovering around 1.30% for the first time in over a year.Why is this concerning?Rising interest rates=less attractive stocks.Look at this other chart. Forward P/E ratios are continuing to rise along with bond yields. In high-growth sectors, such as tech, this is especially concerning. The chart shows, in fact, that tech earnings yields have now been surpassed by the bond yield plus a fixed amount.The only three ways this can be resolved are for stock prices to decline, bond yields to fall, or earnings to rise and improve stock valuations. Considering earnings season is over, only options 1 or 2 seem feasible in the near-term.You combine this info with the Buffet Indicator (Total US stock market valuation/GDP), and you have a market that could be 228% overvalued.I’ve already correctly called the Russell 2000’s pullback after how much it’s overheated. Since February 9th, when I switched the call to a sell, it’s declined roughly 3.40%.More could follow.Look. Corrections are healthy and normal market behavior, and we are long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017), and we haven’t seen one in a year.A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. A Needed Cool Down for the Russell 2000Figure 1- iShares Russell 2000 ETF (IWM)Since February 9, the Russell 2000 small-cap index has lagged behind the other indices after significantly overheating. I switched my call to a SELL then, and it promptly declined by 3.40%.I do love small-caps for 2021, though, and I really like this decline. If it declines about another 1.50%, I’d feel more confident switching the call to a BUY.As tracked by the iShares Russell 2000 ETF (IWM) , small-cap stocks have been on a rampage since November.Since the market’s close on October 30, the IWM has gained nearly 44.5% and more than doubled ETFs’ returns tracking the larger indices. If you thought that the Nasdaq was red hot and frothy, you have no idea about the Russell 2000.Not to mention, year-to-date, it’s already up a staggering 14%.Judging from these types of returns, the IWM’s decline since February 9 is hardly shocking. But for me, it’s still not enough, outside of switching the call to a HOLD.It pains me not to recommend you to BUY the Russell just yet. I love this index’s outlook for 2021. Aggressive stimulus, friendly policies, and a reopening world could bode well for small-caps. Consumer spending, especially for small-caps, could be very pent-up as well.But we need to just hold on and wait for it to cool down just a little bit more for a better entry point.HOLD. If and when there is a deeper pullback, BUY for the long-term recovery.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Stocks are predictably staging a continued recovery from the mostly sideways correction – a shallow one not strong enough to break the bulls‘ back. Credit markets are largely behaving – with the exception of long-term Treasuries, which I see as highly likely to draw the Fed‘s attention – just as I discussed in detail yesterday. The S&P 500 keeps doing fine, and so does my open position there – in the black again. On one hand, volatility remains low regardless of intraday attempts to rise, on the other hand, the put/call ratio has risen quite high yesterday – it‘s as if the traders are expecting a shoe to drop, similarly to the end of Jan. Will it, is there any on the horizon?Treasuries at the long-end are falling like a stone, and those on the short end (3-months) are seeing higher prices in 2021. The bond market is clearly under pressure, and exerting influence primarily upon precious metals (and commodities such as oil, which are experiencing a down day today, after quite a string of foreseeable gains). The bearish sentiment in gold and miners is running rampant, and it‘s been only yesterday when I answered a question on ominous head and shoulders patterns in the making, at my own site. This clearly illustrates the razor edge we‘re at in precious metals:(…) This is more often than not the case with H&S patterns – they are not the most reliable ones, highly judgemental at times, and their targets are more often than not far away, which makes them a not fully reliable trading proposition when a long enough time (trade) series is taken. I rather look at what is driving individual moves – which asset classes influence it the most at a given time? Where to look for so as to get most precise information? With gold and gold miners (they still trade quite tightly together), it's the Treasury yields on the long end.As I wrote in today's (Feb 18) precious metals report, despite the new 2021 lows in TLT, gold isn't amplifying the pressure – it's trading well above the $1,770 level, and enjoys a stronger session today than silver. Look at the gold – TLT evolving relationship, as that's the key determinant right now. The post-Nov dynamic speaks in gold's favor – under the surface. Don't underestimate the Fed either.Plenty to talk and cover in the precious metals really – just as usual at such crossroads. Let‘s briefly recap all the ducks lining up in stocks first.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 and VolatilityRepeated lower knots mark a refusal to decline as the daily dips keep being bought. Given the constructive developments in high yield corporate bonds and its key ratio (HYG and HYG:SHY), I fully expect the uptrend to keep reasserting itself once again. The talk about a top, imminent correction or stretched valuations, is still premature.The best known volatility measure is still refusing to rise on a lasting basis, indicating that the environment remains favorable to higher stock prices.Dollar and TreasuriesThe world reserve currency is on the doorstep of another powerful decline, and not initiating a bull market run. The caption says it all – this is the time for antidollar plays to thrive in our era of ample credit, unprecedented money creation that‘s triggering a Roaring Twenties style of speculative environment, not a Kondratieff winter with a deflationary shock as you might hear some argue.Look around, check food, energy, or housing prices, and you‘ll see how connected to reality are the calls of those writing that inflation isn‘t a problem (monetary inflation lifting many asset classes). Check that against Fed President Daly stating that the inflationary pressures now point downwards… and make your own conclusions about the new money wave hitting the real economy.Gold, Silver and MinersJust as gold is challenging (resting on) the late Nov lows, so is the miners to gold ratio. That‘s a key one – I mentioned at the very end of Jan that I would like to see it start to lead higher. Seeing the latest two-day losing streak, it‘s not happening, and the late Jan breakdown which might have turned out to be false, may not materialize in the short run. Let‘s get a proper perspective by displaying this chart in weekly format.Is this the dreadful breakdown threating doom and gloom in the precious metals? Zooming out definitely provides a very different take – a more objective one than letting (fear) emotions run high and tickitis to take over.We‘re still consolidating, and not making lower lows – regardless of this week‘s increased gold sensitivity to rising yields as seen in the plunging TLT values. Inflation is making its way through the system as surely as Titanic‘s watertight compartments were filled with water. I‘ve discussed on Wednesday at length inflation, past Fed action and asset appreciation, and yesterday explained why the central bank will be tied into a war on two fronts as it gets to seek control over the yield curve at the long end too.Another short-term worrying chart as silver miners are caught in last days‘ selling whirlwind. Even the juniors lost their short-term edge over the seniors, making me think that a potential washout event before a more universal sectoral rebound, might be at hand.Pretty worrying for those who are all in gold – unless they took me up on last Friday‘s repeated idea that silver is going to outperform gold in the next precious metals upleg, which I formulated that day into a spread (arbitrage) trade long silver, short gold. Check out the following chart how that would have worked out for you.The dynamics favoring silver are unquestionable – starting from varied and growing industrial applications, strengthening manufacturing and economy recovery, poor outlook in silver above ground stockpile and recycling, to the white metal being also a monetary metal. Silver is bound to score better gains than gold, marred by the Bitcoin allure, would. SummaryThe bearish push in stocks didn‘t indeed take the sellers far – just as I wrote yesterday, there was no reason to hold on to your hat. The stock bull run is firmly entrenched, and there are no signals thus far pointing to an onset of a deeper correction right away as all we‘re going through, is a shallow correction (in time especially).Bearish dollar, $1.9T or similar stimulus not priced in, and yet gold isn‘t taking a dive. Amid very positive fundamentals, it‘s the technicals that are short-term challenging for gold – we‘re in truly unchartered territory given the economic policies pursued. I stand by my call to watch the TLT chart very closely – it looks like an orderly TLT decline is what gold needs, not a selling stampede. Despite the current disclocation with gold being the weakest of the weak (I am looking at commodities for cues), I still stand by the call that a new PMs upleg is only a question of time – a shortening one, at that.

Gold continues to wallow near its recent low price level, near $1765.  Silver has continued to trend moderately higher – but still has not broken out to the upside.  Many analysts have continued to estimate when and how metals will begin the next wave higher.  My research team and I believe we've found some answers to these questions and want to share our research.Silver Explodes In Late-Stage Excess RalliesThe first thing we want to highlight is that Silver tends to rally excessively in the later stages of any precious metals rally.  For example, in mid-2010, Silver began an incredible upside price rally after Gold rallied from $720 (October 2008) to $1265 (June 2010).  This suggests that the price relationship between Gold and Silver “dislocated” in the early stage breakdown of the financial markets near the peak of the 2008-09 Housing Crisis Peak.  Then, in late 2010, Silver began to move dramatically higher while Gold continued to push an additional 80%+ higher.The Silver rally in 2010~11 is clearly evident on this Silver/Gold Weekly chart, below.  The lack of any Silver price advance compared to Gold prior to the 2010 rally is also evident.  One interesting fact relating to how Silver reacted to the 2008~09 Housing Crisis is the deep collapse we see on the left edge of this chart.  A similar collapse happened just recently as COVID-19 shocked the global markets in 2020. One key aspect we found very interesting is how Silver recovered moderately slowly in 2009~10 before launching into an incredible breakout rally in late 2010 – nearly 15 months after the bottom.  Currently, after the COVID-19 bottom, Silver has rallied a bit more aggressively and quickly.  While Gold has languished below $1800 recently, Silver has continued to gain value compared to Gold.  This new dynamic may suggest the current setup in Precious Metals is transitioning into the late-stage excess rally much quicker than in 2009-10.Treasury Yields Drive Explosive Trends In SilverHow do Treasury Yields relate to price action in Silver?  The first thing we need to understand is that Silver can rally while Yields are rising or falling.  What happens when Yields rise over long periods of time is that Silver will tend to attempt to find support while trending moderately higher.  Eventually, if fear subsides in the global markets, Silver may fall in price in the later stages of rising Yields.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!As you can see on the Treasury Yield to Silver chart below, Yields collapse in 2008 & 2009, as the Housing Crisis unloaded on the global markets.  Yields also collapsed in 2020 as COVID-19 shocked the global markets.  In 2009-10, interest rates collapsed and Yields collapsed until late 2013.  Silver continued to form a base in 2015~16 as Yields rose and peaked.  Near the peak in Yields in 2018, Silver continued to attempt to establish a bottom.What we find interesting related to this chart is the steep collapse in Yields after the 2018 peak and the recent rally in both Yields and Silver.  We believe Yields may stall and begin to move lower – resulting in another rally attempt in Silver and Gold.  We believe the recent rally in Yields is a reaction to the deep lows related to COVID-19 and that Silver is representing a price pattern similar to 2008-09 – a deep low, followed by a moderately strong price recovery.  Yields could stay low for much longer than many people expect if our research are correct.If Yields continue to stay near or below current levels, the lowest ever experienced in recent history, then Silver should begin another rally attempt very quickly – possibly within just a few weeks.  The question becomes, what would prompt Yields to fall quickly from current levels?  Could some type of global credit or financial crisis be brewing again?Commodities & Metals AlignLast but not least, we want to highlight the correlation between commodities and Silver/metals.  When commodities prices rise, in general, Silver rises as well.  The Monthly Commodity & Silver chart, below, highlights the rally in Commodities in 2010~2011 as well as the incredible rally in Silver that took place at the same time.  Now, focus on the hard right edge of this chart and pay attention to the rally in Commodities and Silver that has taken place over the past 12+ months.  What is brewing is that Commodities are rallying from a deep bottom that has taken over 9 years to complete.  The continued decline in commodities since 2011 has prompted a very strong price recovery attempt after the COVID-19 deep lows.  Silver has reacted to this rally in Commodities, like it usually does, to prompt a fairly strong upside price trend.Recently, though, Silver has stalled while Commodities prices have rallied.  This suggests that Silver is congesting in a new momentum base and should begin an explosive upside price rally – comparable to the rally we are seeing in Commodities.  Commodities have rallied near 20% over the past 12 weeks while Silver has nearly the same amount over the same span of time.  From the COVID-19 lows, the Commodity Index rallied nearly 22% while Silver rallied more than 127%.  If Silver were to maintain this ratio, the 20% rally in Commodities should prompt a 110% rally attempt in Silver.Given our research related to how Silver has moved compared to Gold, Treasuries, and Commodities, we believe Silver is basing and building momentum for a big breakout rally.  We believe the upside move in Yields has put pressure on Silver and Gold recently to stall/consolidate.  We believe Commodities are building strong upside price momentum which should push Gold and Silver higher.  As the Commodity rally continues while Gold and Silver stall, an incredible amount of upside price momentum builds up over time.  When it breaks, it could be very explosive.A change of direction in Yields could prompt Silver and Gold to resume a strong upside price trend. Either way, as long as Commodities continue to rally and Yields begin to stall or more sideways, Gold and Silver are poised to attempt another advancing leg higher.Our research team believes Gold and Silver are poised to make another big price advance.  We wish we could tell you exactly when it will happen – but we can't.  Our estimate is that within the next 2 to 4 weeks, continued pressures will likely push both Gold and Silver into an upside breakout price trend.  We believe the amount of rally pressure that is building in Gold and Silver is immense.  Time will tell if we are correct or not.Don’t miss the opportunities in the broad market sectors over the next 6+ months, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Learn how the BAN strategy can help you spot the best trade setups because staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Stay safe and warm!

Risk on sentiment pushes dollar lowerEuro Closes The Week Almost FlatThe euro currency managed to pull back after hitting a two-week low during the week. Price action remains steady within the 1.2050 and 1.2144 levels for the moment.The overall trend remains flat with the key price level established. Only a strong break out from either of these levels will indicate further direction in the trend.The Stochastics oscillator on the daily chart could likely signal a move to the upside.However, for this to happen, the euro currency will need to break out above 1.2177 – 1.2144 levels.To the downside, support is firmly established at 1.2050 which has held up on the previous retest.The British pound sterling has closed with gains for six consecutive weekly sessions so far.The gains put the GBPUSD over a three and half year high, closing on Friday at 1.4018. This puts the currency pair near a multi-year support/resistance level.A continuation to the upside could see further gains coming.In the short term, price action is able to make consistent higher lows in maintaining the bullish trend. Therefore, further gains are likely as long as the current moment holds.The daily Stochastics oscillator is in the overbought levels since 9th February. This could, however, change if the momentum shifts to the downside.For the moment, the initial level near 1.3851 will be key ahead of any short term corrections.Oil Prices Pullback From A 13-Month HighOn Friday, WTI Crude oil prices closed with back to back losses. This led to the weekly price action closing in the red after prices briefly rose above 61.35 earlier in the week.The declines come after oil prices have been moving in a sharp and steady trend.On the 4-hour charts, we see the trendline breached. This has led to a modest pullback with prices rejected ahead of moving lower.If oil prices continue to move lower, then we could see the 57.35 level of support being tested. Establishing support here could potentially boost the upside.The Stochastics oscillator is currently near the oversold levels and could see some recovery in prices.To the upside, the price level of 60.87 needs to be breached in order for oil prices continue pushing higher.Gold Pulls Back From A Seven-Month LowThe precious metal fell to a seven-month low over the week before managing to recovery with bullish gains on Friday.Price action closed with gains after Thursday’s doji pattern. This also comes near the support level of 1764.With the Stochastics oscillator also turning higher, the current rebound could see gold prices likely to test the 1817.79 level of to establish resistance once again.Overall, price action could remain trading within these levels for the near term. Further downside is likely if gold loses the support near 1764.For the moment, there is a possibility that the precious metal could move to the upside.This is especially true with the Stochastics oscillator on the daily chart moving deeper into the oversold levels.

Indices, for the most part, closed fractionally higher to end the week. But a new headwind for stocks could be more concerning - rising bond yields.That correction I’ve been calling for weeks could have potentially started.While I don’t foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of Q1 could happen.Bank of America also echoed this statement and said last week that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and as good as it gets’ earnings revisions.”But rather than looking at the past, let’s take a look at what’s on tap this week to get you ready for what could potentially be a volatile week ahead.This coming week, be on the lookout for the January leading indicator index, durable goods orders, and personal income and spending.On Tuesday, we will also receive the February Consumer Confidence Index; on Wednesday, the Census Bureau will release upcoming home sales. On Friday, the University of Michigan will release its Consumer Sentiment Index.Of course, as we’ve seen in weeks past, jobless claims from the previous week will be announced on Thursday too. After outperforming the last few weeks, the jobless claims announced last Thursday (Feb. 18) grossly underperformed and reached their worst levels in nearly a month.Earnings season has been outstanding but is winding down now. Be on the lookout this week for earnings from Royal Caribbean (RCL) on Monday (Feb. 22), Square (SQ) on Tuesday (Feb. 23), Nvidia (NVDA) on Wednesday (Feb. 24), and Virgin Galactic (SPCE) and Moderna (MRNA) on Thursday (Feb. 25).We have the makings of a volatile week, and as I mentioned before, a possible correction.Look. Don’t panic. We have a very market-friendly monetary policy, and corrections are more common than most realize. Corrections are also healthy and normal market behavior, and we are long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017), and we haven’t seen one in a year.While it won’t happen for sure, I feel like it’s inevitable because of how much we have surged over the last few months.A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Will the Russell 2000 Overheat Again?Figure 1- iShares Russell 2000 ETF (IWM)The Russell 2000 popped on Friday (Feb. 19) after seeing a bit of a pullback since February 9. Between February 9 and the close on February 18, the Russell 2000 lagged behind the other indices after significantly overheating. I switched my call to a SELL then on the 9th, and it promptly declined by 3.40% before Friday’s session.I foresaw the pullback but cautiously saw a rally and switched to a HOLD call before it popped over 2% on Friday (Feb. 19).I do love small-caps for 2021, and I liked the decline before Friday. However, I feel like the index needs a minimum decline of 5% from its highs before switching it to a BUY.As tracked by the iShares Russell 2000 ETF (IWM) , small-cap stocks have been on a rampage since November.Since the market’s close on October 30, the IWM has gained nearly 47.56% and more than doubled ETFs’ returns tracking the larger indices. If you thought that the Nasdaq was red hot and frothy, you have no idea about the Russell 2000.Not to mention, year-to-date, it’s already up a staggering 16.38%.It pains me not to recommend you to BUY the Russell just yet. I love this index’s outlook for 2021. Aggressive stimulus, friendly policies, and a reopening world could bode well for small-caps. Consumer spending, especially for small-caps, could be very pent-up as well.But we just need to hold on and wait for it to cool down just a little bit more for a better entry point.HOLD. If and when there is a deeper pullback, BUY for the long-term recovery.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

The narrow trading range in stocks continues, and the shallow sideways correction will eventually resolve itself with another upleg. The signs are countless, and the riskier part of the credit market spectrum agrees. As money flows from the Tresury markets, and sizable cash balances are sitting on many a balance sheet, there is plenty of fuel to power the S&P 500 advance.With volatility in the tame low 20s and the put/call ratio again moving down, the bears‘ prospects are bleak. As I wrote last week, their time is running out, and a new stock market upleg approaches. It‘s the bond market that‘s under pressure, with both investment grade corporate bonds and long-dated Treasuries suffering in the accelerated decline.Gold is the most affected, as the sensitivity of its reaction to the rising long-tern yields, has picked up very noticeably. How long before these draw both the Fed‘s attention and action – what will we learn from Powell‘s testimony on Tue and Wed? And when will the much awaited stimulus finally arrive, and force repricing beyond the metals markets?Before that, gold remains on razor‘s edge, while silver leads and platinum flies for all the green hydrogen promise. The dollar has given back on Thu and Fri what it gained two days before, and remains in its bear market. Not even rising yields were able to generate much demand for the world reserve currency. Its lower prices stand to help gold thanks to the historically prevailing negative correlation, counterbalancing the Treasury yields pressure.Plenty of action that‘s bound to decide the coming weeks‘ shape in the precious metals. And not only there as oil experienced 2 days of lossess in a row – practically unheard of in 2021 so far. On Saturday, I‘ve added a new section to my site, Latest Highlight, for easier orientation in the milestone calls and timeless pieces beyond the S&P 500 and gold. Enjoy!Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe weekly indicators suggest that a reversal is still not likely. There is no conviction behind the weekly decline, and signs are still pointing to a sideways consolidation underway.The daily chart reflects the relatively uneventful trading – we‘re in a phase of bullish base building before powering off to new highs. See how little the daily indicators have retreated from their extended readings, and the barely noticeable price decline associated.S&P 500 InternalsAll the three market breadth indicators show improved readings, and my eyes are on new highs new lows throwing their weight behind the prior two indicators‘ advance. The overall impression is one of balance.The value to growth (VTV:QQQ) ratio shows that tech (XLK ETF) has fallen a bit out out of step recently – we‘re undergoing another microrotation into value stocks. The stock market leadership is thus broadening, confirming the findings from the advance-decline line (and advance-decline volume) examination.Credit MarketsOne chart to illustrate the bond market pressures – high yield corporate bonds are holding gained ground while investment grade corporate bonds and long-dated Treasuries are plunging like there is no tomorrow. With each of their rebound attempt sold, the dislocations are increasing – a great testament to the euphoric stage of the stock market advance. Gold and TreasuriesGold price action isn‘t as bearish as it might seem based on last week‘s moves. Yes, the readiness to decline in sympathy with rising yields, is diconcerting, but the yellow metal stopped practically at the late Nov lows, and refused to decline further. Low prices attracted buying interest, and due to the overwhelmingly negative sentiment for the week ahead, the yellow metal may surprise on the upside. Time for the bulls to prove themselves as the tone of coming weeks‘ trading in gold is in the balance.The daily chart‘s correlation coefficient has moved into strongly positive territory in 2021, illustrating the headwinds gold faces. Despite the prevailing wisdom, such strongly positive correlation isn‘t the rule over extended periods of time. That‘s the message of the daily chart – but let‘s step back and see the bigger picture similarly to the way I did on Friday witht the $HUI:$GOLD ratio.Not an encouraging sight at the moment. The tightness of mutual relationship is there, and given the decreased focus on timing (one candle representing one week) coupled with the correlation coefficient being calculated again over a 20 period sample, the week just over shows that regardless of the post-Nov resilience, gold is clearly getting under more pressure.Gold and DollarLet‘s do the same what I did about long-term Treasuries and gold, also about the dollar and gold. Their historically negative correlation is receding at the moment as the two face their own challenges. The key question is when and from what level would the fiat currency and its nemesis return to trading in the opposite directions. Such a time is highly likely to be conducive to higher gold prices.On the weekly chart, the negative correlation periods are winning out in length and frequency. Certainly given the less sensitive timining component through weekly candlesticks and 20-period calculation, the current strength and level of positive correlation is rather an exception and not a rule. Combining this chart‘s positive correlation between the two with the daily chart‘s negative yet rising readings, highlights in my view a potential for seeing an upset in the momentary relationship.In other words, the gold decline over the past now almost 7 months going hand in hand with mostly sliding dollar, would turn into higher gold prices accompanied by lower dollar values. How much higher gold prices, that depends on the long-term Treasuries market – that‘s the one playing the decisive role, not the dollar at the moment.Gold, Silver and MinersSilver is doing fine, platinum very well, while gold struggles and needs to prove itself. That‘s the essence of the long silver short gold trade idea – the silver to gold ratio attests to that.Quoting from Friday‘s analysis:(…) The dynamics favoring silver are unquestionable – starting from varied and growing industrial applications, strengthening manufacturing and economy recovery, poor outlook in silver above ground stockpile and recycling, to the white metal being also a monetary metal. Silver is bound to score better gains than gold, marred by the Bitcoin allure, would. Final chart of today‘s extensive analysis is about the two miners to gold ratios, and the divergencies they show. The ETF-based one (GDX:GLD) is sitting at support marked by both the late Nov and late Jan lows, while $HUI:$GOLD is probing to break below its late Jan lows, and these were already lower than the respective late Nov lows.Both ratios are sending a mixed picture, in line with the theme of my latest reports – gold is on razor‘s edge, and the technical picture is mixed given its latest weakness. That‘s the short run – I expect that once the Fed‘s hand is twisted enough in TLT and TLH, and speculation on yield curve control initiation rises, the focus in the precious metals would shift to inflation and its dynamics I‘ve described both on Wed and Fri. SummaryThe sellers in stocks aren‘t getting far these days, and signals remain aligned behind the S&P 500 advance to reassert itself. Neither the Russell 2000, nor emerging markets are flashing divergencies, and the path of least resistance in stocks remains higher.Gold‘s short-term conundrum continues - positive fundamentals that are going to turn even more so in the near future, yet the key charts show the king of metals under pressure, with long-term Treasury yields arguably holding the key to gold‘s short-term future. The decoupling events seen earlier this month, got a harsh reality check in the week just over. Yet, that‘s not a knock-out blow – the medium- and long-term outlook remains bright, and too many market players have rushed to the short side in the short run too.

The recent FOMC minutes are hawkish and negative for the price of gold, but the Fed will remain generally dovish for some time.Last week, the Federal Open Market Committee (FOMC) published minutes from its last meeting in January . They reveal that Fed officials became more optimistic about the economy than they were in December. The main reasons behind the more upbeat economic projection were the progress in vaccinations, the government’s stimulus provided by the Consolidated Appropriations Act 2021, and the expectations of an additional sizable tranche of fiscal support in the pipeline:Most participants expected that the stimulus provided by the passage of the CAA in December, the likelihood of additional fiscal support, and anticipated continued progress in vaccinations would lead to a sizable boost in economic activity.The Committee members were so convinced that the longer-run prospects for the economy had improved, that they decided to skip reference to the risks to the outlook in their official communications:in light of the expected progress on vaccinations and the change in the outlook for fiscal policy, the medium-term prospects for the economy had improved enough that members decided that the reference in previous post-meeting statements to risks to the economic outlook over the medium term was no longer warranted.Hence, the recent minutes are generally hawkish and bad for gold . They show that the FOMC participants turned out to be more optimistic about the U.S. economy over the medium-term, as they started to expect “strong growth in employment, driven by continued progress on vaccinations and an associated rebound of economic activity and of consumer and business confidence, as well as accommodative fiscal and monetary policy.”And, although they acknowledged that inflation may rise somewhat in 2021, the Fed officials generally were not concerned about strong upward pressure, with “most” participants still believing that inflation risks were weighted to the downside rather to the upside. In other words, they expect more growth than inflation.Implications for GoldThe Fed officials that have become more optimistic about the economy are proving negative for gold prices. Gold shines most when the Fed is pessimistic about GDP growth and the labor market, as these two factors are more prone to loosen the Fed’s monetary policy . In other words, gold prices need more inflation than economic growth in order to grow. Alternatively, gold needs the Fed to do something and expand its monetary accommodation.Indeed, the last week hasn’t been good for the price of the yellow metal. As the chart below shows, it declined below $1,800 to $1,773 on Thursday (Feb. 18), the lowest level since November 2020.Of course, the decline in the gold prices was more related to the significant selloff in the U.S. bond market than to the FOMC minutes. The bond yields increased sharply. For instance, the 10-year TIPS yields rose from -1.06 on February 10 to -0.87 on February 18, 2021, as one can see in the chart below.However, both events clearly show elevated expectations about the medium-term economic growth. Both investors and central bankers have become more optimistic about the future amid progress in vaccinations and greater prospects for additional fiscal stimulus. The strengthened risk appetite has supported equity prices, making some investors head for the exits in the gold market .Having said that, although gold prices still have some room to go lower – especially if real interest rates rally further – the fundamentals are still positive . I’m referring here to the fact that the U.S. economy has fallen into the debt trap . Both private and public debt is enormous. In such an environment, the interest rates cannot significantly increase, as they would pose a great risk to an overvalued equity market and Treasury. So, the Fed wouldn’t allow for really high interest rates and would intervene, either through expanding its quantitative easing program or through capping the yield curve .Another issue is that the Fed is not going to change its dovish monetary policy anytime soon. Even in the recent, relatively upbeat minutes, Fed officials acknowledged that economic conditions were far from the central banks’ targets:Participants observed that the economy was far from achieving the Committee’s broad-based and inclusive goal of maximum employment and that even with a brisk pace of improvement in the labor market, achieving this goal would take some time (…) Participants noted that economic conditions were currently far from the Committee’s longer-run goals and that the stance for policy would need to remain accommodative until those goals were achieved.Moreover, the Fed’s staff assessed the financial vulnerabilities of the U.S. financial system as being notable . The asset valuation pressures are elevated, and vulnerabilities associated with business and household debt increased over the course of 2020, from levels that were already elevated before the outbreak of the pandemic . So, given all these fragilities, it is unlikely that we will see a really hawkish Fed or significantly higher interest rates. There is also a possibility of the next financial crisis, given the high debt levels. All these factors should support gold prices in the long-term, although more declines in the short-term are possible of course, due to the more positive sentiment among investors and rising bond yields.If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care

EURUSD On Track For A Three-Day GainThe euro currency is on track for a three-day back to back gain. Price action is recovering sharply following the declines during the middle of last week.For the moment, price action will be challenging last week’s highs of 1.2168. A convincing breakout above the resistance area of 1.2177 will put the bullish bias back on the table.Currently, the 4-hour chart is also shaping up to show an inverse head and shoulders pattern. Therefore, a successful breakout above 1.2177 will push the euro currency toward 1.231 level at the very least.This will mark a lower high comparing to the highs from January this year.GBPUSD Maintains Its Impressive RallyThe British pound sterling maintains a strong hold on the bullish momentum with six consecutive weekly gains so far.Price action is nearing the April 2008 highs of 1.4376. The strong uptrend could be further cemented if the cable breaks out sharply from the rising price channel.The immediate support to the downside is near the 1.3951 level at the moment. However, with the current pace of gains, we expect prices to continue rising above the 1.4000 level.On the daily chart as well, price action remains biased to the upside following the strong bullish reversal pattern on Thursday last week.Crude Oil Attempts To Pare LossesWTI crude oil prices are looking bullish with price action posting a strong recovery after the declines from Thursday and Friday last week.For the moment, price is yet to breakout above last Thursday’s highs of 62.22. But this is essential for the commodity to maintain its bullish position.Following the reversal in the direction on Monday, we expect the minor support near 58.85 to hold prices from declining further.To the upside, oil prices will be battling the confluence of the horizontal resistance level and the trendline around the 60.87 region.If price fails to close out above this level, we could see a correction down to the 57.35 level eventually.Gold Prices Rise To A Four-Day HighThe precious metal is posting strong gains on Monday, capitalizing on a weaker greenback. As a result, price action is up over 1.5% intraday and is trading near a four-day high.Despite the current gains, XAUUSD will need to breakout above the 1817.79 level of resistance. A breakout above this level will also push price action out from the falling price channel.This could potentially signal the end of the correction in gold prices as the upside resumes.However, ahead of further gains, a high low within the 1817.79 – 1764.22 levels could give it more upside bias. This will potentially confirm the end of the current declines.Above 1817.79, gold prices will challenge the 1850 levels next.

Bitcoin surpassed another milestone trading well over 50k last week. Even the strongest doubters start joining in. All professionals have begun to take a bite, and we are far from speculating if this idea has merit. Now the question is how long it will hold steadfast under the attack of possible government coin inventions.It isn’t easily replaced since it already has a history. New inventions might not become an immediately acceptable standard. After all, the large part is trust. We are always rushing to Gold and Silver because of its long historical trust established as a means of barter. With a world much more intertwined geographically, we need a third payment method to allow for large-distance transactions. Something Gold and Silver cannot easily provide.BTC-USD, Weekly Chart, When to get in:BTC-USDT, weekly chart as of February 22nd, 2021.The question isn’t any longer if Bitcoin will make it or whether it is a bubble or whether it is a temporary thing. The question all that are not holding Bitcoin should be asking is: “Where can I get in?”With bitcoin´s past volatility, it is safe to say we will find ourselves in a retracement in the not-to-distant future where entries near US$51,500 and at the levels below of US$47,500 and US$37,500 are entry zones to keep an eye on. No need to bet the farm but ignoring Bitcoin to wait for another round of next advances isn’t advisable. BTC-USDT, Hourly Chart, Know when to get out:BTC-USDT, hourly chart as of February 22nd, 2021.One can tell what type of money has entered the arena by the way price is advancing. When breakout trades in frequency dominate all other chart pattern formations, it is evident that less-educated funds entered the arena. Last Friday, we advised channel members in our free Telegram channel to take partial profits at US$55,500, a smart point of exit. Yes, prices did advance even higher to US$58,352, but we perceive markets not from maximizing profits but from a risk perspective. This chart shows how volatile noise came in right after these price levels and bears and bulls started their struggle. A time where one would want to be exposed with less position size and stay sidelining from an entry perspective.BTC-USDT, Monthly Chart, Bitcoin, supreme beauty in motion:BTC-USDT, monthly chart as of February 22nd, 2021.One might think that 58k is high. Especially looking back that Bitcoin at some point could be acquired for less than US$2. Those exposed for a more extended period to this investment vehicle, remember the fierce retracements of up to 80-90%. The future does not have to equal the past. With most of the money from a volume perspective not being allocated yet, we still find an immense potential for much higher price levels than Bitcoin trading right here. Yes, we might find ourselves in a steep retracement once this first bull wave is over. All this should be perceived is as an opportunity and not feared of Bitcoin going away. It won’t.With second legs typically being much larger than the first and a three-leg advancement being modest, we find our projections conservative.Bitcoin, supreme beauty in motion:In times where hyperinflation again destroys much that some hoped for and others worked for, by over-borrowing, the need for a barter method that cannot be diluted, Bitcoin fits like a glove. Its mathematical standard of limitation to the number of twenty-one million allows for the trust given not to be disappointed. Like times where we had the gold standard, one can rely on its stability. It found its stable place alongside precious metals to be a safe haven and a way to continue doing business and measure one’s wealth against. Its mathematical beauty provides the safety and freedom needed to return to truthful value exchange.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|February 22nd, 2021|Tags: Bitcoin, Bitcoin mining, crypto analysis, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

S&P 500 is getting under modest pressure, and technology is to blame. Is the correction about to turn nasty from sideways? Still no signs of that, even as the investment grade corporate bonds are being sold of as hard as long-term Treasuries. Yet, these corporate instruments have only now broken below their late Oct lows – unlike long-dated Treasuries, whose price action resembles free fall.These government debt instruments are arguably the key asset class for every precious metals investor to watch. What used to be gentle decoupling signs over the latest weeks and months, got thoroughly tested the prior week. Yet, I stood firm in not calling gold down and out. The support zone at late Nov lows generated a rebound that was oh so likely to materialize.Silver naturally outperformed, both copper and oil had a strong day, and agrifoods are making new highs. The inflation dynamics described in Friday‘s article aptly called Why the Sky Is Not Falling in Precious Metals, continues unabated, and the pressure keeps building inside the metals and commodities. Not even the dollar managed to benefit from the rising yields – the resumption of its bear market I called on Feb 08, is one of the 2021 themes. Money keeps flowing from the Treasuries market, and there is plenty sitting on the sidelines (corporate or private) to still deploy and power stocks and precious metals higher. Also those ready to withstand Bitcoin volatility (hello, the weekend Elon Musk tweet follow through), stand to benefit – cryptos are behaving like a store of value, a hedge against currency debasement. I wrote in my very first 2021 analysis that the Bitcoin correction wouldn‘t get far.Powell‘s testimony is about to bring volatility, but does it have the power to change underlying trends? Not really – while his latest high profile assessments brought about a downswing, stocks recovered in spite of the GameStop (contagion?) drama too. Should we see a replay of the above, new highs are coming – and they are, in both stocks and precious metals. We‘re in a commodities supercycle on top!Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe daily chart shows yesterday‘s turn of events clearly. The volume increased, indicating that the bulls will need to grapple with more downside.Both the advance-decline line and advance-decline volume have curled noticeably, yet new highs new lows continues higher. That‘s a confirmation of the broad based nature of the stock market advance, further illustrated with the following chart.What if all the constituent shares in the S&P 500 had equal weight (i.e. there is no $NYFANG)? The above chart is the reflection – and it‘s challenging the latest highs. The rotation theme I‘m discussing so often, means in this case taking the baton from tech, and seeing it pass to value stocks. Such broad advance is a healthy characteristic of bull runs far from making a top.TechnologyHere is the culprit behind yesterday‘s decline – on increasing volume, technology (XLK ETF) has plunged. Yet it‘s the semiconductors (XSD ETF) that I am looking at for clues as to how reasonable has the decline been. And given how the tech is holding up, it‘s a bit accentuated.Credit MarketsHigh yield corporate bonds to short-term Treasuries (HYG:SHY) ratio is still behaving reasonably – the overlaid S&P 500 prices (black line) aren‘t accelerating to the downside. Thus far, everything keeps pointing to stocks behaving a bit more sensitively than throughout 2021 mostly, yet far from crashing or showing their readiness to. The real correction has to wait still – this is not the real deal.Gold, Silver and TreasuriesGold price action indeed proved not to be as bearish. Finally, we‘re seeing a clear refusal to move down even as Treasury yields continue to plunge. How long will this new dynamics stick, where would it take the yellow metal? I treat it as a valuable first swallow.The scissors between gold and silver keep widening, and the white metal again outperformed yesterday. That‘s exactly the dynamics of the new precious metals upleg that I‘m expecting.Both depicted miners to gold ratios show a clear pattern of post Nov resilience. GDX:GLD is not breaking to new lows, while $HUI:$GOLD rejected them. Bobbing around, searching for a local bottom before launching higher? That‘s my leading scenario.SummaryThe unfolding correction got a new twist with yesterday‘s downswing in stocks, and unless tech gets its act together, appears set to run further. Emerging markets fell harder than the Russell 2000 yesterday, which is another proof that the correction isn‘t yet over.Gold and silver price action remain encouraging, and the same can be said about oil and many other commodities. Once the stimulus bill is passed, the positive fundamentals that are going to turn even more so, given the Fed‘s accomodative policies. Will these work to stave off the rising Treasury yields as well? If so, then gold‘s fundamentals got a crucial boost, which would soon be seen in the technicals too. As I wrote yesterday, the metals didn‘t get a knock-out blow – the medium- and long-term outlook remains bright, and too many market players on the short side in the short run, means a high likelihood of a reversal – which is precisely what we saw.

USD turns volatile as Powell testifies to CongressEURUSD Perched In Resistance Area The euro currency is strongly consolidating within the resistance levels of 1.2177 and 1.2144.Price action managed to rise to the upper level of the range before giving back the gains. The volatility in the tight range comes as the Federal Reserve Chairman Jerome Powell testifies to Congress.A breakout above 1.2177 could open the way for the common currency towards wider gains. This will potentially see price action rising to test the highs from January this year.Alternately, if prices fail near the resistance level then we expect a move back lower.To the downside, support at 1.2050 should hold the declines for the moment.The British pound sterling, which has already seen a strong bull run got another boost on Tuesday.The UK Government prepared a roadmap towards re-opening its economy. This puts further upside pressure on the currency pair which is already enjoying a strong rally.Price action is trading outside the rising price channel currently. With the Stochastics oscillator firmly in the overbought levels, the upside momentum could fail.Any downside corrections could stall near the 1.3951 level of support for the moment.Given that the currency pair has been pushing higher on a steady note, we could expect a brief pullback in the near term.WTI Crude Oil Pulls Back From A New 13-Month High Oil prices surged higher intraday on Tuesday. Prices tested a new 13-month high of 62.96 in the early Asian trading session.However, since then, oil prices gradually drifted back lower. The test of support near 60.87 confirms that prices are well supported at this level.However, for the short term, oil prices will need to breakout higher and continue further to maintain the bullish trend.The Stochastics oscillator on the four-hour chart is also likely to signal another push to the upside.For the moment, the line in the sand is the 60.87 technical support. If oil prices lose this support, then we expect a deeper correction down to 57.35 or toward the 19 Feb lows of 58.56.Gold Gains Slow As Price Approaches 1817.79 The precious metal pulled back just a few points away from the 1817.79 level of technical resistance.The Stochastics oscillator which is currently signaling a hidden bearish divergence could see a continuation in price to the downside.This is unless, of course, the precious metal manages to breakout above the 1817.79 price level. Such a move will potentially open the way toward the 1850 handle.Meanwhile, if prices drift lower then we could expect a move closer to the 1764 level of support. However, it is unlikely that this level of support will be tested once again.

What a day that was. What started off looking like a sea of red not seen in months ended with the Dow and S&P in the green.It was an overdue plummet- at least that’s what I thought at the start of the day. The Dow was down 360 points at one point, and the Nasdaq was down 3%.But by the end of the day, Jay Powell played the role of Fed Chair and investor therapist and eased the fears of the masses.The Dow closed up, the S&P snapped a 5-day losing streak, and the Nasdaq only closed down a half of a percent!You really can’t make this up.The day started gloomily with more fears from rising bond yields.Sure, the rising bonds signal a return to normal. But they also signal inflation and rate hikes from the Fed.But Powell said “not so fast” and eased market fears.“Once we get this pandemic under control, we could be getting through this much more quickly than we had feared, and that would be terrific, but the job is not done,” Powell said .He also alluded to the Fed maintaining its commitment to buy at least $120 billion a month in U.S. Treasuries and agency mortgage-backed securities until “substantial further progress is made with the recovery.While the slowdown (I’d stop short of calling it a “downturn”) we’ve seen lately, namely with the Nasdaq, poses some desirable buying opportunities, there still could be some short-term pressure on stocks. That correction I’ve been calling for weeks may have potentially started, despite the sharp reversal we saw today.Yes, we may see more green this week. But while I don’t foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of Q1 could happen.Bank of America also echoed this statement and said, “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and as good as it gets’ earnings revisions.”With more earnings on tap for this week with Nvidia (NVDA) on Wednesday (Feb. 24) and Virgin Galactic (SPCE) and Moderna (MRNA) on Thursday (Feb. 25), buckle up.The rest of this week could get very interesting.Look. Don’t panic. We have a very market-friendly monetary policy, and corrections are more common than most realize. Corrections are also healthy and normal market behavior, and we are long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017), and we haven’t seen one in a year.A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- To Buy or Not to Buy?Figure 1- Nasdaq Composite Index $COMPWhat a difference a few weeks can make!Before, I was talking about the Nasdaq’s RSI and to watch out if it exceeds 70.Now? As tracked by the Invesco QQQ ETF , the Nasdaq has plummeted by 4.5% since February 12 and is trending towards oversold levels! I hate to say I’m excited about this recent decline, but I am. This has been long overdue, and I’m sort of disappointed it didn’t end the day lower.Now THAT would’ve been a legit buying opportunity.While rising bond yields are concerning for high-flying tech stocks, I, along with much of the investing world, was somewhat comforted by Chairman Powell’s testimony. Inflation and rate hikes are definitely a long-term concern, but for now, if their inflation target isn’t met, who’s to fight the Fed?Outside of the Russell 2000, the Nasdaq has been consistently the most overheated index. But after today, I feel more confident in the Nasdaq as a SHORT-TERM BUY.But remember. The RSI is king for the Nasdaq . If it pops over 70 again, that makes it a SELL in my book.Why?Because the Nasdaq is trading in a precise pattern.In the past few months, when the Nasdaq has exceeded 70, it has consistently sold off.December 9- exceeded an RSI of 70 and briefly pulled back.January 4- exceeded a 70 RSI just before the new year and declined 1.47%.January 11- declined by 1.45% after exceeding a 70 RSI.Week of January 25- exceeded an RSI of over 73 before the week and declined 4.13% for the week.I like that the Nasdaq is below the 13500-level, and especially that it’s below its 50-day moving average now. I also remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.But the pullback hasn’t been enough.Because of the Nasdaq’s precise trading pattern and its recent decline, I am making this a SHORT-TERM BUY. But follow the RSI literally.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

The Powell inspired, coinciding (have your pick) S&P 500 stop run is almost history now, with the futures trading over 3,880 again as we speak. No surprise here, but since the long-term Treasuries plunge went on largely unabated, that‘s concerning.Even if not now as in right away, TLT and TLH have to power to trouble the stock bulls seriously. And the financials benefiting from the greater spread, won‘t save the day, as the key chart to watch now is technology and also healthcare. Healthcare especially because biotech didn‘t get its act together yesterday really, while semiconductors did better. With consumer discretionaries hurt, utilities and consumer staples can‘t be relied on in a rising rates environment, and communications can‘t save the day either. The sectoral outlook remains mixed, even as value continues greatly outperforming growth this month. The stock bulls simply need tech clearly stabilized and turning here so as to think about new S&P 500 highs again. Long-term Treasuries are starting to hold greater sway over the stock market fate now, too. The dollar‘s woes thus far continue playing out largely in the background.Did gold shake off the TLT shackles? Still early to say, but the clear, directionally opposite move gives the bulls benefit of the doubt thus far. Yesterday‘s gold session didn‘t convince me, so I am not trumpeting the end of yellow metal‘s downside yet. Still, cautious optimism remains – even in the short run, let alone for the medium- to long-term: there, the (bullish) picture is simply clearer.Let‘s remember my yesterday‘s words about trends and flashes in the pan:(…) Powell‘s testimony is about to bring volatility, but does it have the power to change underlying trends? Not really – while his latest high profile assessments brought about a downswing, stocks recovered in spite of the GameStop (contagion?) drama too. Should we see a replay of the above, new highs are coming – and they are, in both stocks and precious metals. We‘re in a commodities supercycle on top!Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookYesterday‘s intraday reversal reached just a little above Monday‘s closing prices, highlighting that more needs to be done for the index to regain upside momentum. The Powell testimony reversal was a good start, and stock bulls need to do more once this event gets in the rear view mirror later today. Given the premarket action reaching 3,890, the case is not lost.Credit MarketsHigh yield corporate bonds (HYG ETF) recovered, and crucially did better than stocks. The volume comparison is also a tad more positive. Should this credit market outperformance in the short run hold, then the S&P 500 is more likley to advance than not, too.High yield corporate bonds to short-term Treasuries (HYG:SHY) ratio is still behaving reasonably – the overlaid S&P 500 prices (black line) aren‘t accelerating to the downside. The cue to move higher in stocks is apparent.TechnologyIt‘s the tech (XLK ETF) again – its yesterday‘s reversal is not nearly enough for the S&P 500 to think about taking on new highs. Semiconductors (XSD ETF) subtly outperformed, but they don‘t give outrageously bullish signs either. The tech jury is still out, and this heavyweight sector remains vulnerable, with consequences to the S&P 500 if it doesn‘t keep on the muddle through recovery path at the very least.Treasuries and DollarNo spike in TLT volume shows there isn‘t real willingness to buy the dip the way it were in mid Feb – back then, I could call for a moderation in the decline‘s pace for at least a day, now I can‘t do that. This chart presents the greatest challenge for the markets – going well beyond stocks, precious metals and commodities. Dollar bulls are predictably on the run. Truly bearish chart targeting much lower lows, in line with the theme I‘ve been banging throughout 2020‘s latter half – the dollar has gotten on the defensive, and would remain there throughout 2021. The technical rebound is over, and not even higher yields can help the greenback much.Gold, Silver and PlatinumTrue, gold‘s yesterday‘s candle leaves much to be desired for the bulls, but once again, we‘re seeing a clear refusal to move down even as Treasury yields continue to plunge. It‘s still a valuable first swallow, and more has to follow. Gold isn‘t getting anywhere in today‘s premarket while silver, copper, oil and soybeans are all up mildly. Agrifoods reached a new 2021 high yesterday – commodities clearly like and anticipate the inflationary Fed speak message they get.One look at the precious metals group – gold the laggard, silver leading, and platinum even more so – check out on the caption when the latter decoupled – 2 weeks before silver did. The anatomy of the unfolding precious metals upleg goes on in this predictable fashion, where platinum has the power to keep running more along the lines of commodities such as copper. That means powerfully.Yesterday‘s watchout though are the miners, which dragged down both the $HUI:$GOLD and GDX:GLD ratios – not below their lows, but still. A great illustration of the yellow metal‘s woes, and low credibility of its yesterday‘s candle with a sizable lower knot.SummaryStock bulls are far out of the woods yet, and technology stabilization must kick in first. Little proof thus far it‘s there, and I view the rising rates as starting to bite the stock market too.Gold and silver also got under the Powell pressure yesterday, and haven‘t escaped the confines of Treasury yields pressure thus far. The markets are clearly wary of the testimony‘s part II still.

As U.S. Treasury yields rise, gold, which is seen as an inflation hedge, is hurting. Despite the obvious warning signs, investors remain bullish.After Monday’s (Feb. 22) supposedly “groundbreaking” rally, the situation in gold developed in tune with what I wrote yesterday . The rally stopped, and miners’ decline indicated that it was a counter-trend move.Figure 1Despite Monday’s (quite sharp for a daily move) upswing, the breakdown below the neck level of the broad head-and-shoulders remains intact. It wasn’t invalidated. In fact, based on Monday’s rally and yesterday’s (Feb. 23) decline, it was verified. One of the trading guidelines is to wait for the verification of the breakdown below the H&S pattern before entering a position.What about gold stocks ratio with other stocks?Figure 2It’s exactly the same thing. The breakdown below the rising long-term support line remains intact. The recent upswing was just a quick comeback to the broken line that didn’t take it above it. Conversely, the HUI to S&P 500 ratio declined once again.Consequently, bearish implications of the breakdowns remain up-to-date . Having said that, let’s consider the more fundamental side of things.Swimming Against the CurrentAfter trading lower for six consecutive days, gold managed to muster a three-day winning streak. However, with the waves chopping and the ripple gaining steam, every swim higher requires more energy and yield’s decelerating results.For weeks , I’ve been warning that a declining copper/U.S. 10-Year Treasury yield ratio signaled a further downside for gold. And with the ratio declining by 2.88% last week, gold suffered a 2.51% drawdown.Please see below:Figure 3Over the long-term, the ratio is a reliable predictor of the yellow metal’s future direction. And even though the weekly reading (3.04) hit its lowest level since May 2020, it still has plenty of room to move lower.Figure 4For context, I wrote previously:To explain the chart above, the red line depicts the price of gold over the last ~21 years, while the green line depicts the copper/U.S. 10-Year Treasury yield ratio. As you can see, the two have a tight relationship: when the copper/U.S. 10-Year Treasury yield ratio is rising (meaning that copper prices are rising at a faster pace than the U.S. 10-Year Treasury yield), it usually results in higher gold prices. Conversely, when the copper/U.S. 10-Year Treasury yield ratio is falling (meaning that the U.S. 10-Year Treasury yield is rising at a faster pace than copper prices), it usually results in lower gold prices.As the star of the ratio’s show, the U.S. 10-Year Treasury yield has risen by more than 47% year-to-date (YTD) and the benchmark has surged by more than 163% since its August trough.Please see below:Figure 5On Jan. 15 , I warned that the U.S. Federal Reserve (FED) had painted itself into a corner. With inflation running hot and Chairman Jerome Powell ignoring the obvious, I wrote that Powell’s own polices (and their impact on real and financial assets) actually eliminate his ability to determine when interest rates rise.As a result, the central bank had two options:If they let yields rise, the cost of borrowing rises, the cost of equity rises and the U.S. dollar is supported (all leading to shifts in the bond and stock markets and destroying the halcyon environment they worked so hard to create).To stop yields from rising, the U.S. Federal Reserve (FED) has to increase its asset purchases (and buy more bonds in the open market). However, the added liquidity should have the same net-effect because it increases inflation expectations (which I mentioned yesterday, is a precursor to higher interest rates). Opening door #2, Powell’s deny-and-suppress strategy is now playing out in real time. On Feb. 23 – testifying before the U.S. Senate Banking Committee – the FED Chairman told lawmakers that inflation isn’t an issue.“We’ve been living in a world for a quarter of a century where the pressures were disinflationary,” he said.... “The economy is a long way from our employment and inflation goals.”And whether he’s unaware or simply ill-informed, commodity prices are surging. Since the New Year, oil and lumber prices have risen by more than 24%, while corn and copper prices are up by more than 14%.Please see below:Figure 6In addition, relative to finished goods, the entire basket of inputs is sounding the alarm.Figure 7To explain the chart above, the blue line is an index of the price businesses receive for their finished goods. Similarly, the green line is an index of the price businesses pay for raw materials. As you can see, the cost of doing business is rising at a torrent pace.More importantly though, Powell’s assertion that inflation is an urban legend has been met with eye rolls from the bond market . To repeat what I wrote above: Powell’s own policies (and their impact on real and financial assets) actually eliminate his ability to determine when interest rates rise.Case in point: the U.S. 10-year to 2-year government bond spread is now at its highest level since January 2017.Please see below:Figure 8To explain the significance, the figure is calculated by subtracting the U.S. 2-Year Treasury yield from the U.S. 10-Year Treasury yield. When the green line is rising, it means that the U.S. 10-Year Treasury yield is increasing at a faster pace than the U.S. 2-Year Treasury yield. Conversely, when the green line is falling, it means that the U.S. 2-Year Treasury yield is increasing at a faster pace than the U.S. 10-Year Treasury yield.And why does all of this matter?Because the above visual is evidence that Powell has lost control of the bond market.At the front-end of the curve, Powell can control the 2-year yield by decreasing the FED’s overnight lending rate (which was cut to zero at the outset of the coronavirus crisis). However, far from being monolithic, the 5-, 10-, and 30-year yields have the ability to chart their own paths.And their current message to the Chairman? “We aren’t buying what you’re selling.” As such, the yield curve is likely to continue its steepening stampede.Circling back to gold, all of the above supports a continued decline of the copper/U.S. 10-Year Treasury yield ratio. With yields essentially released from captivity, even copper’s 8.02% weekly surge wasn’t enough to buck the trend.As a result, gold’s recent strength is likely a mirage. The yellow metal continues to bounce in fits and starts, thus, it’s only a matter of time before the downtrend continues. Furthermore, with the USD Index still sitting on the sidelines, a resurgent greenback would add even more concrete to gold’s wall of worry.And speaking of gold’s wall of worry, the sentiment surrounding it is far from being negative.Figure 9 - Source: Investing.comThe above chart shows the sentiment of Investing.com’s members. 64% of them are bullish on gold. As you can see above, there are also other popular markets listed: the S&P 500, Dow Jones, DAX, EUR/USD, GBP/USD, USD Index, and Crude oil. The sentiment for gold is the most bullish of all of them. Yes, the general stock market is climbing to new all-time highs every day now, and yet, people are even more bullish on gold than they are on stocks.When gold slides, the sentiment is likely to get more bearish and particularly high “bearish” readings – say, over 80% would likely indicate a good buying opportunity. Naturally, this is not the only factor that one should be paying attention to.The bottom line? As it stands today, being long the precious metals offers a poor risk-reward proposition. However, in time (perhaps over the next several months), the dynamic will reverse, and the precious metals market will shine once again.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Falling Bonds and rising yields are creating a condition in the global markets where capital is shifting away from Technology, Communication Services and Discretionary stocks have suddenly fallen out of favor, and Financials, Energy, Real Estate, and Metals/Miners are gaining strength.  The rise in yields presents an opportunity for Banks and Lenders to profit from increased yield rates. In addition, historically low interest rates have pushed the Real Estate sector, including commodities towards new highs.  We also note Miners and Metals have shown strong support recently as the US Dollar and Bonds continue to collapse.  The way the markets are shifting right now is suggesting that we may be close to a technology peak, similar to the DOT COM peak, where capital rushes away from recently high-flying technology firms into other sectors (such as Banks, Financials, Real Estate, and Energy).The deep dive in Bonds and the US Dollar aligns with the research we conducted near the end of 2020, which suggested a market peak may set up in late February. We also suggested the markets may continue to trade in a sideways (rounded top) type of structure until late March or early April 2021.  Our tools and research help us to make these predictions nearly 4 to 5+ months before the markets attempt to make these moves.  You can read this research here:2021 MAY BE A GOOD YEAR FOR THE CANNABIS/MARIJUANA SECTORPRICE AMPLITUDE ARCS/GANN SUGGEST A MAJOR PEAK IN EARLY APRIL 2021 – PART IIWHAT TO EXPECT IN 2021 PART II – GOLD, SILVER, AND SPYIf our research is correct, we may have started a “capital shift” process in mid-February where declining Bonds, rising yields and the declining US Dollar push traders to re-evaluate continued profit potential in the hottest sectors over the past 6 to 12+ months.  This would mean that Technology, Healthcare, Comm Services and Discretionary sectors may suddenly find themselves on the “not so hot” list soon.Bonds Collapsing While Yields Continue To RiseThe following TLT Weekly chart highlights the extended downward trend taking place in Treasury Bonds.  This downside pricing pressure would usually support a rising stock market and moderately weaker precious metals.  But given the way the US Dollar is also declining, we are seeing fear become more of an issue as the high-flying stock market starts to look quite a bit over valued.  Rising yields also puts Financials and banking/lending near the top of the list for future profit potential.US Dollar Struggling To Find SupportThe Invesco US Dollar ETF, (UUP) Weekly below chart shows how weak the US Dollar has been after the COVID-19 price rotation.  The continued decline in price levels after May 2020 is a very clear indication that the US Dollar is reacting to the continued stimulus efforts as well as the decreased economic expectations.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!Combined, the Bonds and US Dollar decline are raising the fear-factor among global investors and causing many to rethink where future growth and profits will originate.  Many are landing on the Financial and Energy sectors right now.Financial Sector Begins To Skyrocket HigherThe following Direxion Financial Bull 3x ETF (FAS) Weekly chart shows the incredible advance in the Financial Sector over the past 6+ months.  Almost like a sleepy rally, Financials have been rallying while traders have been focused on Technology, Healthcare and other sectors that seemed hot.  This shifting trend in sectors, and the associated shifting capital, suggests we may be nearing a tidal shift in sector trends – moving away from Technology and into Financials, Energy, Real Estate, and others.Volatility is still 2x to 3x what we have seen 4 to 5+ years ago.  This suggests any breakdown in trends could prompt a very volatile price correction/transition.  As sectors continue to shift, we urge traders to pay attention to the risks in the markets related to this elevated volatility which seems to be present in every sector. We believe we may be starting an extended “capital shift” process which may last well into March/April 2021 before real opportunities setup possibly in May or June.  The markets will do what they always do, react to traders, capital, and global central bank influence.  There are times when certain sectors enter a euphoric phase and there are times when the global markets revalue risk.  We may be nearing an end to a euphoric phase and starting a revaluation phase. This means many various sectors and symbols will present some very real opportunities for profits over the next few weeks and months.  Marijuana, Cryptos, Metals, Miners, Financials & Real Estate appear to be leading opportunities related to sector trends.  If these trends continue throughout 2021, we may see a revaluation/capital shift to propel these trends higher.Don’t miss the opportunities in the broad market sectors over the next 6+ months, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Learn how the BAN strategy can help you spot the best trade setups because staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Have a great rest of the week!

USD fights back from a five-week lowEuro Trades Subdued But Supported By The Trend-Line The euro currency is trading rather mixed, a day after prices almost closed flat on Tuesday.Overall, the long-term trendline on the daily chart is supportive of prices. Therefore, we could see price action attempt to push higher.The 50-day moving average is also close and could come in as dynamic support. For the near term though, the EURUSD currency pair will need to close convincingly above the resistance area of 1.2177 and 1.2144.This resistance area is proving hard to break out in the near term. Therefore, there is a very good chance that the EURUSD might remain in a sideways range for now.To the downside, the 1.2050 level will hold the currency pair from posting further declines.The British pound sterling rose to a fresh three-year high at 1.4140. But prices were rejected intraday with the currency pair likely to close bearish or flat.Given that this pattern comes near the top end of the rally, it could potentially signal the start of a correction in the GBPUSD.The cable has not made any decent pullbacks so far. Therefore, a close below Tuesday’s low of 1.4055 could spell trouble.For the moment, prices might test the support area near 1.3950. This would mark a short-term correction in price action.The Stochastics has also moved out from the overbought levels but could signal a reversal once again.Crude Oil Rises Over 3%, Inching Closer To A Two-Year High Oil prices managed to shrug off the uncertainty of the past few days with price action once again surging.On an intraday basis, spot crude oil prices rose over 3% in what is likely to be a strong recovery. The gains come after oil prices closed bearish last week.However, at the time of writing, crude oil has managed to pare last week losses to rise higher.On the intraday charts, oil prices are yet to close fully above the previous highs of 62.97. But given the bullish momentum, we could expect to see further gains.The only downside scenario here is to see oil prices pulling back. This would mark a failure near the short-term trendline and could open the way to the downside.The support near 60.87 remains critical under such circumstances.Gold Prices Likely To Close Bearish For A Second Day The precious metal is failing to capitalize on the support level it established near the 1764 handle. Prices are falling for the second day, albeit the pace of declines is limited in comparison.To the upside, the reversal comes just a few points below the 1817.80 level. Given that this level was already established as resistance, we expect prices to hold between the two levels for the moment.On the weekly chart, we have the double bottom pattern that has formed around the 1764 handle.Therefore, a breakout above 1817.80 is needed to keep the bullish bias alive.A close above 1817.80 will open the way for gold prices to challenge the 1850 handle next.

One factor supporting our theory that Silver will find itself in its next leg up is the early release data from “The Silver Survey 2021” (a significant annual report from “The Silver Institute” in conjunction with the research firm “Metals Focus”). Their research suggests a total demand increase to an eight-year high of 1,025 billion ounces of Silver.Suppose you think of ease of covid as a catalyst. In that case, that to one side will provide more supply in the mining industry workers to return to their workplace, the other side of demand easily outweighs through a whole world returning to business as usual.Suppose demand from Solar cells to jewelry, from physical investments to Wall Street traded silver products generally increase. In that case, we find our temporary sideways range breather soon to break out above US$30 to enter the next up leg.Daily Chart of Silver in US-Dollar, Slowly but surely:Silver in US Dollar, daily chart as of February 25th, 2021.As you can see on the daily chart, Silver is starting to push higher through its smaller ranges within the range to prepare for a breakout and obeying the trendline (yellow dotted line) as directional support.  Gold/Silver-Ratio, Weekly Chart, The ratio suggests for Silver to catch up:Gold/Silver-Ratio, weekly chart as of February 25th, 2021.Once desperate bears have to give way to Silver’s real value and demand, we most likely see price-advances much more significant than generally assumed.Silver in US-Dollar, Daily Chart, And the future is bright, Silver, when everything fits:Silver in US Dollar, daily chart as of February 25th, 2021.The last eleven month’s price advances might seem staggering regarding percentage. Especially if you consider that a physical ounce of Silver is currently sold around US$40. Hence, we still see Silver prices reaching three-digit numbers at some point in the next few years. Midterm projections already show Silver prices sitting right above major support from a volume based analysis. And linear regression channel projection points at substantial advances within this year.Silver, when everything fits:We find ourselves in an uptrend in Silver. It just has established its first foundation and has a great range of expansion to offer. Consequently, this results in an excellent risk/reward-ratio for participation. In addition, fundamental long-term data supports the sustainability of that trend. Most importantly a world fiscal policy forces investor into safe havens. Also, the Gold/Silver-Ratio suggests Silver to be the underdog with much ground to catch up. We might see Silver prices in an entirely different echelon in the not too far distant future.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|February 25th, 2021|Tags: low risk, Silver, silver bull, Silver Chartbook, technical analysis, time frame, trading principles|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

Powell testimony is over, with markets rejoicing the promise of still accomodative Fed. Value keeps surging over growth, and regardless of yesterday‘s great performance, tech has a vulnerable feel to it – semiconductors lead higher, fine, but communications didn‘t confirm, and the healthcare-biotech dynamic isn‘t painting an outperformance picture either. Real estate isn‘t taking as strong a cue while consumer discretionaries recovery could also be stronger. Thus far though, no need to think about taking losses to optimize your gains elsewhere.Just as I wrote yesterday:(…) the financials benefiting from the greater spread, won‘t save the day, as the key chart to watch now is technology and also healthcare. … The sectoral outlook remains mixed, even as value continues greatly outperforming growth this month. … Long-term Treasuries are starting to hold greater sway over the stock market fate now, too. The dollar‘s woes thus far continue playing out largely in the background.Did gold shake off the TLT shackles? I‘m getting increasing doubts that only a strong move to the upside would dispel. As long-term Treasuries were staging an intraday reversal, gold took an intraday plunge before recovering. Not a good sign of internal intraday strength. Could it be a bullish flag? Still possible, but again, gold would have to rally from here. Doing so would result in a bullish divergence in its daily indicators.The precious metals sectoral dynamics remains positive though – silver and platinum are bullishly consolidating, and as I‘ll show you in today‘s final chart, the many mining indices are doing fine as well. The overly strong reflationary (I would call a spade a spade, and say inflationary) efforts are driving commodities higher in a supercycle just starting out.Not to get complacent, GameStop (GME) squeeze has made a comeback yesterday. Will it coincide with broader stock market woes on par with late Jan? Way too early to say – let‘s jump right into the charts for an objective momentary view instead.Here they are, all courtesy of www.stockcharts.com.S&P 500 and Its InternalsStrong S&P 500, everything looks fine on the surface – just as should be, befitting buy the dip mentality. Strong volume, no meaningful intraday setback, so far so good.The equal weight S&P 500 chart is looking better and better day by day. New highs, strong uptrend, broadening leadership. It‘s a mirror reflection of the big names‘ woes, and a testament to value outperforming growth. This bull run is far from making a top.Credit MarketsHigh yield corporate bonds (HYG ETF) had a good day yesterday, and so did the high yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio. Yet it‘s the daily stock market outperformance that is noticeable here – optimistic sign of an all clear signal. I‘m not taking it totally at face value given tech performance – in a short few days, I can easily become more convinced though.TechnologyStrong daily tech (XLK ETF) upswing, yet only half the prior downside erased so far, and the volume could be higher compared to the preceding downswing. Semiconductors (XSD ETF) are leading again, fine. Yet it‘s the heavyweight names that matter the most to me right now – check out yesterday‘s observations:(…) The tech jury is still out, and this heavyweight sector remains vulnerable, with consequences to the S&P 500 if it doesn‘t keep on the muddle through recovery path at the very least.DollarLook how little the Powell tremors achieved – the dollar bulls are still on the run. Upswings are being sold as the greenback remains on the defensive, targeting much lower lows this year. The technical rebound is over, and not even higher yields can help the greenback much.Gold, Silver and MinersFor a second day in a row, gold‘s performance isn‘t convincing – the willingness to clearly and directionally decouple from rising yields, is being questioned. On the other hand, e.g. the 10-year UST yield is approaching the summer 2019 lows – it‘s at 1.38% now. I‘m looking for the rising rates to slow down and possibly even pull back a little from here over the coming weeks. Or would the market just like to slice through that resistance? Inflation isn‘t universally that strong right now yet I think – just look at the velocity of money.Everything silver related is doing fine, silver miners (SIL ETF) rebounded strongly, First Majestic Silver Corp (AG) and Hecla (HL) are in clearly bullish patterns. The white metal‘s every dip is being bought, the silver-to-gold ratio keeps improving, and even gold juniors (GDXJ) started once again outperforming the seniors (GDX). The bullish signals under the surface keep increadingly more coming to the fore, and the miners to gold ratio‘s ($HUI:$GOLD and GDX:GLD) is the final ingredient missing.SummaryStock bulls did great yesterday, but everything isn‘t fine yet in the tech realm. Due to its sheer weight in the S&P 500 index, pulling the cart a bit more enthusiastically is what the 500-strong index needs to take on new highs, because value stocks can‘t do it all.Gold and silver fared mostly well during the Powell testimony part II, yet gold didn‘t convince me really again. I look for the yellow metal bulls to get tested soon. The wildcard is reaction to the rising Treasury yields as they‘re in a key resistance zone of summer 2019 lows overall (10-year approaching it, and as regards 30-year, it‘s been overcome already). Plunging dollar and short-term gold-dollar correlation moving to positive figures, isn‘t a pleasant sight for coming days.

Powell testified before Congress and reiterated the Fed’s dovish stance, but nevertheless, gold continued to slide.On Tuesday, Powell testified before the United States Senate Committee on Banking, Housing, and Urban Affairs. He offered no big surprises, so the markets were little changed. But the price of gold ended that day with a slight loss, as the chart below shows – perhaps just because Powell didn’t surprise, and struck a dovish tone.Anyway, what did the Fed Chair say? In his prepared remarks, Powell acknowledged the improved outlook for later this year . As I noted in the last edition of the Fundamental Gold Report about the recent FOMC minutes , a more optimistic Fed about the U.S. economy is bad news for gold.Additionally, Powell downplayed concerns about the recent rises in the bond yields (see the chart below), calling them “a statement of confidence” for an improving U.S. economic outlook, or “a robust and ultimately complete recovery”. This is also a negative comment for the yellow metal, as it would prefer the Fed reacting more aggressively to the increasing rates, and, for instance, implementing the yield curve control . The higher the yields, the worse it is for gold, which is a non-interest bearing asset.However, Powell also made some dovish comments . First of all, he reiterated that the Fed’s easy stance will last very long – longer than it used to be in the past . This is because the Fed implemented last year a new monetary framework, according to which the U.S. monetary policy will be informed by the assessments of shortfalls of employment from its maximum level, rather than by deviations from its maximum level. Moreover, the Fed will seek to achieve inflation that averages two percent over time. These changes imply that the Fed will not tighten monetary policy solely in response to a strong labor market, but only to an increase in inflation . However,But inflation must not merely reach two percent – it should rise moderately above two percent for some time in order to prompt the U.S. central bank to taper the quantitative easing and hike the federal funds rate .The second reason why the interest rates will stay lower for longer is that the economy is a long way from the Fed’s employment and inflation goals, and “it is likely to take some time for substantial further progress to be achieved”. On Wednesday, Powell acknowledged that it may take more than three years to reach these goals. This means that the Fed will treat any possible increases in inflation this year as temporary and will leave interest rates unchanged.Implications for GoldWhat does Powell’s testimony imply for the gold market? Well, gold bulls may be disappointed as the Fed Chair didn’t sound too dovish . He neither announced an expansion in the quantitative easing, nor the yield curve control, nor negative interest rates , nor a “whatever it takes” approach. And it seems that the yellow metal needs such things right now in order to survive – just like fish need water.However, the rising bond yields could become a problem at one point for the Fed. If they continue to rise, Uncle Sam will not be happy, and the Fed will have to step into the market to buy government bonds. The central bank and Treasury are good old friends and the close relationship between Powell and Yellen may only strengthen this beautiful friendship – and support gold prices.Moreover, the increasing bond yields (despite an ultra-dovish Fed) imply that reflation trade is strong. So far, investors just expect a return of inflation to a moderate level, but given the enormous surge in the broad money supply (see the chart below) and Biden’s mammoth fiscal plan, the risk of overheating is non-negligible.It would be really strange if such an aggressive monetary expansion wouldn’t affect the prices. As one can see, the growth in the M2 money supply is 2.5 times faster than during the Great Recession . Actually, we are already seeing inflation – but in the asset markets, not the CPI . The stock and house prices are surging. The commodity sector has also already been gaining and gold may follow suit .If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care

USD gives back gains as risk currencies riseEuro Rises To A Three-Month High The euro currency finally broke past the resistance area of 1.2177 – 1.2144. The breakout pushed the common currency to a three-month high on an intraday basis.The gains come as the US dollar failed to maintain its reversal on Wednesday.If the current momentum continues then we might get to see the Euro once again attempting to test the 6 January highs of 1.2349.However, ahead of these gains, a pullback to establish support near 1.2177 would be ideal.For the moment, the EURUSD is still not out of the woods unless we see a higher low forming above the resistance area.The British pound sterling is giving back the gains from Wednesday. The declines come as the cable rose to a new three and half year high earlier this week.The current declines come as investors head into the weekend with the drop likely coming as a result of profit-taking.The GBP currency has enjoyed a strong rally and got an additional boost as the UK is already preparing plans for re-opening its economy.For the moment the pullback is likely to be met with skepticism. A continuation below Wednesday’s low of 1.4080 could, however, see the currency pair making a short-term correction.The downside could be supported near the round number 1.4000 level.Crude Oil Holds Steady At A 13-Month High Oil prices are steady after rising to a new 13-month high. The gains come as the latest report shows a drop in US Crude oil output.The weaker dollar is also helping the commodity to maintain its hold. For the moment, prices are supported near the trendline.Still, even a close below the trendline could keep the upside bias intact.The support area near 60.87 will hold the prices from posting further declines.But a close below 60.87 could potentially open the way for oil prices to fall further. This could see the 57.35 level coming under scrutiny next.Gold Prices Slip As Treasury Yields Rise The precious metal continues to trade weak with price action extending declines for a third consecutive day.The declines come as Treasury yields are rising higher. Investors are betting that the global economy will re-open quicker than anticipated with appetite for further stimulus falling.Gold prices have been trading within the 1817 and 1764 levels since the middle of February.We expect this sideways range to continue.To the downside, gold prices will likely retest the previously formed support at 1764.22.

Right from the open, stocks have been losing altitude yesterday, and value couldn‘t indeed overpower the tech slide. Long-dated Treasuries had a climactic day of incomplete reversal on outrageous volume. Regardless of the evidence of asset price inflation, there is almost universal short-term vulnerability, and yesterday‘s broad based selling spanning precious metals and commodities, confirms that. The dollar has been missing from the party though, only having reversed prior losses to close little changed on the day.Are we seeing a trend change, or a time-limited yet powerful push lower? That depends upon the asset – in stocks, I look for the tech big names and healthcare to do worse than value (the VTV:QQQ ratio jumped up greatly through the week, portending the tech issues). Both silver and gold would be under pressure, and I look for the white metal to be mostly doing better overall. Oil and copper would take a breather while remaining in bull markets.That roughly matches my very short-term idea for where the markets would trade, echoing the expressed, tweeted need to watch oil and copper turn the corner still yesterday (copper didn‘t, not confirming any intraday turnaround notions as valid) – the below being written 7hrs before the U.S. open:(…) As yesterday's session moved to a close, the dollar erased opening losses, and went neutral. TLT's massive volume shows that yields are likely to stabilize here for now, and even decline a bit – HYG absolutely didn't convince me. The oil-copper tandem didn't kick in yesterday. Right now, we're in a weak constellation with both silver, oil, and stocks down. Copper's modest uptick doesn't cut it. So, the outlook for the European session on Fri is more bearish than bullish for stocks really, and gold rather sideways in the coming hours. Would we get a bounce during the U.S. session? It‘s possible to the point of likely. The damage done yesterday though looks to have more than a few brief sessions to run to repair. If you were to be hiding in the not too greatly performing S&P 500 sectors before the uptrend reasserts itself, you would be rather fine. The same for commodities and metals which were solidly trending higher before – oil, platinum, copper. E.g. look at yesterday‘s low platinum volume, or at the modest Freeport McMoRan decline – these charts are not broken while I see silver relegated to sideways trading (with a need to defend against the bears sternly) and silver miners taking their time.Just as I wrote yesterday, technology is the most precarious spot as long-term rates are turning and the dollar hasn‘t moved yet. Should it start coming to life (it did yesterday as the 10-year yield retreated from 1.60% back below 1.50%), overcoming the 91 – 91.5 resistance zone, that would help put into perspective the concerted selling we saw yesterday, especially if it continues in future days in similar fashion.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Its InternalsThe Force Index shows that the bears have the upper edge now, and volume coupled with price action, shows no accumulation yet. The chart is worrying for it could reach the Jan lows fast if the sellers get more determined.Credit MarketsHigh yield corporate bonds (HYG ETF) reveal the damage suffered, underlined by the strong volume. High yields in TLT and LQD are starting to have an effect on stocks.Another stressed bond market chart – long-term Treasuries show a budding reversal to the upside. Given yesterday‘s happenings in the 10-year bond auction with the subsequent retreat from high yields since, and the dollar moving over 90.50 as we speak, the signs are in place for the TLT retracing part of the steep slide as well.TechnologyThe momentum in tech (XLK ETF) is with the bears as the 50-day moving average got easily pierced yesterday again. It‘s still the heavyweights that matter (roughly similar to the healthcare situation here), and the sector remains very vulnerable to further downside.VolatilityThe volatility index rose, but is far below the two serious autumn 2020 and the late Jan 2021 corrections. It even retreated on the day, regardless of the heavy S&P 500 selling. Neither the options traders are taking yesterday‘s move as a true game changer, even though it was (for the bond markets). Would the anticipated stock indices rebound today bring it down really substantially, spilling over into commodities too, and show that this indeed wasn‘t a turning point? Gold, Silver and MinersGold didn‘t rise in spite of the falling long-term Treasuries for too long, as Tue and Wed hesitation (which I view with suspicion on both days) was resolved with a strong decline. This time, I am not calling for the yellow metal to rise the way I did a week ago. It‘s that the many precious metals market signals have become less constructive too. Silver is being taken down a notch or two, and the miners are already reflecting that in yesterday‘s close. Silver miners steeply declining, the bullish outperformance of gold juniors vs. gold seniors was lost yesterday. Given the red ink on Thursday already in copper, and its arrival into oil today, the bears are having the short-term (more than several sessions) upper hand. The miners to gold ratio ($HUI:$GOLD and GDX:GLD) as the final ingredient missing, can keep on waiting.SummaryStock bulls got a harsh reality check, and everything isn‘t very fine yet in the tech arena. By the shape of things thus far, today‘s rebound is more likely than not to turn out a dead cat bounce, and more short-term downside remains likely since Monday, regardless of all the value stocks performance.Gold and silver didn‘t escape the bloodbath either, and aren‘t out of the woods – neither gold, nor silver. Treasury yields are taking a good look around, having a chance to stabilize and retreat to a degree, but gold appears unfazed thus far, and the commodities‘ dynamics doesn‘t bode well. On the other hand, the dollar looks getting ready to move higher over the coming days, and thanks to the short-term correlation between the two turning positive, that would help the embattled yellow metal down the road.

Surging bond yields continues to weigh on tech stocks. When the 10-year yield pops by 20 basis points to reach a 1-year high, that will happen.Tuesday (Feb. 23) saw the Dow down 360 points at one point, and the Nasdaq down 3% before a sharp reversal that carried to Wednesday (Feb. 24).Thursday (Feb. 25) was a different story and long overdue.Overall, the market saw a broad sell-off with the Dow down over 550 points, the S&P falling 2.45%, the Nasdaq tanking over 3.50%, and seeing its worst day since October, and the small-cap Russell 2000 shedding 3.70%.Rising bond yields are a blessing and a curse. On the one hand, bond investors see the economy reopening and heating up. On the other hand, with the Fed expected to let the GDP heat up without hiking rates, say welcome back to inflation.I don’t care what Chairman Powell says about inflation targets this and that. He can’t expect to keep rates this low, buy bonds, permit money to be printed without a care, and have the economy not overheat.He may not have a choice but to hike rates sooner than expected. If not this year, then in 2022. I no longer buy all that talk about keeping rates at 0% through 2023. It just can’t happen if bond yields keep popping like this.This slowdown, namely with the Nasdaq, poses some desirable buying opportunities. The QQQ ETF, which tracks the Nasdaq is down a reasonably attractive 7% since February 12. But there still could be some short-term pressure on stocks.That correction I’ve been calling for weeks? It may have potentially started, especially for tech. While I don’t foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of March could happen.I mean, we’re already about 3% away from an actual correction in the Nasdaq...Bank of America also echoed this statement and said, “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and as good as it gets’ earnings revisions.”Look. This has been a rough week. But don’t panic, and look for opportunities. We have a very market-friendly monetary policy, and corrections are more common than most realize.Corrections are also healthy and normal market behavior, and we are long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017), and we haven’t seen one in a year.A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- To Buy or Not to Buy?Figure 1- Nasdaq Composite Index $COMPThis downturn is so overdue. More pain could be on the horizon, but this road towards a correction was needed for the Nasdaq.Before February 12, I would always discuss the Nasdaq’s RSI and recommend watching out if it exceeds 70.Now? As tracked by the Invesco QQQ ETF , the Nasdaq has plummeted by nearly 7% since February 12 and is trending towards oversold levels! I hate to say I’m excited about this recent decline, but I am.While rising bond yields are concerning for high-flying tech stocks, I, along with much of the investing world, was somewhat comforted by Chairman Powell’s testimony the other day (even if I don’t totally buy into it). Inflation and rate hikes are definitely a long-term concern, but for now, if their inflation target isn’t met, who’s to fight the Fed?Outside of the Russell 2000, the Nasdaq has been consistently the most overheated index. But after its recent slowdown, I feel more confident in the Nasdaq as a SHORT-TERM BUY.The RSI is king for the Nasdaq . Its RSI is now under 40, which makes it borderline oversold.I follow the RSI for the Nasdaq religiously because the index is simply trading in a precise pattern.In the past few months, when the Nasdaq has exceeded an overbought 70 RSI, it has consistently sold off.December 9- exceeded an RSI of 70 and briefly pulled back.January 4- exceeded a 70 RSI just before the new year and declined 1.47%.January 11- declined by 1.45% after exceeding a 70 RSI.Week of January 25- exceeded an RSI of over 73 before the week and declined 4.13% for the week.I like that the Nasdaq is almost the 13100-level, and especially that it’s below its 50-day moving average now.I also remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.Because of the Nasdaq’s precise trading pattern and its recent decline, I am making this a SHORT-TERM BUY. But follow the RSI literally.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Gold just doesn’t seem to care and is stubbornly ignoring its inverse relationship with the USDX. What accounts for gold’s current downward trend?It’s really hard to get a more bearish combination of factors for gold than what we just saw.A good way to start the discussion would be to reply to a question that I received about the USD Index recently.Hi, I have been reading your articles about the USD bottoming and moving in a similar pattern to 2018. I am seeing a possible head and shoulder pattern on Jan 18th (left shoulder), Feb 5 th (the head), and Feb 17th (right shoulder). For all its problems, the euro seems to be going higher and higher. Just wondering what your thoughts are.Figure 1Indeed, the head-and-shoulders pattern formed as you described it (I added a dotted neckline to the formation on the above chart), but since it wasn’t as significant as the breakout above the declining medium-term resistance line, the implications of the latter overwhelmed the bearish implications of the H&S formation. The USD index invalidated the breakdown below the neck level of the formation, so what was previously a sell signal, has now turned into a buy signal. Consequently, we have yet another reason to expect higher values of the USD Index in the following weeks and months.Figure 2Based on the obvious similarity to early 2018, the verification of the breakdown is likely the final step before a major rally in the USDX. This will likely translate into lower precious metals and mining stock prices, especially if the general stock market declines as well.Let’s use another question that I received to segue to the following part of the analysis.What happens to gold if the dollar crashes, instead of going up?That’s just what happened early during the day, yesterday (Feb. 25). Well, it was just intraday action rather than a big medium-term crash, however, it shows what could happen. Simply put, gold declined anyway. Why did it do so? Because it wanted to do so based on technical/emotional factors. Maybe that was just a temporary reversion in direction? No – when the USD Index came back up, gold declined even more, and we see the continuation of this pattern today as well.What if the USD Index declines much more? The last time when gold was trading at these levels in 2020, the USD Index was trading at about 100. The latter declined about 10 index points and gold is at the same level. So, gold has already proven its ability to ignore the USD’s declines. There will be a time, when gold soars in response to even mild declines in the USDX, but this is likely to happen only after gold declines significantly – and it “wants” to rally.Figure 3In previous analyses , I commented on the above chart in the following way:The move higher in gold was notable, but nothing game changing. The last time gold moved above the declining short-term resistance line, was when it actually topped. The invalidation of the breakdown marked the start of another very short-term decline. The small decline in today’s overnight trading might be the very beginning of this invalidation that leads to another slide.That’s exactly what happened. The failed breakout led to another slide and gold is currently right after its breakdown to new 2021 lows. The road to ~$1,700 gold is now fully open. That’s when gold would be likely to take some sort of breather and gather strength (well, weakness, but “gathering weakness” just doesn’t sound right) for another wave down – likely to $1,500 or so.Please note that gold didn’t close at new yearly lows yesterday. This observation is important in comparison with the fact that…Figure 4Mining stocks did.Miners closed at new 2021 lows yesterday, even though gold didn’t, which once again proves their weakness and once again confirms the bearish outlook.I previously wrote that gold’s ~$1,700 target is likely to be aligned with the GDX’s ~$31 target and this remains up-to-date. After that, I expect some kind of corrective upswing – perhaps to $33 or so, and then another – big – move lower. Please note that the corrective upswing would be yet another (and final) verification of the head and shoulders pattern, and its very bearish implications would take place only after this verification. That’s why I expect the decline to be particularly significant. You can read more about this broad H&S pattern over here.Silver just went through a triangle-vertex-based reversal , and it seems to have indeed triggered a reversal.Figure 5Silver moved a bit higher on Wednesday (Feb. 24) and in yesterday’s early trading, but it didn’t exceed the recent high. This means that my previous comments on the above chart remain up-to-date:The move lower is not yet super significant, but given the reversal point, it could just be the beginning. Remember the triangle-vertex-based reversal at the beginning of the year? Back then, practically nobody wanted to believe that silver and the precious metals market was topping at that time. It was the truth, though. Gold and mining stocks were never higher since that time and the same thing would have most likely happened to silver if it wasn’t the #silversqueeze popularity that gave it its most recent boost.Now, there’s also another triangle-vertex-based-reversal in a few days , and since these reversals tend to work on a near-to basis, silver might top any day now, even if it hasn’t topped earlier today.Based on what’s happening in the markets right now, it seems just as possible that silver and the rest of the precious metals market will form a temporary bottom within the next few days.Figure 6Moreover, please note that it’s the last delivery day for silver futures, and instead of a supply-crunch-based rally, we see a decline. Naturally, this is bearish.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

The 2020s might be less roaring than the 1920s, which seems like good news for gold.The United States is strongly polarized, with blue versus red, liberals versus conservatives, and so on. People are divided along many lines, but the biggest division line is between those who count decades from 0 to 9 and those who count them from 1 to 10. It is intuitive for many people to adopt the first method, especially that we think of decades as ‘the 20s’, ‘the 30s’, and so on. However, the catch is that there was no Year Zero, so the first decade of the common era was years 1 to 10. Following this logic, the current decade started on January 1, 2021, not January 1, 2020.So, I feel fully entitled to investigate how gold will behave in the new decade. The issue is especially interesting as some analysts claim that we are entering the Roaring Twenties 2.0. Are they correct?On the surface, there are some similarities. The 1920s were a decade that followed the nightmare of World War I and the Spanish Flu pandemic . It was a time of quick economic growth (the U.S. GDP grew more than 40 percent in that period) and rapid technological innovation fueled predominantly by the rising access to electricity and big improvements in transportation (automobiles and planes).Fast forward one century and we land in the 2020s, which is a decade following the nightmare of the coronavirus pandemic . There are hopes for an acceleration in technological progress driven mainly by the rising scope of remote work, digital solutions, cloud computing, artificial intelligence, Internet of Things, 5G networks, robotization, super-batteries, electric vehicles, and so on. And given the pent-up demand and months spent in lockdowns, consumers are ready to congregate and spend!However, there are good reasons to be skeptical about the narrative of the Roaring Twenties 2.0 . The era of post-war prosperity was fueled by the return to the normalcy in the sphere of economic policy. I refer here to the fact that after WWI, there was a successful transition from a wartime economy to a peacetime economy. In contrast, in the aftermath of the Great Recession , there is a gradual transition from the peacetime economy to a wartime economy, that was only accelerated during the epidemic and the Great Lockdown .In particular, both the government spending and the fiscal deficits were sharply reduced in the post-war era. In consequence, the U.S. public debt declined, especially in real terms. Similarly, the Fed reversed its monetary policy and allowed for monetary contraction (and quick recession) in 1919-20 to reverse wartime inflation .In other words, the tighter monetary and fiscal policies led to an environment of economic prosperity. Also helpful for the U.S. were developments such as trustbusting and an economic recovery in Germany after its hyperinflation – all developments that will not replay in the 2020s.In contrast, neither the fiscal policy nor the monetary policy are going to normalize anytime soon , even if the COVID-19 pandemic is brought under control. The national debt has risen by almost $7.8 trillion under Trump’s presidency – a level that rivals Italy’s. The debt-to-GDP ratio has soared, as the chart below shows. And Joe Biden doesn’t worry about deficits – instead, with his plan of $1.9 trillion economic stimulus, he is going to balloon the public debt even further by increasing government spending.But maybe we shouldn’t worry about the debt? After all, after WW2, the public debt was even higher, but the economy didn’t collapse – actually, it grew so rapidly that the debt-to-GDP ratio diminished significantly. Yup, that’s correct, but after the pandemic, the economy will not recover as quickly as in the aftermath of WW2. Oh, and by the way, the economy grew its way out of debt only thanks to several years of high inflation .Therefore, the current complacency and naïve belief in low- interest rates and debt-driven economic recovery makes the scenario of the Roaring Twenties 2.0 not very likely, despite all the fantastic technological progress we are observing. So, instead of acceleration, we could rather observe an economic slowdown due to the poor economic policy that hampers the expansion of the private sector. Indeed, the recent report by the World Bank warns about the lost decade: “If history is any guide, unless there are substantial and effective reforms, the global economy is heading for a decade of disappointing growth outcomes.” This is good news for the gold market.But even if the Roaring Twenties 2.0 do happen, it wouldn’t have to be very bad for the yellow metal. It’s true that the 1920s was a period of wealth, prosperity, and decadence in which people didn’t think about preserving capital and investing in safe-haven assets such as gold . In contrast, there was a lot of risk-taking fueling the boom in the stock market. However, the Roaring Twenties were an inflationary period of debt-driven growth that ended in the systemic economic crisis called the Great Depression – and gold can shine in such an macroeconomic environment .Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.

Precious metal and crypto analysis exclusively for Celtic Gold on 27.02.2021Gold has been in a long and tenacious correction for nearly seven months already. On Friday the gold-market shocked traders and investors with yet another bloodbath similar to the one seen end of November last year. However, this capitulation probably means: Gold – The Final Sell-Off Is Here!ReviewThe price for one troy ounce of gold hit a new all-time high of US$2,075 on August 7th, 2020 and has been in a tough correction since then. After a first major interim low on November 30th at around US$1,764, gold posted a rapid yet deceptive recovery up to US$1.959. Since that high point on January 6th, the bears have taken back control.Obviously, the two sharp sell-offs on January 6th and January 8th had demoralized the bulls in such a strong way that they have not been able to get back on their feet since then. And although the bullish forces were still strong enough to create a volatile sideways period in January, since early February the bears were able to slowly but surely push prices lower.Just yesterday day gold finally broke below its support zone around US$1,760 to 1,770, unleashing another wave of severe selling into the weekly close. Now after seven month of correction, spot gold prices have reached a new low at US$1,717.© Crescant Capital via Twitter ©Tavi Costa, February 18th 2021On the other hand, the relative strength of silver remains strikingly positive. In this highly difficult market environment for precious metals, silver was able to trade sideways to up since the start of the new year. The same can be said of platinum prices.Overall, the turnaround in the precious metals sector has not yet taken place but seems to be extremely close. Since the nerves of market participants were significantly tested either with a tough and tenacious volatile sideways stretch torture or with sharp price drops like yesterday, most weak hands should have been discouraged and shaken off by now. At the same time, however, the sector has become pretty oversold and finally shows encouraging signs of being a great contrarian opportunity again.Technical Analysis: Gold in US-DollarGold in US-Dollars, weekly chart as of February 27th, 2021. Source: TradingviewOn the weekly chart gold lost the support of the middle trend line with the large uptrend channel in January. With a weekly close at US$1,734 the bears are clearly in control. However, Friday lows around US$1,725 hit pretty much exactly the long standing 38.2% fibonacci retracement from the whole wave up from US$1,160 to US$2,075. Hence, gold is meeting strong support right here around US$1,715 to US$1,730. Looking at the oversold weekly stochastic oscillator the chances for a bounce and an important turning point are pretty high. Hence, the end of this seven-month correction could be very near.However, only a clear breakout above the downtrend channel in red would confirm the end of this multi-month correction. Obviously, the bulls have a lot of work to do to just push prices back above US$1,850. If the Fibonacci retracement around US$1,725 cannot stopp the current wave of selling, then expect further downside towards the upper edge of the original rather flat uptrend channel in blue at around US$1,660. The ongoing final sell-off can easily extend a few more days but does not have to.In total, the weekly chart is still clearly in a confirmed downtrend. Prices have reached strong support at around US$1,725 and at least a good bounce is extremely likely from here. However, given the oversold setup including the sell-off on Friday there are good chances that the correction in gold is about to end in the coming week and that a new uptrend will emerge.Gold in US-Dollars, daily chart as of February 27th, 2021. Source: TradingviewOn the daily chart, the price of gold has been sliding into a final phase of capitulation since losing contact with its 200-MA (US$1,858). Not only predominating red daily candles but also lots of downtrend-lines and resistance zones are immersing this chart into a sea of red. That itself should awake the contrarian in any trader and investor. However, it is certainly not (yet) the time to play the bullish hero here as catching a falling knife is always a highly tricky art. But at least, the daily stochastic oscillator is about to reach oversold levels. Momentum remains bearish for now of course.Overall, the daily chart is bearish. Last weeks sell-off however might be overdone and has to be seen in conjunction with the physical deliveries for February futures at the Comex. However, a final low and a trend change can only be confirmed once gold has recaptured its 200-MA. This line is currently far away, and it will likely take weeks until gold can meet this moving average again. Further downside can not be excluded but it should be rather shallow.Commitments of Traders for Gold – The Final Sell-Off Is Here!Commitments of Traders for Gold as of February 27th, 2021. Source: CoT Price ChartsSince the beginning of the year, commercial traders have reduced their cumulative net short position in the gold futures market by more than 21% while gold prices corrected from US$1,965 down to US$1,770.Commitments of Traders for Gold as of February 27th, 2021. Source: SentimentraderIn the long-term comparison, however, the current net short position is still extremely high and does actually signal a further need for correction. However, this situation has been ongoing since mid of 2019. Since then, commercial traders have not been able to push gold prices significantly lower to cover their massive short positions.We can assume that since the emergence of the “repro crisis” in the USA in late summer 2019, the massive manipulation via non-physical paper ounces no longer works as it did in the previous 40 years. The supply and demand shock caused by the Corona crisis in March 2020 has certainly exacerbated this situation. In this respect, COMEX has lost its mid- to long-term weight and influence on pricing. This doesn’t mean however, that short-term sell-offs like yesterday won’t happen anymore.Nevertheless, the CoT report on its own continues to deliver a clear sell signal, similar to the last one and a half years already.Sentiment: Gold – The Final Sell-Off Is Here!Sentiment Optix for Gold as of February 27th, 2021. Source: Sentiment traderThe weak price performance in recent weeks has caused an increasingly pessimistic mood among participants in the gold market. The Optix sentiment indicator for gold is now below its lows from November 30th. In a bull market, however, these rather pessimistic readings are rare and usually short-lived. In this respect, even the currently not extreme negative sentiment could well be sufficient for a sustainable ground and turnaround.Overall, the current sentiment analysis signals an increasingly optimistic opportunity for contrarian investors. The chances for a final low after seven months of correction are relatively good in the short term already.Seasonality: Gold – The Final Sell-Off Is Here!Seasonality for Gold as of February 22nd, 2021. Source: SeasonaxFrom a seasonal point of view, the development in the gold market in recent weeks is in stark contrast to the pattern established over the last 52 years. Thus, a strong start to the year could have been expected well into February. Instead, gold fell sharply from US$ 1.959 down to US$1.717 so far.If one pushes the statistically proven seasonal high point from the end of February to the beginning of January, a grinding sideways to lower phase including interim recoveries as well as recurring pullbacks is still to be expected until April. The beginning of the next sustainable uptrend could therefore theoretically be estimated approximately starting in May. Of course, these are all just abstract seasonal mind games.In any case, statistically speaking, the seasonality for gold in spring is not very supportive for about four months. In this respect, the seasonal component continues to call for patience. At the latest in early summer however, gold should be able to trend higher again. The best seasonal phase typically starts at the beginning of July and lasts until the beginning of October.Sound Money: Bitcoin/Gold-RatioSound Money Bitcoin/Gold-Ratio as of February 22nd, 2021. Source: ChaiaWith prices of US$47,500 for one Bitcoin and US$1,734 for one troy ounce of gold, the Bitcoin/Gold-ratio is currently sitting at 27.39. That means you have to pay more than 27 ounces of gold for one Bitcoin. In other words, an ounce of gold currently only costs 0.036 Bitcoin. Bitcoin has thus mercilessly outperformed gold in the past few months. We had repeatedly warned against this development since early summer 2020!© Holger Zschaepitz via Twitter @Schuldensuehner, February 17th, 2021Generally, you should be invested in both: precious metals and bitcoin. Buying and selling Bitcoin against gold only makes sense to the extent that one balances the allocation in these two asset classes! At least 10% but better 25% of one’s total assets should be invested in precious metals (preferably physically), while in cryptos and especially in Bitcoin, one should hold at least 1% to 5%. Paul Tudor Jones holds a little less than 2% of his assets in Bitcoin. If you are very familiar with cryptocurrencies and Bitcoin, you can certainly allocate higher percentages to Bitcoin and maybe other Altcoins on an individual basis. For the average investor, who usually is primarily invested in equities and real estate, 5% in the highly speculative and highly volatile bitcoin is already a lot!“Opposites complement. In our dualistic world of Yin and Yang, body and mind, up and down, warm and cold, we are bound by the necessary attraction of opposites. In this sense you can view gold and bitcoin as such a pair of strength. With the physical component of gold and the digital aspect of bitcoin (BTC-USD) you have a complementary unit of a true safe haven in the 21st century. You want to own both!”– Florian GrummesMacro update and conclusion: Gold – The Final Sell-Off Is Here!© Holger Zschaepitz via Twitter @Schuldensuehner, February 19th, 2021.In the big picture, the “confetti party” continues. As usual, the Fed’s balance sheet total rose to a new all-time high of US$7,557 billion. The increase in assets again concentrated almost entirely in the securities holdings. The Fed balance sheet total now corresponds to 35% of the US GDP.© Holger Zschaepitz via Twitter @Schuldensuehner, February 17th, 2021In the eurozone, the unprecedented currency creation continues as well. Here, the ECB’s balance sheet climbed to 7,079 billion EUR reaching a new all-time high. The ECB balance sheet now represents 71% of the euro-zone GDP.© Crescant Capital via Twitter ©Tavi Costa, February 12th, 2021.But the Chinese are doing it the most blatantly. Here, the money supply has increased by US$5.4 trillion since March 2020!© Crescant Capital via Twitter ©Tavi Costa, February 15th 2021.As repeatedly written at this point, the expansion of the central bank’s balance sheets has far-reaching consequences. The GSCI raw materials index has risen significantly in the past 11 months. Accordingly, inflation expectations are also rising more and more and still have a lot to catch up.© Crescant Capital via Twitter ©Tavi Costa, February 20th 2021.Wood prices in the USA provide a good example of the rapidly rising commodity prices. Lumber saw the fastest increase since 1974 and has risen by more than 35% since the beginning of the year. During the same period, gasoline increased by 20%, natural gas by 26%, agricultural raw materials are around 25% more expensive and base metals jumped over 20% higher! Hence, inflation is coming, and central bankers won’t be able to stop it.While silver and platinum have been anticipating this “trend” for weeks and have been holding up much better than gold, the precious metal sector is still in its correction phase. This correction began after a steep two-year rally in last August and can be classified as perfectly normal and healthy until now.© Holger Zschaepitz via Twitter @Schuldensuehner, February 18th, 2021.After seven months and a price drop of nearly US$360, the worst for gold is likely over. In view of the recent slight increase in real US yields (currently -0.92%) the pullback over the last few weeks can be justified. Yet, it is important to focus on the bigger picture. This is where the international devaluation race to the bottom continues unabated and will sooner or later lead to significantly higher gold prices too.Technically, Friday’s sell off might have marked the final low for this ongoing correction. As well, the slide could continue for a few more days, but the remaining risk to the downside seems rather shallow. In the worst-case Gold might drop to US$1,650 to US$1,680.To conclude, this means for Gold – The Final Sell-Off Is Here! The Bottom may arrive soon within the next week or has already been seen on Friday.Source: www.celticgold.euFeel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Florian Grummes|February 27th, 2021|Tags: Bitcoin, bitcoin/gold-ratio, Gold, Gold Analysis, Gold bullish, gold correction, Gold Cot-Report, gold fundamentals, Silver, The bottom is in|0 CommentsFlorian GrummesPrecious metal and crypto expertwww.midastouch-consulting.comFree newsletterSource: www.celticgold.euAbout the Author: Florian GrummesFlorian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks.

None of Friday‘s intraday attempts to recapture 3,850 stuck, and the last hour‘s selling pressure is an ill omen. Especially since it was accompanied by high yield corporate bondsh weakening. It‘s as if the markets only now noticed the surging long-end Treasury yields, declining steeply on Thursday as the 10y Treasury yield made it through 1.50% before retreating. And on Friday, stocks didn‘t trust the intraday reversal higher in 20+ year Treasuries either.Instead, the options traders took the put/call ratio to levels unseen since early Nov. The VIX however doesn‘t reflect the nervousness, having remained near Thursday‘s closing values. Its long lower knot looks encouraging, and the coming few days would decide the shape of this correction which I have not called shallow since Wed‘s suspicious tech upswing. Here we are, the tech has pulled the 500-strong index down, and remains perched in a precarious position. Could have rebounded, didn‘t – instead showing that its risk-on (high beta) segments such as semiconductors, are ready to do well regardless.That‘s the same about any high beta sector or stock such as financials – these tend to do well in rising rates environments. Regardless of any coming stabilization / retreat in long-term Treasury yields, it‘s my view that we‘re going to have to get used to rising spreads such as 2y over 10y as the long end still steepens. The markets and especially commodities aren‘t buying Fed‘s nonchalant attitude towards inflation. Stocks have felt the tremors, and will keep rising regardless, as it has been historically much higher rates that have caused serious issues (think 4% in 10y Treasuries).In such an environment, the defensives with low volatility and good earnings are getting left behind, as it‘s the top earners in growth, and very risk-on cyclicals that do best. They would be taking the baton from each other, as (micro)rotations mark the stock market bull health – and once tech big names join again, new highs would arrive. Then, the $1.9T stimulus has made it past the House, involves nice stimulus checks, and speculation about an upcoming infrastructure bill remains. Coupled with the avalanche of new Fed money, this is going into the real economy, not sitting on banks‘ balance sheets – and now, the banks will have more incentive to lend out. Margin debt isn‘t contracting, but global liquidity hasn‘t gone pretty much anywhere in February. Coupled with the short-term dollar moves, this is hurting emerging markets more than the U.S. - and based on the global liquidity metrics alone, the S&P 500 is oversold right now – that‘s without the stimulus package. It‘s my view that we‘re experiencing a correction whose shape is soon to be decided, and not a reversal of fortunes.Just like I wrote at the onset of Friday:(…) Would we get a bounce during the U.S. session? It‘s possible to the point of likely. The damage done yesterday though looks to have more than a few brief sessions to run to repair. True, some stocks such as Tesla are at a concerning crossroads, and in general illustrate the vulnerability of non-top tech earners within the industry. Entering Mon‘s regular session, the signs are mixed as there hasn‘t been a clear reversal any way I look at it. Still, this remains one of the dips to be bought in my view – and the signs of it turning around, would be marked by strengthening commodities, and for all these are worth, copper, silver and oil especially.As for gold, it should recover given the retreating long-term yields, but Fri didn‘t bring any signs of strength in the precious metals sector, to put it mildly. Look for TLT for directions, even as real rates, the true determinant, remain little changed and at -1%, which means very favorable fundamentals for the yellow metal. And remember that when the rate of inflation accelerates, rising rates start to bite the yellow metal less.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Its InternalsFriday‘s session doesn‘t have the many hallmarks of a reversal. Slightly higher volume, yet none of the intraday upswings held. The Force index reveals that the bears just paused for a day, that there wasn‘t a true reversal yet. The accumulation is a very weak one thus far, and the sellers can easily show more determination still.Credit MarketsHigh yield corporate bonds (HYG ETF) are plain and simple worrying here. The decent intraday upswing evaporated as the closing bell approached. A weak session not indicative of a turnaround.The high yield corporate bonds to short-dated Treasuries (HYG:SHY) performance was weaker than the stock market performance, which isn‘t a pleasant development. Should the bond markets keep trading with a more pessimistic bias than stocks, it could become quite fast concerning. As said already, the shape of the correction is being decided these days.Stocks, Smallcaps and Emerging MarketsAfter having moved hand in hand, emerging markets (EEM ETF) have weakened considerably more over the prior week than both the S&P 500 and the Russell 2000 (IWM ETF). EEM is almost at its late Jan lows – given Fri‘s spike, watching the dollar is key, and not just here.TechnologyTechnology (XLK ETF) didn‘t reverse with clarity on Friday, regardless of positive semiconductors (XSD ETF) performance. At least the volume comparison here is positive, and indicates accumulation. Just as I was highlighting the danger for S&P 500 and gold early Thursday, it‘s the tech sector that holds the key to the 500-strong index stabilization.Gold and SilverReal rates are deeply negative, long-dated Treasuries indeed turned higher on Friday, yet gold plunged right to its strong volume profile support zone before recovering a little. Its very short-term performance is disappointing, It was already its Tue performance that I called unconvincing – let alone Wed‘s one. I maintain that it‘s long-dated Treasury yields and the dollar that are holding the greatest sway. Rates should retreat a little from here, and the gold-dollar correlation is only slightly positive now, which translates into a weak positive effect on gold prices.But it‘s silver that I am looking to for earliest signs of reversal – the white metal and its miners have the task clear cut. Weeks ago, I‘ve been noting the low $26 values as sufficient to retrace a reasonable part of prior advance, and we‘ve made it there only this late. Thu and Fri‘s weakness has much to do with the commodities complex, where I wanted still on Thu to see copper reversing intraday (to call it a risk-on reversal), which it didn‘t – and silver suffered the consequences as well. Likewise now, I‘m looking to the red metal, and will explain in today‘s final chart why.Precious Metals RatiosThere is no better illustration of gold‘s weakness than in both miners to gold ratios that are bobbing around their local lows, rebounding soundly, and then breaking them more or less convincingly again. The gold sector doesn‘t yet appear ready to run.Let‘s get the big picture through the copper to oil ratio. Its current 8 months long consolidation has been punctured in the middle with oil turning higher, outperforming the red metal – and that brought the yellow one under pressure increasingly more. Yet is the uptick in buying interest in gold a sign of upcoming stabilization and higher prices in gold that Fri‘s beaten down values indicate? Notably, the copper to oil ratio didn‘t break to new lows – and remains as valuable tool to watch as real, nominal interest rates, and various derivatives such as copper to Treasury yields or this very ratio.SummaryStock bulls are almost inviting selling pressure today with the weak finish to Fri‘s session. While the sectoral comparisons aren‘t disastrous, the credit markets indicate stress ahead just as much as emerging markets do. Still, this isn‘t the end of the bull run, very far from it – new highs are closer than quite a few might think.Gold and silver took an even greater beating on Fri than the day before. Naturally, silver is much better positioned to recapture the higher $27 levels than gold is regarding the $1,800 one. With the long-dated Treasuries stabilization indeed having resulted in a short-term dollar upswing, the greenback chart (and its effects upon the metals) is becoming key to watch these days. Restating the obvious, gold is far from out of the woods, and lacking positive signs of buying power emerging.

Is the worst of what the last few weeks brought over? February started off with so much promise, only to be ruined by surging bond yields.The way that bond yields have popped has weighed heavily on growth stocks. Outside of seeing a minor comeback on Friday (Feb. 26), the Nasdaq dropped almost 7% between February 12 and Friday’s (Feb. 26) close.Other indices didn’t fare much better either.The spike bond yields, however, in my view, are nothing more than a catalyst for stocks to cool off and an indicator of some medium to long-term concerns. But calling them a structural threat is a bit of an overstatement.Rising bond yields are a blessing and a curse. On the one hand, bond investors see the economy reopening and heating up. On the other hand, with the Fed expected to let the GDP heat up without hiking rates, inflation may return.I don’t care what Chairman Powell says about inflation targets this and that. He can’t expect to keep rates this low, buy bonds, permit money to be printed without a care, and have the economy not overheat.He may not have a choice but to hike rates sooner than expected. If not this year, then in 2022. I no longer buy all that talk about keeping rates at 0% through 2023. It just can’t happen if bond yields keep popping like this.So was the second half of February the start of the correction that I’ve been calling for? Or is this “downturn” already over?Time will tell. While I still do not foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of this month could happen.Corrections are also healthy and normal market behavior, and we are long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017), and we haven’t seen one in almost a year.A correction could also be an excellent buying opportunity for what could be a great second half of the year.Pay attention to several things this week. The PMI composite, jobs data, and consumer credit levels will be announced this week.We have more earnings on tap this week too. Monday (March 1), we have Nio (NIO) and Zoom (ZM), Tuesday (March 2) we have Target (TGT) and Sea Limited (SE), Wednesday (March 3), we have Okta (OKTA) and Snowflake (SNOW), and Thursday (March 3) we haveBroadcom (AVGO).My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:The downturn we experienced to close out February could be the start of a short-term correction- or it may be a brief slowdown. A further downturn by the end of the month is very possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- a Buyable Slowdown?Figure 1- Nasdaq Composite Index $COMPThe Nasdaq’s downturn was so overdue. Even though more pain could be on the horizon, I like the Nasdaq at this level for some buying opportunities.If more losses come and the tech-heavy index dips below support at 13000, then it could be an even better buying opportunity. It can’t hurt to start nibbling now, though. If you waited for that perfect moment to start buying a year ago when it looked like the world was ending, you wouldn’t have gained as much as you could have.Plus, if Cathie Wood, the guru of the ARK ETFs that have continuously outperformed, did a lot of buying the last two weeks, it’s safe to say she knows a thing or two about tech stocks and when to initiate positions. Bloomberg News ’ editor-in-chief emeritus Matthew A. Winkler wouldn’t have just named anyone the best stock picker of 2020.Before February 12, I would always discuss the Nasdaq’s RSI and recommend watching out if it exceeds 70.Now? As tracked by the Invesco QQQ ETF , the Nasdaq has plummeted almost 7% since February 12 and is closer to oversold than overbought. !While rising bond yields are concerning for high-flying tech stocks, I, along with much of the investing world, was somewhat comforted by Chairman Powell’s testimony last week (even if I don’t totally buy into it). Inflation and rate hikes are definitely a long-term concern, but for now, if their inflation target isn’t met, who’s to fight the Fed?Outside of the Russell 2000, the Nasdaq has been consistently the most overheated index. But after its recent slowdown, I feel more confident in the Nasdaq as a SHORT-TERM BUY.The RSI is king for the Nasdaq . Its RSI is now around 40.I follow the RSI for the Nasdaq religiously because the index is merely trading in a precise pattern.In the past few months, when the Nasdaq has exceeded an overbought 70 RSI, it has consistently sold off.December 9- exceeded an RSI of 70 and briefly pulled back.January 4- exceeded a 70 RSI just before the new year and declined 1.47%.January 11- declined by 1.45% after exceeding a 70 RSI.Week of January 25- exceeded an RSI of over 73 before the week and declined 4.13% for the week.I like that the Nasdaq is almost at its support level of 13000, and especially that it’s below its 50-day moving average now.I also remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.Because of the Nasdaq’s precise trading pattern and its recent decline, I am making this a SHORT-TERM BUY. But follow the RSI literally.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

After gold came down hard last week, it might be in a for a short pause and corrective upswing. What will the yellow metal’s next chapter bring for the miners? How high can they go if gold rallies from here?As gold recently moved very close to my approximate target of $1,700, the senior miners (GDX) ended Friday’s (Feb. 26) session $0.13 above my initial downside target of $31 . And while an eventual flush to the $23 to $24 range (or lower) remains on the table, a corrective upswing could be next in line.To explain, if gold can bounce off of the $1,670 to $1,700 range, the GDX ETF will likely follow suit. Thus, while the miners are likely to move drastically lower over the medium-term, a decline of nearly 11% over the last two weeks has given way to short-term oversold conditions.Please see below:Figure 1Even more precise, if you analyze the chart below, you can see that the GDX ETF has garnered historical support at roughly $29.52. Moreover, the level also coincides with the early-March high, the mid-April low and the 61.8% Fibonacci retracement level. As a result, a corrective upswing to ~$33/$34 could be the miners’ next move.Please see below:Figure 2 - VanEck Vectors Gold Miners ETF (GDX), GDX and Slow Stochastic Oscillator Chart Comparison – 2020Remember though, if gold does bounce off of the $1,670 to $1,700 range, and the miners are able to ride the momentum higher, ~$33 to ~$34 is where the rally likely ends. From there, the bearish medium-term trend will likely continue, with the miners declining to my secondary target range of $23 to $24.From a medium-term perspective, the potential head and shoulders pattern – highlighted by the shaded green boxes above – also deserves plenty of attention.Ever since the mid-September breakdown below the 50-day moving average , the GDX ETF was unable to trigger a substantial and lasting move above this MA. The times when the GDX was able to move above it were also the times when the biggest short-term declines started.Looking at the chart above, the most recent move higher only made the similarity of this shoulder portion of the bearish head-and-shoulders pattern to the left shoulder ( figure 26 - both marked with green) bigger. This means that when the GDX breaks below the neck level of the pattern in a decisive way, the implications are likely to be extremely bearish for the next several weeks or months.Due to the uncanny similarity between the two green rectangles, I decided to check what happens if this mirror-similarity continues. I used purple, dashed lines for that. There were two important short-term price swings in April 2020 – one shows the size of the correction and one is a near-vertical move higher.Copying these price moves (purple lines) to the current situation, we get a scenario in which GDX (mining stocks) moves to about $31 and then comes back up to about $34. This would be in perfect tune with what I wrote previously. After breaking below the head-and-shoulders pattern, gold miners would then be likely to verify this breakdown by moving back up to the neck level of the pattern. Then, we would likely see another powerful slide – perhaps to at least $24.This is especially the case, since silver and mining stocks tend to decline particularly strongly if the stock market is declining as well. And while the exact timing of the market’s slide is not 100% clear, the day of reckoning for stocks is coming . And it might be very, very close.As I explained previously, based on the similarities to the 1929 and 2008 declines, it could be the case that the precious metals sector declines for about 3 months after the general stock market tops. And it seems that we won’t have to wait long for the latter. Perhaps the next big move lower in stocks is already underway.In conclusion, the sun may be about to shine on the precious metals, even if the upcoming rally is not yet destined to last. If the yellow metal can rally off of the $1,670 to $1,700 range, the miners have a pathway to ~$33/$34. Supporting a short-term bounce, abnormally high short interest in U.S. Treasuries could be a contrarian indicator , with a temporary calming of the priors weeks’ yield surge adding fuel to the PMs’ fire. If so, the favorable backdrop could support a temporary bounce before gold and the miners resume their medium-term downtrends.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Since shortly after the US November elections, my research team and I have been clear about our research and our belief that the bullish rally in the markets would continue to drive the strongest sectors higher and higher.  In December 2020, we shared an article suggesting our proprietary Fibonacci Price Amplitude Arcs and GANN theory indicated a major price peak could set up in early April 2021.  On February 3, 2021, we also published an early warning that Treasure Yields were set up to prompt a big topping pattern sometime over the next 6+ months .  We followed that up with a February 21, 2021 article suggesting future Gold and Silver price trends may be tied to the moves in Treasury Yields and the resulting stock market trends.Now that the Treasury Yields have completed what we suggested would be required to start a “revaluation event” in the stock market, we believe that a “Crazy Ivan” event may soon setup in the global markets.  Many months back (August 28, 2019), we published an article about precious metals were about to pull a Crazy Ivan price event (https://www.thetechnicaltraders.com/precious-metals-crazy-ivan-followup/). This prediction came true in 2020 and 2021.  Now, we are suggesting the global markets may pull a new type of Crazy Ivan event – a price revaluation event prompted by the rise in Treasury Yields.The Yields SetupIn our February 3, 2021, research article about the Treasury Yields, we suggested that a series of setup processes take place that prompt a broad market correction related to Treasury Yields.  First, Yields must fall from levels above the Breakdown Threshold to levels below the Setup Threshold to complete the first stage of the setup.  This first stage sets up the potential for moderate sideways price trends nearing a peak, or congestion.  The second stage of this setup is that Yields must fall to levels below ZERO.  This move creates the potential for one of two outcomes when Yields begin to rally.If Yields rally back above the Setup Threshold and/or the Breakdown Threshold, but then stall and reverse back below the Breakdown Threshold, then the markets will likely stall/congest or enter a sideways/rolling top type of trend for a period of 2 to 6+ months. If Yields rally back above both the Setup Threshold and the Breakdown Threshold and continue to rally higher, then the markets begin to start a sideways/correction event which we are calling a Crazy Ivan event.We have highlighted all the areas in the charts below where the Yields have fallen to levels below ZERO on this chart and you can clearly see how the SPX reacted to these upside Yields recovery events.  Every time (in RED) where the Yields rallied above the Setup and Breakdown Threshold levels, a broad market downtrend setup within 6 to 12+ months of this event.  We believe the markets are about to do the same type of thing and we are calling it a Crazy Ivan event because we believe the current market setup is vastly different than the previous setups.If the markets start to roll over and volatility continues to stay higher or rise, we can benefit from it with our Options Trading Signals which we use non-direction trades to sell premiums. This allows options traders to profit from volatility and not worry about which way the market moves.The current Crazy Ivan setupThe following current Yields chart shows a more detailed example of what is currently taking place related to the Crazy Ivan setup.  Yields are back above the 1.35 level on this chart and have quickly rallied above the Setup and Breakdown Threshold levels.  If Yields continue to rally from this level, we believe the markets will quickly shift into a sideways/rolling top formation which will eventually prompt a new Crazy Ivan price event (a big revaluation event).  If yields stall near these current levels and move back below the Breakdown Threshold, then we may still see a bit of sideways trading for a while, but usually the markets will begin to resume an upward price trend if Yields stay below the Breakdown Threshold.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The outcome hinges on what Yields do in the next 4 to 12+ months and we believe traders and investors need to prepare for big shifting trends in major sectors and indexes going forward.  The setup process is already complete at this point.  We are not waiting for anything to further complete this potential for the Crazy Ivan event.  We are just watching Yields to see if they continue higher or stall and move back below the Breakdown Threshold.  At this point, the Crazy Ivan price revaluation event is almost a certainty – it is just a matter of time.What we expect to see is not the same type of market trend that we have experienced over the past 8+ years – this is a completely different set of market dynamics. Don’t miss the opportunities in the broad market sectors in 2021, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.In the second part of this article we will publish later this week, we will review and share more data and details related to the rising Yields and the pressures that will likely be placed on the global markets.  You don't want to miss the conclusions of our research.

Our optimism for further advances is principle-based. The following analysis shows why we perceive a continuation in price advances with low-risk entry possibilities.BTC-USD, Monthly Chart, A healthy breath:BTC-USDT, monthly chart as of March 1st, 2021.A glance at the monthly chart above shows that as much as the trend is steep, it is in good health. The upper wicks on the monthly candles indicate a healthy breath. What expands must retrace. And Bitcoin does just that. It has strong pushes upwards but then gives profits partially back. It takes a deep breath up to be followed by harmonious breathing out. We see no indication from the most critical larger time frame why Bitcoin prices could not continue to advance soon, even to surpass their all-time highs within the next months. There is no blow-off volume plotted nor irregular fractal volume distribution of supply and demand zones. There are no warning signals of ill health. This athlete is fit for a marathon. BTC-USDT, Weekly Chart, Most likely:BTC-USDT, weekly chart as of March 1st, 2021.All trading instruments have their probabilistic personality. Bitcoin is volatile and has typically larger retracements in size. These personalities provide for a good mathematical guideline of what is most likely to happen. Of course, they can also change over time).A closer look at the weekly chart above shows prices to sit right below a distribution zone indicated by a volume analysis showing resistance overhead at US$47,396. Bitcoin most likely gets pushed one more time to lower price levels before advancing. Therefore, we are buying into the market within a range center at prices of US$37,630 (+/-1k).BTC-USDT, Daily Chart, Bitcoin on the move:BTC-USDT, daily chart as of March 1st, 2021.We see three possible scenarios. The daily chart shows in their most likely probability scenario: number one likely, scenario two the second likely, and scenario three the least likely. One should participate in all three events with entries and use our quad exit strategy to protect these events from costing any money. Instead, irrespective of their longer outcome, provide for at least a small profit.Bitcoin on the move:With larger time frames in mind, technical analysis isn’t the only factor pointing towards higher prices. The sustainability of Bitcoin and demand for this technology are more and more transparent. Some argue that Bitcoin’s anonymity creates crime. We find the true principle there to be an aspect of criminal behavior within humanity. Cash is used for some unlawful transactions. That doesn’t render cash transactions inherently to be illegal. In a world where excessive data eradicates privacy, one needs to be asking if the need for a payment system that allows for some of that privacy isn’t something necessary. That is to say protection of human potential that is born out of personal privacy.Less philosophical, there is a need for wealth preservation right now. Worldwide monetary policy eradicates the value of fiat currency fast. For the short term, we find there to be a threat of further value dilution. Upcoming stimulus package payments require money printing again. For the midterm, we see the first signs of a different attitude towards the risk of the printing machine between European countries and the US. Ill-gotten behavior has an extended shelf life when the whole world dances the same waltz. Once opinions diverge, resulting in various diverging actions, the house of cards is tumbling fast. In this case, while Bitcoin might be dropping temporarily and take one of its deeper breathing out phases, it will be the first that takes an inhale on a level astounding even its fans.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller| March 1st, 2021|Tags: Bitcoin, Bitcoin correction, Bitcoin mining, crypto analysis, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

The economy seems to be recovering, while bond yields are increasing again, sending gold prices down.Not good. Gold bulls can be truly upset. The yellow metal continued its bearish trend last week. As the chart below shows, the price of gold has declined from $1,807 on Monday (Feb. 22) to $1,743 on Friday (Feb. 26).What happened? Well, last week was full of positive economic news. In particular, personal income surged by 10 percent in January, compared to only 0.6-percent rise in the previous month. Meanwhile, consumer spending increased 2.4 percent, following a 0.4-percent decline in December. This means that, on an absolute basis, personal consumption expenditures have almost returned to the pre- pandemic level, as the chart below shows.Additionally, durable goods orders jumped by 3.4 percent in January versus a 1.2-percent increase one month earlier. Moreover, initial jobless claims declined from 841,000 to 730,000 in the week ending February 20, as the chart below shows. It means that the economic situation is improving, partially thanks to the December fiscal stimulus.And, on Saturday (Feb. 27), the House of Representatives passed Biden’s $1.9 trillion stimulus package. Although the bill has yet to be approved by the Senate, the move by the House brings us one step closer to its implementation. Although the additional fiscal stimulus may overheat the economy and turn out to be positive for gold prices in the long-term, the strengthened prospects of higher government expenditures can revive the optimism in the financial markets, negatively affecting the safe-haven assets such as gold .Finally, on Saturday, the FDA authorized Johnson & Johnson’s vaccine against COVID-19. This decision expands the availability of vaccines, which brings us closer to the end of the epidemic in the U.S. and offers hope for a faster economic recovery. The new vaccine is highly effective (it provides 85-percent protection against severe COVID-19 28 days after vaccination) and most importantly, requires only one dose, which facilitates efficient distribution. So, the approval of another vaccine is rather bad news for gold and could add to the metal’s problems in the near future.However, the most important development from the last week was the jump in the bond yields . As the chart below shows, after a short stabilization in the first half of the week, the yields on the 10-year Treasuries indexed by inflation rose from -0.79 to -0.60 percent on Thursday (Feb. 25). This surge in the real interest rates is negative for the price of gold.Implications for GoldWhat does this all mean for the price of gold? Well, the increase in the bond yields is clearly bad for the yellow metal. Although they have partially risen to strengthened inflation expectations, the real interest rates have also soared. It means that investors expect wider fiscal deficits and expanding vaccination to accelerate inflation only partially, but in a large part, it will speed up real economic growth. This is a huge problem for gold, as real interest rates are a key driver of gold prices.An additional issue is that the expectations of higher economic growth and inflation create accompanying expectations for the Fed to tighten its monetary policy and hike the federal funds rate , which exerts downward pressure on gold prices.This is what we were afraid of at the beginning of the year. We noted that the real interest rates were so low that the next move could be up. Importantly, there is further room for upward trajectory, as the real interest rates are still importantly below the pre-pandemic level.However, we wouldn’t bet on the return to the levels seen last year. After all, interest rates didn’t return to the pre-crisis level after the Great Recession , so it’s unlikely that they will do it now. Additionally, investors should remember that the U.S. government is now so heavily indebted that if Treasury yields continue to increase, the Fed would have to intervene. A failure to do so would mean that the interest expenses would grow too much, creating serious problems for the Treasury. So, the current bearish trend in gold may not last forever – although it may still take some time.If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care

Stocks thoroughly rebounded yesterday, and corporate credit markets did even better. These are optimistic signs as the shape of the correction has been decided – again, as shallow, less than 5% one. Long-termTreasuries are no longer in a free fall, volalility has retreated back to the low 20s, and the put/call ratio swung back towards the bottom of its recent range.Technology has rebounded as well, and the microrotations in the stock market keep being the haollmark of stock bull‘s health, and the risk-on (high beta) sectors and segments such as financials, semiconductors, or capex (capital expenditure such as construction and engineering) - and airlines are catching breath too.Such was the sectoral themes likely to do well that I mentioned yesterday:(…) That‘s the same about any high beta sector or stock such as financials – these tend to do well in rising rates environments. Regardless of any coming stabilization / retreat in long-term Treasury yields, it‘s my view that we‘re going to have to get used to rising spreads such as 2y over 10y as the long end still steepens. The markets and especially commodities aren‘t buying Fed‘s nonchalant attitude towards inflation. Stocks have felt the tremors, and will keep rising regardless, as it has been historically much higher rates that have caused serious issues (think 4% in 10y Treasuries).In such an environment, the defensives with low volatility and good earnings are getting left behind, as it‘s the top earners in growth, and very risk-on cyclicals that do best. They would be taking the baton from each other, as (micro)rotations mark the stock market bull health – and once tech big names join again, new highs would arrive. Then, the $1.9T stimulus has made it past the House, involves nice stimulus checks, and speculation about an upcoming infrastructure bill remains. Coupled with the avalanche of new Fed money, this is going into the real economy, not sitting on banks‘ balance sheets – and now, the banks will have more incentive to lend out. Margin debt isn‘t contracting, but global liquidity hasn‘t gone pretty much anywhere in February. Coupled with the short-term dollar moves, this is hurting emerging markets more than the U.S. - and based on the global liquidity metrics alone, the S&P 500 is oversold right now – that‘s without the stimulus package. It‘s my view that we‘re experiencing ... not a reversal of fortunes. … this remains one of the dips to be bought in my view.All right, we‘re seeing a rebound in progress, on the way to new highs – but what about the embattled gold? Its seasonality component was „slated“ to help the bulls in Feb, and the king of metals instead succumbed to nominal yields pressure. Would the Mar historically negative slant be likewise invalidated – and again precisely for the reason called long-dated Treasuries?Regardless of the immensely positive fundamentals behind the precious metals (including real rates, the true determinant, little changed and at -1%), it has thus far been commodities and Bitcoin who rose and held on to their gains since the 2H 2020. Please remember the big picture chart about commodities and precious metals taking turns in rising that I presented on Feb 17. The bullish case for gold (let alone silver) isn‘t lost – merely thoroughly questioned these weeks of sordid $HUI:$GOLD underperformance.Are we seeing signs of decreasing financial asset price inflation – or an accelerating one? It‘s the inflation and inflation expectations that are weighed against the nominal rates trajectory. As the rate of inflation accelerates, rising nominal rates would bite the yellow metal less – and there is no denying that the risk of inflation is running as high as can be.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookSo far, so (very) good in stocks – volume is lagging but the Force index still flipped positive, indication that at worst, we‘re likely to muddle through in a sideways to higher trading pattern over the nearest days.Credit MarketsAfter a worrying move on Friday, high yield corporate bonds (HYG ETF) are once again assuming leadership, and I see this chart as the one with more bullish implications for the coming days than the S&P 500 alone. That‘s the dynamic I am looking for in a good run.Both leading credit market ratios – high yield corporate bonds to short-dated Treasuries (HYG:SHY) and investment grade corporate bonds to longer-dated ones (LQD:IEI) – are looking to get back in closer sync than has been the case in 2021 thus far. It would take time, but would prove that the stock market can still keep on rising when faced with even higher nominal rates than we saw thus far.TechnologyTechnology (XLK ETF) clearly reversed, and while the volume isn‘t convincing on a standalone basis, coupled with semiconductors (XSD ETF) and other value stocks performance, it‘s encouraging enough to treat any significant correction calls heard elsewhere, as again plain wrong and premature, for the full picture view didn‘t support such calls in the first place, and you know what is being said about every broken clock being right twice a day…Having said so, let‘s turn to precious metals, which offered more than a few bullish signs way earlier in Feb. Based on the evolving charts and gold‘s failure to gain credible traction, I was at least able to time most of the downside before it happened – such as last week. Still, there has been little bullish that could be said about the PMs complex, as encouraging signs emerged only to be gone shortly. So, where do we stand at the moment?Gold and Copper to Oil RatioRising TLT rates are turning a corner, but the yellow metal is staying at the strong volume profile support zone that marks the April-May consolidation zone. Earlier today, gold cut all the way to its lower end (that‘s low $1,700s) before rebounding. The danger zone hasn‘t been cleared in the least yet, but the signs of silver reversing once again from a double test of $26, is as encouraging as copper rising again, and oil not tanking.The copper to oil ratio whose long-term perspective I featured yesterday, is making a clear turn on the daily chart. Coupled with the TLT stabilization, and the dollar trading with relatively little correlation to gold these days, the table is set for a short-term rebound in the metals. How far would these take the sector? The numerous bears would have you believe that not too far & that another downleg to ridiculously low values is at hand, but I am not convinced and prefer reading the tape instead. Yes, even in the mostly bearish PMs chart setups where nothing bullish has stuck for longer than several day over the past weeks. I repeat that the $1.9T stimulus bill (and infrastructure bill, even slavery reparations if we get that far really) hasn‘t been truly factored in by the markets – and yesterday‘s S&P 500 action proves that.Silver and MinersSilver keeps consolidating in a bullish pattern well above $26 still (not that it would be the line in the sand though), and when the silver miners (SIL ETF) start leading again, a new silver upleg would be born. For now, these are still mirroring the weak gold miners‘ performance, which is free from bullish signals for the yellow metal still. The gold sector isn‘t yet ready to run, plain and simple.SummaryStock bulls are on a solid recovery path, and new all time highs are again closer in sight. Crucially, the corporate credit markets and S&P 500 sectoral performance confirm, and once emerging markets join (the dollar weakens again), more fuel to the rally would be available.Gold remains precariously perched, yet isn‘t breaking down – the bull run off last spring‘s consolidation remains intact – regardless of the short-term gloom and doom. I see the metals as likely to recover next as the Treasury yields stop biting. Restating the obvious, gold is far from out of the woods.

Can the precious metals move lower before a short-term correction, and after correcting, will they continue their medium-term downtrend?Gold & silver reversed yesterday (Mar. 2) and the GDX rallied after bottoming right in my previous target area, but it’s still unclear if the bottom is in.Let’s check what’s happening in the charts.Figure 1 – COMEX Gold Futures (GC.F)In short, gold reversed yesterday after touching the upper border or my target area. Can the temporary bottom be in? Yes. Is it likely to be in? Not necessarily. Most likely it’s not in yet, because gold still hasn’t moved to its strong support levels.The size of the first part of the move sometimes tends to be identical or near-identical to the size of the final move. The size of the initial, August decline was almost just like the November decline. Now, copying the January 2021 decline to the current situation (blue, dashed lines), provides us with the target at about $1,675.The above price area coincides with the previous 2020 lows, and it’s also slightly below the 61.8% Fibonacci retracement based on the entire 2020 upswing. Gold would be likely to at least reach this retracement before forming the temporary bottom.Consequently, it would not be surprising to see gold suffering another ~$50 decline before finding a short-term bottom. More importantly though, if the initial move lower coincides with an S&P 500 correction, it would be likely to push mining stocks and silver lower in a more visible way.On the bullish front, the shape of yesterday’s candlestick does indeed look like an intraday reversal. And we saw the same kind of intraday reversal in silver.Figure 2 – COMEX Silver FuturesThe fact that silver’s triangle-vertex-based reversal is approximately today / was approximately yesterday (it’s unclear) further validates the scenario, in which precious metals move higher in the short term.I previously wrote that silver is likely to catch up with the decline at its later stage, while miners are likely to lead the way. That’s exactly what we’ve been seeing in the last few months. Silver is still likely to catch up with the declines when silver investors panic – just as they tend to do close to the end of given price moves (selling close to the bottom and buying close to the top). So far, miners remain the asset of choice for trading, but sometime during the next downswing, we might move to silver in order to magnify gains from both declines. As a reminder, please consider what happened on March 13 and March 16, 2020 and consider that the GDX ETF bottomed (in terms of the daily closing prices) on March 13. That was when silver was only in the middle of its decline.Speaking of mining stocks, let’s take a look at the GDX ETF chart.Figure 3 - VanEck Vectors Gold Miners ETF (GDX)The GDX moved higher shortly after we successfully exited our short positions, relatively close to the bottom. But is this rally about to take miners much higher before they turn south once again? It’s unclear at this time.It could be the case that we see an immediate move lower once again as gold declines to $1,675 or so, but it could also be the case that miners correct to $33 - $34 now, and then move to new lows later.All in all, it seems that we are already seeing the corrective upswing, or one is about to start after another very short-term downswing. Once this corrective upswing is over, the downtrend is likely to resume.Why would this be the case? There are myriads of reasons and I’m going over most of them each week in my flagship Gold & Silver Trading Alerts , but to name just a few, it’s gold’s invalidation of the breakout above its 2011 high, despite having an extremely positive fundamental picture, gold’s weak performance relative to the USD Index, miners’ relatively weak performance compared to gold, and the medium-term breakout in the USDX.And speaking of the USD Index, let’s take a look at its chart.Figure 4While the medium-term breakout continues to be the most important technical development visible on the above chart (with important bullish implications for the following months), there is one factor that could make the USD Index decline on a temporary basis.This factor is the similarity to the mid-2020 price pattern. I previously commented on the head and shoulders pattern that had formed (necklines are marked with dashed lines), but that I didn’t trust. Indeed, this formation was invalidated, but a bigger pattern, of which this formation was part, wasn’t invalidated.The patterns start with a broad bottom and an initial rally. Then it turns out that the initial rally is the head of a head-and-shoulders pattern that is then completed and invalidated. This is followed by a sharp rally, and then a reversal with a sizable daily decline.So far, the situations are similar.Last year, this pattern was followed by a decline to new lows. Now, based on the breakout above the rising medium-term support line, such a bearish outcome doesn’t seem likely, but we might see the pattern continue for several more days, before they disconnect. After all, this time, the USD Index is likely to really rally – similarly to how it soared in 2018 – and not move to new lows.What happens before the patterns disconnect? The USD Index could decline temporarily.This means that the temporary bottom in the precious metals and miners could have already formed, but it’s far from being crystal-clear.All in all, markets tend to reverse only after reaching important support or resistance levels, which means that PMs and miners might still move lower before their short-term corrective upswing, but it could also be the case that the latter is already underway. Depending on how many confirmations we get of the bullish outlook, it might or might not be a good idea to enter temporary long positions here. After all, the medium-term downtrend started in August 2020 and it remains intact – thus, quick long positions are against the trend and thus riskier.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

After March kicked off with a session that indicated the worst for stocks may be over (for now), Tuesday saw the indices sell-off towards the close.At least Rocket Mortgage (RKT) had a good day, though! And, at least the 10-year yield didn’t spike either. But that could change. Yields ticked up overnight to 1.433%, after President Biden pledged enough vaccine supply to inoculate every American adult by the end of May.So, where do we go from here? This positive economic and health news is excellent for reopening. But rising bond yields are a blessing and a curse. On the one hand, bond investors see the economy reopening and heating up. On the other hand, with the Fed expected to let the GDP scorch without hiking rates, inflation may return.I don’t care what Chairman Powell says about inflation targets this and that. The price of gas and food is increasing already. In fact, according to Bloomberg, food prices are soaring faster than inflation and incomes.For January, Consumer Price Index data also found that the cost of food eaten at home rose 3.7 percent from a year ago — more than double the 1.4 percent year-over-year increase in the prices of all goods included in the CPI.Can you imagine what this was like for February? Can you imagine what it will be like for March? I’m not trying to sound the alarm - but be very aware. These are just the early warning signs.So about March. Will it be more like Monday or Tuesday? Was the second half of February the start of the correction that I’ve been calling for? Or is the “downturn” already over? Only time will tell. While I still do not foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of this month could happen.Rising bond yields are concerning. Inflation signs are there. But structurally, I don’t think it will crash the market (yet).Corrections are also healthy and normal market behavior, and we are long overdue for one. It’s been almost a year now. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. A further downturn by the end of the month is very possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- a Buyable Slowdown?Figure 1- Nasdaq Composite Index $COMPThe Nasdaq’s slowdown has been long overdue. Even though more pain could be on the horizon, I like the Nasdaq at this level for some buying opportunities.But I’d prefer it drop below support at 13000 for real buying opportunities.But it can’t hurt to start nibbling now. If you waited for that perfect moment to start buying a year ago when it looked like the world was ending, you wouldn’t have gained as much as you could have.Plus, it’s safe to say that Cathie Wood, the guru of the ARK ETFs, is the best growth stock picker of our generation. Bloomberg News ’ editor-in-chief emeritus Matthew A. Winkler seems to think so too. Her ETFs, which have continuously outperformed, focus on the most innovative and disruptive tech companies out there. Not to put a lot of stock in one person. But it’s safe to say she knows a thing or two about tech stocks and when to initiate positions- and she did a lot of buying the last few weeks.I also remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.Before February 12, I would always discuss the Nasdaq’s RSI and recommend watching out if it exceeds 70.Now? As tracked by the Invesco QQQ ETF , the Nasdaq has plummeted almost 5.5% since February 12 and is closer to oversold than overbought!But it’s still not enough.Outside of the Russell 2000, the Nasdaq has been consistently the most overheated index. But after its recent slowdown, I feel more confident in the Nasdaq as a SHORT-TERM BUY.The RSI is king for the Nasdaq . Its RSI is now around 45.I follow the RSI for the Nasdaq religiously because the index is merely trading in a precise pattern.In the past few months, when the Nasdaq has exceeded an overbought 70 RSI, it has consistently sold off.December 9- exceeded an RSI of 70 and briefly pulled back.January 4- exceeded a 70 RSI just before the new year and declined 1.47%.January 11- declined by 1.45% after exceeding a 70 RSI.Week of January 25- exceeded an RSI of over 73 before the week and declined 4.13% for the week.Again- if the index drops below 13000, and the RSI hits undeniably overbought levels, get on the train.But because we haven’t declined just enough, I am making this a SHORT-TERM BUY. But follow the RSI literally and take profits once you have the chance to.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Stocks gave up some of Monday‘s strong gains, but I find it little concerning in the sub-3,900 pre-breakout meandering. It‘s about time, and a play on the tech sector to participate meaningfully in the coming rally (or at least not to stand in the way again). Talking obstacles, what about today‘s non-farm employment change, before the really key Fri‘s release? A bad number makes it less likely for market participants to bet on the Fed raising rates soon – but frankly, I don‘t understand where this hawkish sentiment is coming from, now when we‘re not at even talking taper. Raising rates in the current shape of the recovery, where we have commodities and financial asset prices rising, and that‘s about it? No, the current economic recovery isn‘t strong enough to entertain that thought. The need for stimulus asap is obvious. Thus, prior trends in the commodities and currency arenas are likely to continue, and not even the current long-term Treasuries stabilization can prevent the greenback from falling more than temporarily.Just as I wrote yesterday about stocks:(…) All right, we‘re seeing a rebound in progress, on the way to new highs.Gold scored modest gains yesterday, but these aren‘t enough to flip its short-term outlook bullish. Yes, it‘s sitting within the strong support zone (with another one over $40 further lower), and it isn‘t breaking down. It could actually stage a rebound precisely off this support zone next, as sharp rallies are born during the opposite sentiment clearly prevailing, which is what we have in gold now.Silver remains relatively solid, and commodities aren‘t breaking down. We have a month historically strong for copper, and I talked both yesterday and Monday what that means for the copper to oil ratio – and its relationship to gold, given the very accomodative monetary policy without real end in sight. This is then checked against nominal rates matching up against inflation, inflation expectations.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsYesterday‘s downswing didn‘t attract much volume, making it a short-term hesitation That‘s the meandering, the search for direction just below the 3,900 mark that I had been tweeting about yesterday. If you look at the equal weighted S&P 500 chart (RSP ETF), it‘s clear that new highs are still a little off given the sectoral balance of power.The market breadth indicators reflect the daily indecisiveness fittingly. While not worrying in themselves, they‘re showing that Monday‘s session wasn‘t the beginning of an endless bullish streak. Rather, it‘s just a part of the bullish turn that would over time prevail more convincingly.Credit MarketsThe key leading credit market ratio – high yield corporate bonds to short-dated Treasuries (HYG:SHY) – is slightly leaning bullish here. And that‘s good given the talk of bubble bursting, significant correction just ahead (started) – that‘s what I am looking for in uncertain times. Ideally though, such a bond market leadership should last a bit longer than one day, to lend it more credibility.TechnologyTechnology (XLK ETF) once again reversed to the downside, or so the chart says. While high, the volume isn‘t trustworthy – it doesn‘t stand comparison to the visually similar early Sep pattern, which was followed by a break to new lows in the latter half of the month. Then, as the overlaid S&P 500 (black line) shows, high beta pockets and value sectors have assumed leadership, powering the S&P 500 advance.DollarThe USD index is keeping close to the 91 mark, and yesterday‘s candle reveals that the potential upside isn‘t probably all that great. This is consistent with the dollar being in a bear market, sliding to new lows in 2021 with likelihood bordering on certainty. Plain and simple, it‘ll be on the defensive regardless of where long-term rates go.Gold and SilverGold had a good chance to rebound higher throughout this week, but didn‘t – given its Monday‘s performance, I had some reservations even as the support zone held, and upswing could easily follow – especially given the positive copper to oil ratio‘s move, or TLT not putting fresh pressure. But that‘s not happening in today‘s pre-market session, as the support‘s lower border is being tested again.Silver keeps holding the $26 level, and still trades at the 50-day moving average. While it‘s lagging behind both platinum and copper, its chart is (unlike gold‘s) bullish. Remember, the most bullish thing prices can do, is to rise. Not to rebound and fizzle out, only to rebound and fizzle out again, the way we see in gold as it keeps offering both bearish and bullish signs.OilOil keeps trading in a bullish fashion, and the 3-day long correction hasn‘t broken even Feb local lows yet. While we‘re for increased volatility in here, the uptrend remains strong, and volume currently doesn‘t support a deep correction theory. Just look how little have the retreating daily indicators achieved when it comes to the underlying price move? That‘s a reflection of a strong uptrend, which would be however best advised to resume sooner rather than later so as not to lose the technical advantage.SummaryStock bulls are on a recovery path, and new all time highs are basically a question of when the tech would step up to the plate again. Despite today‘s premarket weakness reaching well below the 3,870 level, the S&P 500 internals and credit markets performance (including foreign bonds) doesn‘t indicate that much downside potential currently. This correction‘s shape is largely in, and I mean the price downside – patience though will be needed before seeing new highs.Gold remains stuck in its support zone, unable to rally, not breaking down. The copper advantage of yesterday is lost for today, but seeing it and silver recover would be the most likely outcome once the immediate threat of rising Treasury yields retreats more noticeably. Gold is far from out of the woods, and flirting with the support level without a convincing rebound, is dangerous to the bulls.

One of our readers' favorite tools is the Adaptive Dynamic Learning (ADL) predictive modeling system.  This tool maps out technical and price patterns into an array of similar setups using historical data, then applies that data to current and future price bars.  Using the ADL predictive Modeling tool, we can see into the future based on historical technical analysis that maps statistically relevant price activity and shows us the highest probability outcomes. Monthly ADL Gold PredictionsIn this research article, we're going to focus on Gold and how current price action suggests a bottom is likely near the $1720 level.  The YELLOW price channels on this Monthly Gold chart highlight exactly where we believe support is located for Gold.  If this $1700 price level is breached to the downside, then the previous lows, near $1400, are the next support level for Gold.Our ADL predictive modeling system suggests the $1720 support level will hold, prompting a new rally to levels above $2200 within 30 to 60+ days.  The ADL system predicts an aggressive move in Gold near May or June 2021.  The move higher may happen earlier than the ADL Monthly predictions indicate.  There is a chance that a move back above $1850 starts the move higher before the end of March or April 2021 – propelling Gold toward the $2300+ peak.  The actual peak level predicted by the ADL predictive modeling system is $2315.2-Week ADL Predicts Gold May Start To Rally near Mid-MarchThis 2-Week Gold Chart highlights a similar ADL price prediction.  What we find interesting about this ADL outcome is the similar price predictions originating from vastly different origination points.  The Monthly ADL prediction originates from a date of August 1, 2020 – the peak price bar.  This 2-Week ADL prediction originates from a date of November 23, 2020 – the intermediate low DOJI bar before the recent continue downward trend targeting the YELLOW price channel. Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The similarities between these two unique ADL predictions suggest that Gold may attempt to find support fairly quickly near the $1700 to $1720 level, then attempt to move above $1795~1825 as an early stage rebound off the lower YELLOW price channel.  The 2-Week ADL price prediction suggests that Gold will quickly attempt to move higher, before or near March 20th, targeting levels above $1900.  Then, as you can see from the YELLOW DASH LINES on this chart, Gold will attempt to move moderately higher over the next 2 to 3+ months targeting levels above $2030.If these ADL price predictions are accurate and Gold does find a solid bottom near $1700, then we would want to watch for an upward price trend to start to setup near March 15th or so, attempting to push Gold prices above $1850 to $1900.  If that happens, then the next phase of the ADL price predictions would become even more relevant.  That means the upward price trend would attempt to target the $2050 level, then the $2300 level before June or July 2021.Our ADL predictive modeling system accurately called the rally in gold in 2019 and has delivered some incredible predictive analysis over the past few months.  You can read some of our earlier ADL predictions here:November 22, 2020: ADAPTING DYNAMIC LEARNING SHOWS POSSIBLE UPSIDE PRICE RALLY IN GOLD & SILVERAugust 4, 2020: REVISITING OUR SILVER AND GOLD PREDICTIONS – GET READY FOR HIGHER PRICESMarch 28, 2019: PRECIOUS METALS SETUP FINAL BUYING OPPORTUNITYMiner ETFs May See Big GainsIn terms of sector ETF trends, a stronger upside move in Gold would likely prompt Miner ETFs to also move dramatically higher over the next 30 to 60+ days.  This GDXJ Weekly chart highlights a Fibonacci 100% measured move higher which suggests the $73.91 and $91.71 levels could become our next upside targets. Additionally, one has to consider the process that would likely prompt Gold to move higher throughout this span of time.  A continued commodity rally could prompt some of this move to happen, but fear would also have to be factored into this move if Gold were to rally above $2300 as the ADL system predicts.  Any renewed fear would likely come from global financial or credit market concerns or be related to hyper-inflation concerns.  We'll have to see how things progress throughout the rest of 2021 to really get a better feel for what may be driving this upward price trend.We suggest traders pay very close attention to what happens in Gold over the next 2 to 4+ weeks.  If our ADL predictions are accurate, we could see some really big moves in the global markets, various sectors and metals/miners very quickly. If the markets start to roll over and volatility rises, we can benefit from it with our Options Trading Signals which we use non-direction trades to sell premiums. This allows options traders to profit from volatility and not worry about which way the market moves.Don’t miss the opportunities in the broad market sectors in 2021, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. 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Scary selling yesterday? See how little the downswing has achieved technically, check out the other characteristics, and you‘ll probably reach the same conclusion I did. It‘s still about the tech getting its act together while much of the rest of the market is doing quite fine.The credit market confirm, as is obvious from the HYG:SHY ratio chart I‘m showing you. True, long-term Treasuries are under pressure, but I wrote on Monday that not even considerably higher rates would break the bulls‘ back. The dollar isn‘t getting far, and given tomorrow‘s non-farm payrolls, which are expected to be rather bad… Check instead another chart I am featuring today, and that‘s volatility – this correction appears in its latter stages as the crash callers „now, this quarter, whenever because it‘s allegedly overdue“, will be again surprised and backtracking in tone once the market gets what it wants: more liquidity.That was stocks, what about gold? No shortage of gloomy charts there, accompanied by various calls for a local bottom. The most bullish one (me included, talks about a possible bottom being made here, with the $1,700 to $1,690 zone able to stop the downside. I am though also raising the lower border of the Apr-May 2020 consolidation, which is around $1,670, as an even stronger support (over $40 lower than the above one) than the volume profile based one we‘re still at currently – and based on different tools, I am far from alone. The doomsayers‘ scary clickbaitish targets of $1,500 or $1,350 are in the minority, and about as helpful as calls for $100 silver before years‘ end. As I always say, let‘s be realistic, honest, and act with real integrity. People deserve better than to be played around through fear or greed.Silver remains in a solid uptrend, and so does platinum. Regardless of today‘s premarket downswing taking copper over 4% down as we speak, commodities are happily running higher in the face of „no inflation here, move along“ calls. How far is the Fed announcing yield curve control, or at least a twist program? Markets crave more intervention, and those calling for rate hikes to materialize soon, are landing with egg on their faces – mark my words, the Fed is going to stay accommodative longer than generally anticipated – have we learned nothing from the Yellen Fed?Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsYesterday‘s downswing didn‘t attract outstanding volume, and didn‘t overcome Fri‘s one. Regardless of the visit to the lower border of recent trading range, the bears would have to become more active to flip this chart bearish really.Credit MarketsThe key leading credit market ratio – high yield corporate bonds to short-dated Treasuries (HYG:SHY) – hasn‘t really broken down yesterday. Just a consolidation that has an inverse head and shoulders shape on top. Of course, until the neckline is broken, there are no bullish implications, but I am looking for higher HYG:SHY values regardless.VolatilityYesterday‘s volatility – and put/call readings too – are very tame, and that detracts from the credibility of a significant downswing starting here considerably.TechnologyTechnology (XLK ETF) compared to the value stocks (VTV ETF) shows clearly once again the performance difference – tech still taking time and basing, while value sectors and high-beta segments keep doing largely fine. This view isn‘t one that‘s associated with the onset of real corrections – but with waiting for the tech to start behaving for new highs to be attainable once again.Gold and SilverGold still has a good chance to rebound higher, even though it missed yesterday‘s opportunity that would have resulted in a nice hammer candlestick. Nevermind, we have to live with what we have – and the support is still unbroken, not ruling out an upswing in the least. Yes, regardless of the deeply negative Force index which really wasted each prior opportunity to turn positive this winter. The metals would do well to get used to living with higher nominal rates really, when the real rates are little changed. Silver keeps doing much better, which is little surprising given the economic recovery, leading indicators not weakening, manufacturing activity doing fine – it‘s a versatile metal, both industrial and monetary after all. Compare how little has its Force index declined vs. gold – this is rather a bullish chart, unlike gold still searching for direction (i.e. without an established uptrend).CopperLet‘s compare the red metal (perched high, digesting steep Feb gains) to platinum and silver. I‘m featuring copper as the key determinant for precious metals, also given the positive Mar seasonality. The above chart fittingly illustrates the bull market‘s strength – and the waiting on gold to join.SummaryStock bulls have to once again take the trip to the 3,900 mark, and when that happens, depends on the tech the most. The S&P 500 internals and credit market performance remains sound, and new highs are a question of time (and stimulus).Gold remains stuck in its support zone, unable to rally, not breaking down. While copper is retreating today, the technical odds favor a rebound off this support. Once that happens, it would be though still too early to call for the new gold bull upleg to resume – much more would need to happen, such as the miners doing really well, and so on. But we‘ll get there.

Gold remains in a bearish trend as economic confidence has improved, however, inflation can change all that around.The chart presenting gold prices in 2021 doesn’t look too encouraging. The yellow metal continued its bearish trend at the turn of February and March. So, as one can see, the price of gold has declined from $1,943 on January 4 to $1,711 on Wednesday (Mar. 3) This means a drop of 232 bucks, or 12 percent since the beginning of the year.What is happening in the gold market? I would like to blame the jittering bond market and increasing bond yields , but the uncomfortable truth is that the yellow metal has slid in the past few days despite the downward correction in the bond yields. If you don’t believe, take a look at the chart below. This is an important bearish signal, given how closely gold is usually linked to the real interest rates .So, it seems that there are more factors at work than just the bond yields. One of them is the recent modest strengthening of the greenback , probably amid rising U.S. interest rates and ECB officials’ remarks about possible expansion of the ECB’s accommodative stance if the selloff in the bond market continues.Another piece of bearish news for the gold market is that President Joe Biden struck a last-minute stimulus deal with Democratic Senators that narrows the income eligibility for the next round of $1,400 stimulus checks. It means that the upcoming fiscal stimulus will be lower than previously expected, negatively affecting inflation expectations and, thus, the demand for gold as an inflation hedge .Lastly, I have to mention the high level of confidence in the economy. Indeed, the recent rise in the bond yields may just be a sign of more optimism about the economic recovery from the pandemic recession . Hence, despite all the economic problems the U.S. will have to face – mainly the huge indebtedness or actually the debt-trap – investors have decided to not pay too much attention to the elephants in the room. As the chart below shows, the credit spread (ICE BofA US High Yield Index Option-Adjusted Spread), which is a useful measure of economic confidence, has returned to the pre-pandemic level, indicating a strong belief in the state of the economy. This is, of course, bad for safe-haven assets such as gold.Implications for GoldWhat does this all mean for gold prices? Well, from the long-term perspective, the recent slide to almost $1,700 could just be noise in the marketplace. But gold’s disappointing performance is really disturbing given the seemingly perfect environment for the precious metals . After all, we live in a world of negative interest rates , a weak U.S. dollar, rising fiscal deficits and public debt , soaring money supply and unprecedented dovish monetary and fiscal policies . So, the bearish trend may be more lasting, as market sentiment is still negative. Investors usually turn to gold, a great portfolio diversifier and a safe haven , when other investment are falling. But the worst is already behind us, the economy has already bottomed out, so confidence in the economy is now high, and equities are rising.Having said that, the recent jump in the bond yields also means rising inflation expectations . Indeed, as the chart below shows, they have already surpassed the levels seen before the outbreak of the pandemic .Actually, the 5-year breakeven inflation rate has reached 2.45 percent, the highest level since the midst of the Great Recession . So, in some part, investors are selling bonds, as they are preparing for an reflation environment marked by higher inflation . At some point, if the fear of inflation strengthens, then economic confidence will waver, and investors could again turn toward gold.If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care

Here are the facts why there is a higher likelihood for Silver prices to advance:A lot of news items attract buyers. Silver is in the limelight.Physical Silver prices trade up to 30% over the spot price.We had a bullish twelve-month period for Silver prices. Consequently, describing the first leg of a trend. With a high probability of two more legs to be following.We see money inflow into the precious metal sector as a whole. These are safe haven seeking investments due to the threat of hyperinflation caused by unprecedented fiscal and monetary stimulus.Possible highest ever physical delivery months within this year for Silver futures traded on the COMEX exchange.Daily Chart of Silver in US-Dollar, Good support:Silver in US Dollar, daily chart as of March 5th, 2021.Looking at this sideways range, we find ample support of prices within the range right now as a healthy spot to acquire physical Silver. We pointed out that last time around prices touched the simple 200 moving average, Silver prices exploded. We expect a similar scenario now. There is a likelihood that prices might already take off in the upcoming week here from the secondary volume analysis support point (POC=point of control). These stacked up edges of support provide for tighter stops and great risk-reward ratios.  Gold in US-Dollar, Monthly Chart, Stacking Odds:Gold in US Dollar, monthly chart as of March 5th, 2021.A great way timing your Silver entry is also looking at inter-market relationships. Once Gold, the sector leader, will find its support, Silver will follow. This technique might help distinguish if Silver will be bouncing from primary or secondary POC in the upcoming week (as indicated in the first chart of this article).The monthly chart above shows that Gold has entered a prime buy zone between US$1,650 and US$1,700. Both the Fibonacci retracement and the fractal volume analysis demand zone substantiate that fact.Gold in US-Dollar, Monthly Chart, Silver, don’t be fooled:Gold in US Dollar, monthly chart as of March 5th, 2021.Another view at Gold reveals that it bounced strongly last time it touched its simple 20 months moving average. It is a confirmation that we might be able to temporarily bottom here and support a possible Silver up move. In such a case Silver might be temporarily topping by mid-August to mid-September this year. At that time, Silver will be ripe for partial profit taking to reduce long-term risk by using our quad exit strategy.Our thinking is all programmed for a hundred years to benchmark against dollars. I am sure you have noticed your groceries to be more expensive now or better said, everything being more expensive. Maybe thinking the dollar is worth less is a more somber way of perceiving the change. Benchmarking against Silver or Gold or even Bitcoin might be a more accurate measure of value perception. Average monthly wages in Venezuela representing a value of US$6 are an excellent example of what hyperinflation can look like.If you are holding your wealth in US-Dollars only, you are at extreme risk. We are not too specific on Silver or Gold or mining companies or Bitcoin or land, but we are risk averse. We urge you to look critically at fiat currency holdings. The risk/reward-ratio of Silver at this time is excellent. Usable as a hedge against this risk!Silver, don’t be fooled:When you hear from many various sources that Silver “is the thing to buy,” it feels like “too good to be true.” Sound fundamental analysis shows that holding physical Silver is, in fact, a prudent course of action. Silver prices are manipulated. They do not reflect true value. Physical prices trading much higher than the spot price. Once truth can’t be suppressed anymore, we see a fair likelihood for Silver prices to advance rapidly. Our conservative targets for the Silver market point at annual highs near Labor Day. At that point we aim to take partial profits.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|March 5th, 2021|Tags: Gold, low risk, Silver, silver bull, Silver Chartbook, technical analysis, time frame, trading principles|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

I called Jay Powell's bluff a week ago. Remember when he said last week that we're still far from The Fed's inflation targets?Well, I was right to doubt him. The market didn't like his change in tone Thursday (Mar. 5).You see, when bond yields are rising as fast as they have, and Powell is maintaining that Fed policy won't change while admitting that inflation may " return temporarily ," how are investors supposed to react? On the surface, this may not sound like a big deal. But there are six things to consider here:It's a significant backtrack from saying that inflation isn't a concern. By admitting that inflation "could" return temporarily, that's giving credence to the fact that it's inevitable.The Fed can't expect to let the GDP scorch without hiking rates. If inflation "temporarily returns," who is to say that rates won't hike sooner than anyone imagines?Fool me once, shame on me, fool me twice...you know the rest. If Powell changed his tune now about inflation, what will he do a few weeks or months from now when it really becomes an issue?Does Jay Powell know what he's doing, and does he have control of the bond market?A reopening economy is a blessing and a curse. It's a blessing for value plays and cyclicals that were crushed during COVID and a curse for high-flying tech names who benefitted from "stay-at-home" and low-interest rates.The Senate will be debating President Biden’s $1.9 trillion stimulus plan. If this passes, as I assume it will, could it actually be worse for the economy than better? Could markets sell-off rather than surge? Once this passes, inflation is all but a formality.Look, it's not the fact that bond yields are rising that are freaking out investors. Bond yields are still at a historically low level, and the Fed Funds Rate remains 0%. But it's the speed at which they've risen that are terrifying people.According to Bloomberg , the price of gas and food already appear to be getting a head start on inflation. For January, Consumer Price Index data also found that the cost of food eaten at home rose 3.7 percent from a year ago — more than double the 1.4 percent year-over-year increase in all goods included in the CPI.The month of January. Can you imagine what this was like for February? Can you imagine what it will be like for March?I'm not trying to sound the alarm- but be very aware. These are just the early warning signs.So, where do we go from here? Time will tell. While I still do not foresee a crash like we saw last March and feel that the wheels remain in motion for a healthy 2021, that correction that I've been calling for has already started for the Nasdaq. Other indices could potentially follow.Finally.Corrections are healthy and normal market behavior, and we have been long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).Most importantly, this correction could be an excellent buying opportunity.It can be a very tricky time for investors right now. But never, ever, trade with emotion. Buy low, sell high, and be a little bit contrarian. There could be some more short-term pain, yes. But if you sat out last March when others bought, you are probably very disappointed in yourself. Be careful, but be a little bold right now too.There's always a bull market somewhere, and valuations, while still somewhat frothy, are at much more buyable levels now.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. A further downturn by the end of the month is very possible, but I don't think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- From Overbought to Oversold in 3 Weeks?Figure 1- Nasdaq Composite Index $COMPThe Nasdaq is finally in correction territory! I have been waiting for this. It’s been long overdue and valuations, while still frothy, are much more buyable. While more pain could be on the horizon until we get some clarity on this bond market and inflation, its drop below 13000 is certainly buyable.The Nasdaq has also given up its gains for 2021, its RSI is nearly oversold at about 35, and we’re almost at a 2-month low.It can’t hurt to start nibbling now. There could be some more short-term pain, but if you waited for that perfect moment to start buying a year ago when it looked like the world was ending, you wouldn’t have gained as much as you could have.Plus, it’s safe to say that Cathie Wood, the guru of the ARK ETFs, is the best growth stock picker of our generation. Bloomberg News ’ editor-in-chief emeritus Matthew A. Winkler seems to think so too. Her ETFs, which have continuously outperformed, focus on the most innovative and disruptive tech companies out there. Not to put a lot of stock in one person. But it’s safe to say she knows a thing or two about tech stocks and when to initiate positions- and she did a lot of buying the last few weeks.I think the key here is to “selectively buy.” I remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.I also think it’s an outstanding buying opportunity for big tech companies with proven businesses and solid balance sheets. Take Apple (AAPL), for example. It’s about 30% off its all-time highs. That is what I call discount shopping.What’s also crazy is the Nasdaq went from overbought 3 weeks ago to nearly oversold this week. The Nasdaq has been trading in a clear RSI-based pattern, and we’re at a very buyable level right now.I like the levels we’re at, and despite the possibility of more losses in the short-run, it’s a good time to start to BUY. But just be mindful of the RSI, and don’t buy risky assets. Find emerging tech sectors or high-quality companies trading at a discount.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Powell gave a wait-and-see answer to my yesterday‘s rhetorical question about the bears just starting out, indeed. The S&P 500 plunged, breaking far outside the Bollinger Bands confines, illustrating the extraordinary nature of the move. Rebound would be perfectly natural here (and we‘re getting one as we speak) – but will it be more than a dead cat bounce?Stocks partially recovered from last Friday‘s intraday plunge, and good news about the stimulus clearing House followed after the market close – stock bulls took the opportunity, and Monday‘s session gave signs that the worst is over. Tuesday‘s move partially negated that, but even after Wednesday, the short-term case was undecided (even as tech kept acting relatively weak).Yesterday‘s session though gives the short-term advantage to the bears, and that‘s because of the weak performance I see in other stock market indices and bonds. The Russell 2000 got under pressure, negating what by yesterday still looked like a shallow correction there. So did the emerging markets and their bonds. More downside can materialize either suddenly or slowly over the coming say 1-2 weeks. It depends on the tech and its heavyweight names, where these find support. Corporate credit markets aren‘t weakening as dramatically though – as you‘ll see illustrated later on, both high yield corporate bonds and the HYG:SHY ratio are holding up much better than stocks. While that‘s bullish, the S&P 500 apparently hasn‘t yet learned to live with higher rates – let alone considerably higher ones.The key element playing the markets now, is the Fed‘s approach to inflation, rising long-term Treasuries in the face of central bank inaction and inflation denialism, which translates into the dollar taking the turn higher courtesy of the stresses induced across many asset classes. I asked yesterday:(...) How far is the Fed announcing yield curve control, or at least a twist program? Markets crave more intervention, and those calling for rate hikes to materialize soon, are landing with egg on their faces – mark my words, the Fed is going to stay accommodative longer than generally anticipated – have we learned nothing from the Yellen Fed?The ostrich pose on inflation isn‘t helping – it‘s sending Treasuries down, turning much of the rest red. Does the Fed want to see the market forcing some kind of answer / action the way it did in Dec 2018? The Fed is risking such a development now, this time through inaction, and not thanks to monetary tightening as back then.While some argue that inflation just brings a Fed rate hike closer, I really doubt that this option is treated seriously inside the Eccles building. It would be the right choice if you were serious about fighting inflation before it takes root – but in whose interest is that? Just look at the transitory statements, Fed official beliefs that to see it hit even 3% would be extraordinary, and you understand that their models understating it considerably in the first place, aren‘t even sending them the correct, magnitudinal signals.I see it as more probable that they would just try to suppress its symptoms, and succumb to the markets even more vocally demanding some action, by going the twist route. In effect, they would be then fighting the war on two fronts, as I explained in the middle of Feb already.Food inflation running hot, commodities on fire, and gold is going nowhere still. The bears are vocal, and I‘ve laid down a realistic game plan yesterday, discussing the gold support levels and perspectives. If you‘re disappointed that gold isn‘t doing as well as commodities, consider the mid-Feb described cascading inflation process as it devours more and more of the financial landscape – we still have a weak job market that doesn‘t contribute to the inflationary pressures, relegating the true, undeniable inflation to the 2022-3 timeframe.Let‘s keep the big picture – gold is in a secular bull market that started in 2018 (if not in late 2015), and what we‘re seeing since the Aug 2020 top, is the soft patch I called. The name of the game now, is where the downside stops – I am not capitulating to (hundreds dollars) lower numbers below $1,650 on a sustainable basis. The new precious metals upleg is a question of time even though the waiting is getting longer than comfortable for many, including myself. Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsReasonably heavy volume with most of yesterday‘s candle, pushing vigorously to start a new downtrend. Given yesterday‘s move, some kind of retracement is likely today as a minimum, but the bears have the upper hand now.Credit MarketsHigh yield corporate bonds (HYG ETF) haven‘t declined below last week‘s lows, and are still at bullish divergence readings. Will they keep above these? Doing so is essential for the still unfolding S&P 500 correction.High yield corporate bonds to short-dated Treasuries (HYG:SHY) aren‘t as panicky as stocks here, which is more than mildly optimistic.Put/Call Ratio and VolatilityThe put/call ratio is well below the Feb or Jan highs, while the volatility index is much higher relatively to these. While that‘s an opportunity for even more panic, volatily would quickly die down if today‘s S&P 500 upswing sticks. Then, it would be time to evaluate the changes in posture. Either way, this correction appears to have longer to run still.TechnologyTechnology (XLK ETF) compared to the value stocks (VTV ETF) shows where the engine of decline is – and it‘s starting to have an effect on value, high beta plays. Not until tech stabilizes, can the correction be called as really close to over – just check how the equal weighted S&P 500 (RSP ETF) suffers right now.Gold, Silver and MinersAnother bite into the volume profile support zone, and the gold upswing isn‘t here still. Another missed daily opportunity to rebound. The yellow metal is still in a precarious position until it shakes off the rising (nominal, not real) rates albatross.Silver is in a technically stronger position, but signs of deterioration are creeping here too. It‘s painfully obvious when the miners are examined – the silver ones are leading to the downside, and the gold ones, well seniors outperforming juniors isn‘t a sign of strength really. The sky isn‘t definitely clear here.SummaryStock bulls have to once again try to repair the damage, and their success depends on the tech the most. The S&P 500 internals are slightly deteriorating, but the credit market performance remains more solid. New highs remain a question of time (and the stimulus carrot).Gold remains acting weak around the lower border of its support zone, and silver is joining in the deterioration, not to mention the mining indices. The yellow metal is though short-term holding up rather well, when the TLT and USDX pressures are considered.

Folks, it seems that gold has formed an interim bottom, and a short-term corrective upswing is now likely, before the medium-term downtrend resumes.Any further declines from this point are not likely to be significant for the short-term. The same applies to silver and the miners.In yesterday’s (Mar. 4) intraday Gold & Silver Trading Alert , I described briefly why I think that the very short-term bottom is already in (or is at hand), and in today’s analysis, I’ll illustrate my points with charts. Let’s start with gold.Figure 1 – COMEX Gold Futures (GC.F)Gold just reached its 61.8% Fibonacci retracement level (based on the entire 2020 rally), and it just bounced off the declining red support line based on the August and November 2020 bottoms.Gold didn’t reach the previous 2020 lows just yet, but it moved very close to them and the two strong above-mentioned support levels could be enough to trigger a corrective upswing. After all, no market can move up or down in a straight line without periodic corrections.I previously wrote that when gold moves $1,693 we’ll be closing any remaining short positions, and when gold moves to $1,692, we’ll automatically open long positions in the miners. Since gold moved below $1,690, that’s exactly what happened.Yesterday (Mar. 4), gold futures were trading below $1,692 for about 10 minutes, so if you acted as I had outlined it in the Gold & Silver Trading Alerts, you made your purchases then. The GDX ETF was trading approximately between $30.80 and $31 (NUGT was approximately between $49.30 and $50) at that time – this seems to have been the exact daily bottom.One of the bullish confirmations came from the silver market .Figure 2 – COMEX Silver FuturesI previously wrote that silver is likely to catch up with the decline at its later stage, while miners are likely to lead the way.While gold miners showed strength yesterday, silver plunged over 4% before correcting part of the move. Yesterday’s relative action showed that this was most likely the final part of a short-term decline in the precious metals sector, and that we should now expect a corrective rebound, before the medium-term decline resumes. If not, it seems that the short-term bottom is at hand and while silver might still decline somewhat in the very short term, any declines are not likely to be significant in case of the mining stocks. At least not until they correct the recent decline by rallying back up.Speaking of mining stocks, let’s take a look at the GDX ETF chart.Figure 3 - VanEck Vectors Gold Miners ETF (GDX)Mining stocks showed strength yesterday. Even though gold moved visibly to new yearly lows, the GDX didn’t move to new intraday lows. The GDXJ did move to new intraday lows, but the decline was relatively small compared to what happened in gold and to what happened on the general stock market. The latter declined substantially yesterday and the GDXJ is more correlated with it than GDX – hence GDXJ’s underperformance was normal. Still, compared to both gold’s decline and stocks’ decline, the GDXJ and GDX declined very little.The price level at which miners showed strength matters greatly too. Miners stopped their decline practically right in my target area, which I based on the 50% Fibonacci retracement and the 2020 highs and lows. Moreover, the proximity of the $31 level corresponds to the 2019 high and the 2016 high. Since so many support levels coincide at the same price (approximately), the latter is likely to be a very strong support.Moreover, the RSI was just close to 30, which corresponded to short-term buying opportunities quite a few times in the past.How high are miners likely to rally from here before turning south once again? The nearest strong resistance is provided by the neck level of the previously broken head and shoulders pattern, which is slightly above $34.Also, let’s keep in mind the mirror similarity in case of the price action that preceded the H&S pattern and the one that followed it. To be precise, we know that the second half of the pattern was similar to its first half (including the shape of pattern’s shoulders), but it’s not yet very clear if the follow-up action after the pattern is going to be similar to the preceding price action. It seems quite likely, though. If this is indeed the case, then the price moves that I marked using green and purple lines are likely to be at least somewhat similar.This means that just as the late-April 2020 rally was preceded by a counter-trend decline, the recent decline would likely be followed by a counter-trend rally. Based on the size of the April counter-trend move, it seems that we could indeed see a counter-trend rally to about $34 this time.There’s also an additional clue that might help you time the next short-term top, and it’s the simple observation that it was relatively safe to exit one’s long positions five trading days after the bottom.That rule marked the exact bottom in November 2020, but it was also quite useful in early February 2021. In early December 2020, it would take one out of the market only after the very first part of the upswing, but still, let’s keep in mind that it was the “easy” part of the rally. The same with the October 2020 rally. And now, since miners are after a confirmed breakdown below the broad head and shoulders pattern, it’s particularly important not to miss the moment to get back on the short side of the market, as the next move lower is likely to be substantial. Therefore, aiming to catch the “easy” part of the corrective rally seems appropriate.So, if the bottom was formed yesterday, then we can expect to take profits from the current long position off the table close to the end of next week.Finally, let’s take a look at the USD Index.Figure 4 – USD IndexWhile the medium-term breakout continues to be the most important technical development visible on the above chart (with important bullish implications for the following months), there is one factor that could make the USD Index decline on a temporary basis.This factor is the similarity to the mid-2020 price pattern. I previously commented on the head and shoulders pattern that had formed (necklines are marked with dashed lines), but that I didn’t trust. Indeed, this formation was invalidated, but a bigger pattern, of which this formation was part, wasn’t invalidated.The patterns start with a broad bottom and an initial rally. Then it turns out that the initial rally is the head of a head-and-shoulders pattern that is then completed and invalidated. This is followed by a sharp rally, and then a reversal with a sizable daily decline.So far, the situations are similar.Last year, this pattern was followed by a decline to new lows. Now, based on the breakout above the rising medium-term support line, such a bearish outcome doesn’t seem likely, but we might see the pattern continue for several more days, before they disconnect. After all, this time, the USD Index is likely to really rally – similarly to how it soared in 2018 – and not move to new lows.What happens before the patterns disconnect? The USD Index could decline temporarily.Back in November 2020, the second top was below the initial one, and we just saw the USD Index move to new yearly high. Did the self-similar pattern break yet? In a way yes, but it doesn’t mean that the bearish implications are completely gone.In mid-2020, the USD Index topped after moving to the previous important intraday low – I marked it with a horizontal line on the above chart.Right now, the analogous resistance is provided by the September 2020 bottom and at the moment of writing these words, the USD Index moved right to this level.Consequently, it could be the case that we see a decline partially based on the above-mentioned resistance and partially based on the remaining self-similar pattern. The latter would be likely to lose its meaning over the next several days and would be decisively broken once the USD Index rallies later in March. The above would create a perfect opportunity for the precious metals sector to correct the recent decline – and for miners (GDX ETF) to rally to $34 or so.Please note that if gold rallies here – and it’s likely to – then this will be the “perfect” time for the gold and stock market permabulls to “claim victory” and state that the decline is over and that they were right about the rally all along. Please be careful when reading such analyses in the following days, especially if they come from people that have always been bullish. If someone is always bullish, the odds are that they won’t tell you when the next top is going to be (after all, this would imply that they stop being bullish for a while). Just because anyone can publish an article online, doesn’t mean that they should, or that others should follow their analyses. The internet is now replete people who claim to have expertise in the markets, and we all saw what happened to the profits of those who bought GameStop at $300. It’s the same thing that happened to the profits of those who were told since the beginning of this year that gold is going to rally – they turned into losses. What we see as well are internet echo chambers, where you are more likely to only read articles that express what you already agree with, instead of being exposed to differing viewpoints that shed light on other critical factors.Gold is likely to rally from here, but it’s highly unlikely that this was the final bottom, and that gold can now soar to new highs. No. The rally in the USD Index has only begun and while it could pull back, it’s likely to soar once again, similarly to how it rallied in 2018. And gold is likely to respond with another substantial wave lower. This doesn’t mean we’re permabears either or that we want to see gold fail. On the contrary, gold has a bright future ahead, but not before it goes through a medium-term decline after this corrective rally is over.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

At this point in our lives, we are hoping the new COVID-19 vaccines will do their part to help move the world towards more normal consumer and economic activities.  The US Senate recently a new $1.9 Trillion stimulus package that should continue to provide assistance to various levels of consumer, state governments, and corporate enterprises.  The next question in our mind is “what will the recovery look like if/when it happens?”.  We need to look at three critical components of the global economy to help answer this question: Consumer Activity, Debt, and Supply/Demand Functions.Consumer activity makes up more than 60% of the US GDP.  It also drives money flow as consumers engage in economic activity, create credit for new purchases and help to balance the supply/demand equilibrium functioning properly.  The participation of the consumer within an economy is essential for a healthy growing economy.WHERE ARE CONSUMERS NOW & WHERE WILL THEY BE IN THE FUTURE?The US has passed more than $4 Trillion in COVID-19 stimulus over the past 12+ months.  At the same time, global central banks have also engaged in various easy money policies to spark global economic activity.  When we combine the efforts of world governments and central banks, we've seen an unprecedented amount of money deployed throughout the globe recently – and that money needs to find its purpose and use in the global economy quickly of the global economy is going to recover enough to spark a new wave of economic growth.We believe two key components of consumer engagement are at play right now; investing/trading in the US and global markets and Real Estate.  Whereas US consumers have been reducing debt exposure on credit cards and tightening their spending in other ways, trading volumes in the stock market Indexes and ETFs have increased dramatically over the past 12 months.  Additionally, low supply and low interest rates have kept the US housing market active, in addition to the boost in activity from people moving to more rural areas as the work-from-home phenomenon settles into the new normal.CASE-SHILLER HOME PRICE INDEXThis Case-Shiller 20-City Composite Home Price Index chart, below shows how quickly home prices have rallied over the past 12 months. Just prior to the COVID-19 pandemic, this index was flattening.  Then the moratorium on foreclosures and extended assistance for homeowners pulled many homes back off the market in early 2020.  That reduced supply and prompted a rally in home prices across the US.The assistance provided to these “at-risk” homeowners accomplished two very important economic benefits.  It eliminated a wave of new foreclosures (albeit possibly temporarily) and it prompted a seller's market because supply had been constricted.  The result is that many homeowners witnessed a 6% to 10% increase in their home values over the last 12+ months.DELINQUENCY RATES ON CONSUMER LOANSUnlike in 2006-2008 when delinquency rates skyrocketed during the housing crisis, throughout the COVID-19 pandemic, delinquency rates collapsed to the lowest levels over the past 25+ years.  Consumers took their extra capital, stimulus checks, and federal assistance and used the past 12+ months to eliminate certain debts.  Even though we are starting to see an uptick in delinquency rates in Q4 2020, these levels would have to climb considerably before we get close to the levels before the COVID-19 pandemic.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!This suggests that a broad spectrum of US consumers are in a much better economic position related to revolving debt, or credit card debt, than they were before the COVID-19 pandemic.  If these consumers begin to engage in a new economic recovery by engaging in a healthy credit expansion, we may see a boost to certain sectors of the economy over the next 24 to 36+ months.REAL PERSONAL CONSUMPTION EXPENDITURESUnlike many other indicators, Real Personal Consumption has risen past the pre-COVID-19 peak levels.  This suggests that consumers are still spending money on Durable Goods and are continuing to buy essential items to support their lifestyles and families.  Yes, there are a number of people that are unemployed or have transitioned to other types of work, but the stimulus efforts and extended unemployment assistance has translated into real consumer engagement for Durable Goods, as we can see from the chart below.Remember, Durable Goods are not typically found at Grocery Stores or Walmart.  They are items that have extended life-cycles (greater than three years); such as cars, planes, trains, furniture, appliances, jewelry, and books.  This rise in Durable Goods suggests that a large segment of the US consumer is actively engaged in making bigger-ticket purchases recently – possibly as a result of buying a new home, transitioning away from traditional work environments, and/or repositioning family essentials in preparation for a post COVID-19 world.  This type of economic engagement may continue for many months forward.CONSUMER PRICE INDEX – ALL URBAN CONSUMERSThe following Consumer Price Index chart shows that general consumer prices briefly dipped when COVID-19 hit in March 2020, but they have since rallied to new highs.  This is partially a result of the rise in home prices and rising commodity prices, which contribute to a rise in price levels for consumers.All of this data is showing that the US consumer is actually much more economically healthy than consumers were in the midst of the 2007-08 housing crisis. The stimulus efforts and partial economic shutdown did result in a large number of displaced or disadvantaged consumers, but it also shows that many US consumers were able to quickly transition into a different type of economic environment with very little extended economic risks.The new $1.9 Trillion stimulus package will offer even more assistance to consumers.  This new stimulus will be spent as new COVID-19 vaccines are being rolled out, suggesting the US is quickly moving away from extended risks related to the pandemic.  This means consumers will likely start attempting to go back to normal in certain ways.  Does this mean that the recovery efforts will strengthen the bullish price trend in the future and the US stock markets will continue to rally?In our effort to better identify opportunities for traders and investors as the post-COVID-19 recovery unfolds, we will continue to identify various market sectors that my research team and I believe have a strong potential for increased bullish price trends.  All of the data we've presented so far suggests the US consumer is much healthier than many people consider and that many US consumers are still actively engaged in some type of work/income solution.  The only reason why housing, durable goods, CPI, and other economic indicators continue to rise is because US consumers are actively engaged in buying/consuming bigger, durable goods.  This suggests the new $1.9 Trillion COVID relief effort may begin to push the US economy further into overdrive, and possibly pushing the supply/demand balance even further beyond the equilibrium zone.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.In Part II of this article, we'll take the data we've reviewed already and apply it to current market conditions, trends, and technical setups as we look for new opportunities in consumer-based sectors.  My team and I believe some very big sector trends are going to set up as a result of everything that is converging on the US and global markets.  It's time to get ready for some big trends. 

Stocks sharply reversed intraday, and closed just where they opened the prior Friday. That indicates quite some pressures, quite some searching for direction in this correction that isn‘t over just yet. Stocks have had a great run over the past 4 months, getting a bit ahead of themselves in some aspects such as valuations. Then, grappling with the rising long-term rates did strike.So did inflation fears, especially when looking at commodities. Inflation expectations are rising, but not galloping yet. What to make of the rising rates then? They‘re up for all the good reasons – the economy is growing strongly after the Q4 corona restrictions (I actually expect not the conservative 5% Q1 GDP growth, but over 8% at least) while inflation expectations are lagging behind. In other words, the reflation (of economic growth) is working and hasn‘t turned into inflation (rising or roughly stable inflation expectations while the economy‘s growth is slowing down). We‘re more than a few quarters from that – I fully expect really biting inflation (supported by overheating in the job market) to be an 2022-3 affair. As regards S&P 500 sectors, would you really expect financials and energy do as greatly as they do if the prospects were darkening?So, I am looking for stocks to do rather well as they are absorbing the rising nominal rates. It‘s also about the pace of such move, which has been extraordinary, and left long-term Treasuries trading historically very extended compared to their 50-day moving averages. Thus, they‘re prone to a quick snapback rally over the next 1-2 weeks, which would help the S&P 500 regain even stronger footing. And even plain temporary stabilization of theirs would do the trick.This is taking me directly to gold. We have good odds of long-term rates not pressuring the yellow metal as much as recently, and inflation expectations are also rising (not as well anchored to 2% as the Fed thinks / says). As I‘ll show you in the charts, the signs of decoupling have been already visible for some time, and now became more apparent. And that‘s far from the only suggestion of an upcoming gold upswing that I‘ll bring you today.Just as I was calling out gold as overheated in Aug 2020 and prone to a real soft patch, some signs of internal strength in the precious metals sector were present this Feb already. And now as we have been testing for quite a few days the first support in my game plan, we‘re getting once again close to a bullish formation that I called precisely to a day, and had been banging the bearish gold drum for the following two days, anticipating the downside that followed. Now, that‘s what I call welcome flexibility, extending to accentuated, numerous portfolio calls.And the permabears keep (losing capital through many bullish years in a row in some cases) calling for hundreds bucks more downside after a respite now, not even entertaining the thought that gold bottom might very well not be quarters ahead. It‘s easier to try falsely project own perma stickers onto others. Beware of wolves in ill-fitting sheep clothing. Look at full, proven track records, compare varying perspectives of yesteryear too, and wave off cheap halo effects.It‘s the above dynamic between nominal rates taking a breather, dollar getting back under pressure, commodities continuing their rise and stocks gradually resuming theirs – see the ebbing and flowing that I‘m laying down in the daily analyses on the revamped homepage, and you‘ll get a knack for my timings of local tops or bottoms just the way I did in the early Sep buying climax or in the corona crash.True mastery is in integrating and arguing opposing views with experience and adaptability daily. People are thankfully able to recognize these characteristics on their own – and they have memory too. Who needs to be told what to read and consider by those embracing expertise only to turn against it when the fruits were no longer theirs? Sour grapes. Narrow thinking is one of the dangers of our era replete with empty and shallow shortcuts. Curiosity, ingenuity and diligence are a gift to power mankind – and what you get from financial analysts – forward in a virtuous circle.If gold prices rise from here, they have bounced off support. Simple as that, especially given the accompanying signs presented. There is time to run with the herd, and against the herd – in both bull and bear trends, constantly reevaluating the rationale for a position, unafraid to turn on a dime when justified.Whatever else bullish or bearish I see technically and fundamentally in rates, inflation and dollar among much else, I‘ll be duly reporting and commenting on as always. It‘s the markets‘ discounting mechanism of the future that counts – just as gold cleared the deflationary corona crash in psring 2020, just as it disregarded the tough Fed tone of 2H 2018, just as it sprang vigorously higher in early 2016 stunning bears in all three cases with sharp losses over many months, or just as stocks stopped declining well before economic news got better in April 2020 or March 2009. Make no mistake, the markets consider transitioning to a higher inflation environment already now (the Fed timidly says that reopening will spike it, well, temporarily they say), when inflation expectations are still relatively low, yet peeking higher based on the Fed‘s own data. Such were my Friday‘s words:(…) Let‘s keep the big picture – gold is in a secular bull market that started in 2018 (if not in late 2015), and what we‘re seeing since the Aug 2020 top, is the soft patch I called. The name of the game now, is where the downside stops – I am not capitulating to (hundreds dollars) lower numbers below $1,650 on a sustainable basis. The new precious metals upleg is a question of time even though the waiting is getting longer than comfortable for many, including myself. Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsStrong rebound after more downside was rejected, creating a tweezers bottom formation, with long lower knots. This is suggestive of most of the downside being already in. The Feb 25 upswing had a bearish flavor to it, while the Mar 1 one looked more constructive – and Friday‘s one is from the latter category. That doesn‘t mean though this correction won‘t be in the 5% range. The 3,900 zone is critical for the bulls to pass so as to clear the current precarious almost no man‘s land.The market breadth indicators are actually quite resilient given how far this correction has reached. New highs new lows are holding up still very well, yet they too indicate that this correction has further to go in time. While the bullish percent index still remains in the bullish territory, it indicates how far the correction has progressed technically, and that we can‘t declare the bullish spirits as having returned just yet.Credit MarketsHigh yield corporate bonds (HYG ETF) ilustrate this fragility for they haven‘t rebounded as strongly as stocks. This correction doesn‘t appear to be as really over just yet, also given the sectoral picture that I am showing you next.S&P 500 Sectoral LookTech reversed, but higher volume would be welcome to lend the move more credibility. This sector is still the weakest link in the whole S&P 500 rebound, and not until I see the $NYFANG carve out a sustainable bottom (this needn‘t happen at the 200-day moving average really), I can declare this correction as getting close to over. The bullish take on the volume is that the value sector has undergone strong accumulation, as can be readily seen in the equal weight S&P 500 index (RSP ETF). The above chart shows that cyclicals are performing strongly – with industrials (XLI ETF) and energy (XLE ETF) leading the charge as the tech and defensives are trying to stabilize, and the same is true about consumer discretionaries (XLY ETF).Gold‘s Big Picture ViewGold‘s weekly chart shows two different stages in the reaction to rising long-term rates. The first half was characterized by the two tracking each other rather closely, yet since late Dec, the nominal rates pressure has been abating in strength within the mutual relationship. While TLT plunged, gold didn‘t move down as strongly. Real rates are negative, nominal rates rose fast, and inflation expectations have been trending higher painfully slowly, not reflecting the jump in commodities or the key inflation precursor (food price inflation) just yet – these are the factors pressuring gold as the Fed‘s brinkmanship on inflation goes on. Once the Fed moves to bring long-term rates under control through intervention – hello yield curve control or at least twist – then real rates would would be pressured to drop, which would be a lifeline for gold – the real questions now are how far gold is willing to drop before that, and when that Fed move would happen. Needless to add as a side note regarding the still very good economic growth (the expansion is still young), staglation is what gold would really love.Copper and Silver Big Picture ViewThe red metal keeps rising without end in sight, reflecting both the economic recovery and monetary intervention. This is a very bullish chart with strong implications for other commodities and silver too. That‘s the essence of my favorite play in the precious metals – long silver short gold spread, clearly spelled out as more promising than waiting for gold upswing to arrive while the yellow metals‘ bullish signs have been appearing through Feb only to disappear, reappear, and so on.As you can see, silver performance approximates commodity performance better than gold one. And as the economic recovery goes on, it‘s indeed safer to be a silver bull than a gold bull – another of my early Feb utterances.Miners to Gold Big Picture ViewThis gold sectoral ratio made an encouraging rebound last week, but isn‘t internally as strong as it might appear, because the juniors (GDXJ ETF) aren‘t yet outperforming the seniors (GDX ETF), which had been the case in early 2021 and late in Feb as well – right till I sounded the alarm bells on Feb 23-24. This is precisely why I was not bullish in tone at all in the past week, as gold hadn‘t been acting as strongly now as it had been right before the Feb 22 upswing that I called. And I am missing this ingredient at the moment still.SummaryStock bulls stepped in and repaired much of Thursday‘s damage, flipping the balance of power as more even at the moment. While the medium-term factors favor the bulls, this correction is slated to go on still for longer, as all eyes are on tech (big names) as the deciding sector.Gold still remains acting weak around the lower border of its support zone, silver is refusing to decline more, and signs overall favoring a rebound, are appearing. It‘s still a mixed bag though, with especially gold being far from out of the woods yet.

The theme of last week was primarily the same as the previous few weeks- rising bond yields and inflation fears caused stocks to crumble.Look, it's not the fact that bond yields are rising that are freaking out investors. Bond yields are still at a historically low level, and the Fed Funds Rate remains 0%. But it's the speed at which they've risen that are terrifying people. So far this year, the 10-year yield has soared 72%Fed Chair Jay Powell's statement that inflation could "temporarily return" did not help matters much last week either. However, despite the fears, the indices really did not perform all that badly the previous week after a Friday (Mar. 5) reversal. The Dow Jones managed to gain 1.8%, the S&P eked out a 0.8% gain, and after briefly touching correction territory and giving up its gains for the year, the Nasdaq managed to decline only -2.1%.So what's on tap for this week? Is the downturn overblown and already over?This is a massive week for market sentiment. The Senate, first and foremost, passed President Biden's $1.9 trillion stimulus plan over the weekend. On the one hand, stocks could pop from this. On the other hand, this makes inflation a foregone conclusion. Remember this, too- when the market gets what it expects, it's usually a sell signal rather than a buy signal. Markets look forward. Not to the past, and not to the present.Important data being released this week also includes inflation data, initial claims, and consumer sentiment.Time will tell where we go from here. While I still do not foresee a crash like we saw last March and feel that the wheels remain in motion for a healthy 2021, inflation is a genuine concern and could be here already.According to Bloomberg , the price of gas and food already appear to be getting a head start on inflation. For January, Consumer Price Index data also found that the cost of food eaten at home rose 3.7 percent from a year ago — more than double the 1.4 percent year-over-year increase in all goods included in the CPI.This could only be the start too. In its 2021 outlook report, the Economic Research Service for the U.S. Department of Agriculture forecast the food cost from grocery stores to rise 1 to 2% this year.Moody's Analytics chief economist Mark Zandi also believes that Wall Street is significantly underestimating inflation's seriousness and warns it could affect every sector in the market — from growth to cyclicals."Inflationary pressures will develop very quickly," he said. "I don't think there's any shelter here."I'm not trying to sound the alarm- but be very aware. These are just the early warning signs.I still feel that a correction of some sort is imminent. The Nasdaq touched it briefly last week and is still about 2% away from one. Other indices could possibly follow. But don't fret. Corrections are healthy and normal market behavior, and we have been long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).Most importantly, this correction could be an excellent buying opportunity.It can be a very tricky time for investors right now. But never, ever, trade with emotion. Buy low, sell high, and be a little bit contrarian. There could be some more short-term pain, yes. But if you sat out last March when others bought, you are probably very disappointed in yourself. Be cautious, but be a little bold too.There's always a bull market somewhere, and valuations, while still somewhat frothy, are at much more buyable levels now.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. A further downturn by the end of the month is very possible, but I don't think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- Buyable but Beware of the RisksFigure 1- Nasdaq Composite Index $COMPThe Nasdaq is no longer in correction territory, nor is it negative for 2021 any longer. But beware- this could change very quickly. More pain could be on the horizon until we get some clarity on this bond market and inflation. However, this Nasdaq downturn is long overdue and starting to be buyable.If you bought at the bottom on Friday before the afternoon reversal and made some quick gains, good on you. It actually didn’t end up being THAT bad of a week for the Nasdaq after Friday’s (Mar. 5) reversal.Be that as it may, Friday’s (Mar. 5) reversal does not mean we’re out of the woods. According to Morgan Stanley’s chief U.S. equity strategist Mike Wilson , “10-year yields finally caught up to other asset markets. This is putting pressure on valuations, especially for the most expensive stocks that had reached nosebleed valuations.”Expensive stocks? Nosebleed valuations? Sounds like tech to me.Wilson also said that once valuation correction and repositioning are finished, then growth stocks can potentially “rejoin the party.”The Nasdaq is now mostly flat for the year, its RSI is closer to oversold than overbought, and we’re at almost a 2-month low.It can’t hurt to start nibbling now. There could be some more short-term pain, but if you waited for that perfect moment to start buying a year ago when it looked like the world was ending, you wouldn’t have gained as much as you could have.I think the key here is to “selectively buy.” I remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.I also think it’s an outstanding buying opportunity for big tech companies with proven businesses and solid balance sheets. Take Apple (AAPL), for example. It’s about 15% off its January 26th highs. That is what I call discount shopping.I like the levels we’re at, and despite the possibility of more losses in the short-run, it’s a good time to start to BUY. But just be mindful of the RSI, and don’t buy risky assets. Find emerging tech sectors or high-quality companies trading at a discount.For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as when small-caps will be buyable, more thoughts on inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Forget gold and silver for a moment. Do you hear the music? Yes, it’s coming from the mining ETFs club. But how long will the party last?And more importantly, why miners, you may ask? Because miners tend to outperform in the early days of a major rally.After closing only $0.10 below my initial downside target of $31 on Mar. 1 , the GDX ETF could be ripe for an upward revision. Able to ignore much of last week’s chaos, the GDX ETF’s outperformance of gold and silver signals that the tide has likely turned.Please see below:Figure 1To that point, I warned on Mar. 1 that help was on the way:The GDX ETF has garnered historical support at roughly $29.52. The level also coincides with the early-March high, the mid-April low and the 61.8% Fibonacci retracement level. As a result, a corrective upswing to ~$33/$34 could be the miners’ next move.Furthermore, after alerting subscribers on Mar. 4 – writing that when gold moves to $1,692, we’ll automatically open long positions in the miners – the GDX ETF ended Friday’s (Mar. 5) session up by 3.2% from my initial entry of ~$30.80 - $31. Thus, from here, the GDX ETF has roughly 3.8% to 7.0% upside (as of Friday’s close) before the $33/$34 levels signals that the momentum has run its course.For now, though, positioning for more upside offers a solid risk-reward proposition . Prior to the initial decline, miners were weak relative to gold . However, after outperforming on Mar. 5, their steady hand was a sign of short-term strength. If you analyze the chart below, you can see that the size and shape of the current price action actually mirrors what we witnessed back in April.Please see below:Figure 2 - VanEck Vectors Gold Miners ETF (GDX), GDX and Slow Stochastic Oscillator Chart Comparison – 2020For context, I wrote on Mar. 5:Miners stopped their decline practically right in my target area, which I based on the 50% Fibonacci retracement and the 2020 highs and lows. Moreover, the proximity of the $31 level corresponds to the 2019 high and the 2016 high. Since so many support levels coincide at the same price (approximately), the latter is likely to be a very strong support. Moreover, the RSI was just close to 30, which corresponded to short-term buying opportunities quite a few times in the past.In addition, a short-term upswing could provide a potential pathway to $35 – as this level also corresponds with the GDX ETF’s late-February high, its monthly declining resistance line and its 50-day moving average. The abundance of resistance levels – combined with the fact that an upswing would further verify the GDX ETF’s breakdown below the neckline of its potential head and shoulders pattern – should keep the upward momentum in check.Over the medium-term, the potential head and shoulders pattern – marked by the shaded green boxes above – also deserves plenty of attention.For context, I wrote previously:Ever since the mid-September breakdown below the 50-day moving average , the GDX ETF was unable to trigger a substantial and lasting move above this MA. The times when the GDX was able to move above it were also the times when the biggest short-term declines started.(…)The most recent move higher only made the similarity of this shoulder portion of the bearish head-and-shoulders pattern to the left shoulder (figure 2 - both marked with green) bigger. This means that when the GDX breaks below the neck level of the pattern in a decisive way, the implications are likely to be extremely bearish for the next several weeks or months.Due to the uncanny similarity between the two green rectangles, I decided to check what happens if this mirror-similarity continues. I used purple, dashed lines for that. There were two important short-term price swings in April 2020 – one shows the size of the correction and one is a near-vertical move higher.Copying these price moves (purple lines) to the current situation, we get a scenario in which GDX (mining stocks) moves to about $31 and then comes back up to about $34. This would be in perfect tune with what I wrote previously. After breaking below the head-and-shoulders pattern, gold miners would then be likely to verify this breakdown by moving back up to the neck level of the pattern. Then, we would likely see another powerful slide – perhaps to at least $24.This is especially the case, since silver and mining stocks tend to decline particularly strongly if the stock market is declining as well. And while the exact timing of the market’s slide is not 100% clear, stocks’ day of reckoning is coming . And it might be very, very close.As I explained previously, based on the similarities to the 1929 and 2008 declines, it could be the case that the precious metals sector declines for about 3 months after the general stock market tops. And it seems that we won’t have to wait long for the latter. In fact, the next big move lower in stocks might already be underway, as the mid-Feb. 2021 top could have been the final medium-term top.In conclusion, the gold miners should continue to glisten as oversold conditions buoy them back to the $33-$35 range. Due to the GDX ETF’s recent strength, combined with gold rallying off of the lows on Mar. 5, the PMs could enjoy a profitable one-week (or so) party. However, with the celebration likely to be short-lived, it’s important to keep things in perspective. While this week’s performance may elicit superficial confidence, medium-term clouds have already formed. As a result, positioning for an extended rally offers more risk than reward.(We normally include the "Letters to the Editor" section in the full version of Gold & Silver Trading Alerts only, but today I decided to include it also in this free version of the full (about 10x bigger than what you just read) analysis, so that you get the idea of how this part of the analysis looks like. It might be quite informative too. Enjoy:)Letters to the EditorQ: Could you update your thoughts regarding physical [gold and silver] for those looking to acquire additional positions - specifically, what do you think premiums and availability are going to look like when/if spot goes a $100 or $200 down from here? By way of example, I bought some U.S. gold buffaloes at $1854 spot at $1954. Those same coins at $1710 spot are still around $1930, if there are any to be found.A: It’s a tough call, because the premium values don’t follow the technical patterns. Still, based on the analogy to situations that seem similar to what we saw recently, it seems that we can indeed say something about the likely physical values close to the likely $1,450 bottom.Figure 43 - Source: didthesystemcollapse.orgThe above chart shows the eBay premium for 1 oz Gold American Eagle coins over the spot gold price.In April 2020, the premium spiked at about 14%. It was likely even higher in March (we don’t have the direct data), but the volatility back then was bigger than it is right now, so it seems that the current premium and the April 2020 premium values are a better proxy for the future bottoming premiums than the March 2020 bottom premium would be. If the volatility increases, one could see the premium at about 15% or so.With gold at about $1,450, the above-mentioned information means Gold American Eagle coins can cost about $1,670.Still, since gold futures prices seem more predictable than the prices of bullion coins, I’d focus on the former even while timing the purchase of the latter.Moreover, please note that I’m planning to focus on buying mining stocks close to the bottom and move to metals only later. The reason is that miners tend to outperform in the early days of a major rally (just like they did in the first quarter of 2016). The fact that the premium is likely to be high when gold bottoms in a volatile manner is yet another reason for the above. When switching from mining stocks to physical holdings several weeks or months later, one might be buying at a smaller premium over the spot, and also after having gained more on miners than on the metals. Of course, the above is just my opinion, and you can purchase whatever you want – after all, it’s your capital and your investment decisions.Q: Please note that I am glad to see gold moving downwards but I am a little confused – the trading report I just received recommends selling at 1690ish but the mailing previously said 1450ish - please see attached.Could you please investigate and advise.A: If anything in the Gold & Silver Trading Alerts seems confusing, please refer to the “Summary”, the trading/investment positions, and the “Overview of the Upcoming Part of the Decline” sections for clarification. In this case, we exited the remaining short positions when gold hit $1,693 and almost immediately entered long ones (when gold hit $1,692). We now have long positions in the mining stocks with the plan to exit them in a week or so, and re-enter short positions then, because the next big move is likely to be to the downside (perhaps as low as $1,450 or so). Also, the above is just my opinion, not a recommendation or investment advice.Q: Hi P.R., thanks for the advice on this trend, it’s been an amazing trade.As I’m trading on XAUUSD, are you also able to advise the targets for a gold long entry,or should I wait for the final bottom before opening any longs?A: I’m very happy that you’re making profits thanks to my analyses. While I think that the very short-term (for the next 5 trading days or so) outlook for gold, silver and mining stocks is bullish, I think the targets are more predictable for mining stocks than they are for gold and – especially – silver. Still, this time, the short-term upside target for gold is also relatively clear – at about $1,770. That’s why I put the $1,758 in the “For-your-information target” for gold in the “Summary” section below.Q: Are we looking for the short-term upside move to be 1-5 weeks before the final decline into the 1350-1500 zone? I'm a little unsure of the timing you're laying out.A: I’m looking for the short-term upswing to take place between 1 and 3 weeks – that’s the part of the “Overview of the Upcoming Part of the Decline” section about it:It seems to me that the initial bottom has either just formed or is about to form with gold falling to roughly $1,670 - $1,680, likely this week.I expect the rebound to take place during the next 1-3 weeks.After the rebound (perhaps to $33 - $34 in the GDX), I plan to get back in with the short position in the mining stocks.In my opinion it’s most likely that this counter-trend rally will take about 1 – 1.5 weeks. Then, I think that the decline to about $1,450 in gold will start.Q: Thank you for sending out the Alert # 2 with the new changes in the Gold and Silver trades today. This is necessary, so please send out the alert once you enter back to the short positions, please.A: I’m happy that you enjoyed this intraday Alert. I will indeed send you – my subscribers – an intraday confirmation that the long positions were closed and when we enter new short positions. Still, please note that we already have binding profit-take exit prices in place, which means that when prices move to the target levels (e.g., GDX to $33.92), the long positions should be automatically closed, and profits should be taken off the table – even without an additional confirmation from me (it takes time for me to write and send the message and then some time usually passes before one is able to act on my message).Q: You have informed us to make the move when the Gold price “REACHES” $1693.00. My question is; Does the word “Reach” mean when the price touches that point, if only for a moment, or does “Reach” mean when it closes the day at or below $1693.00?Thank you for your response to this question.A: “Reaching” a price means the same thing as “touching” the price or “moving to” the price. This means moving to this price level on an intraday basis – even for just one tick . If I mean closing prices, I will specifically describe them as such.For instance, I currently have binding exit positions for the current long position in the mining stocks – and these are exactly the price levels that I have put in my brokerage account as a limit sell order.Q: Please comment on the Hindenburg Omen for stocks:Figure 44 - Source: RefinitivA: Thanks. The Hindenburg omen is not one of the most reliable indicators - even on the above chart, it’s clear that most of the signals were not followed by declines. Please note how many fake initial signals there were before stocks finally declined in 2019 or 2020. There are many other reasons to think that stocks are going to move much lower, though. In the very short-term they could still move higher, but this move could be fake and could turn out to be the right shoulder of the head-and-shoulders top formation.Q: 1) for shorter-term trades such as the potential 10% pop in the GDX, is NUGT better?2) the plan after we re-enter a short trade when the GDX gets to $33/$34 might mean a longer haul before we hit rock bottom . You have mentioned time-scales up to 20 weeks (ish). Due to a longer holding period , would the CFD route be a cheaper route when compared to NUGT? I’m asking in general terms because each provider imposes different fees and I don’t expect you to comment on the fees charged by IG, which is the service I use.I also recognize that NUGT only offers 2 X leverage, whereas CFD’s offer up to five times leverage.Finally, the manner in which you detail the rich tapestry of the economic forces that impact PMs is revealing and educational. I find this all fascinating.I have my own views which can be summed up like this: How many inflationary false-dawns and panics has the bond market had? Ever since 2008, when the FED launched QE, there have been numerous bouts and hissy fits of inflationary expectations that have subsequently sunk like a dodgy soufflé. I think this time is no different and it’s entirely possible the 30-year bond could drop to ZERO. I am in the deflationary camp.How might the 10 year at zero or possibly sub-zero and longer, out on the duration curve to (TLT ETF) dropping to 0.5%, affect the price of gold?Your thoughts as ever, are much appreciatedA: 1) That depends on whether one seeks leverage or not, and how much thereof. Please note that some short-term trades could sometimes become medium-term trades if the market decides to consolidate or move in the other direction before continuing the predicted trend. In this case, non-leveraged instruments are at an advantage over the leveraged ones, because they don’t suffer from the back-and-forth trading as much as the leveraged ones do.If one’s desired exposure to the GDX ETF wouldn’t exceed the cash that one dedicated to trading, then in order to have the same exposure one would simply have half of the capital employed in NUGT (which is 2x leveraged). This way, the exposure would be identical, but the NUGT would imply additional risk of losing more capital if the trade takes much longer than planned and/or if the price moves adversely first.Please note that there is also an additional way to gain leverage (it’s not available for everyone, though) and that is through the use of margin on one’s brokerage account. I’d prefer to use margin for the GDX before aiming to gain leverage through NUGT.In other words, I’d first use more cash for GDX before I’d go into NUGT. If I wanted to have even bigger exposure than the one achieved by employing more capital to GDX, I would then consider using margin, and then I would consider using NUGT if I still wanted to get more leverage.There might be some traders who would seek to combine both for even bigger leverage (buying NUGT on margin), but this is definitely not something that I’d recommend to most people. In fact, it seems that in many cases, sticking to the GDX would be a good way to go.2) I think I already replied to the first part of your question (NUGT vs. CFD) above. Also, for other people reading this reply – please note that CFDs (contracts for difference) are not available in many areas, including the USA and Canada.I’m glad to read that you enjoy reading my explanations of the current situation in the markets (precisely, my opinions on it).Real interest rates are one of the most important drivers for gold (along with the USD Index), so a drop in the 10-year rates to zero or sub-zero levels would likely be very beneficial for the gold prices.Figure 45Also, based on the pace at which the rates have rallied recently, they might be topping here, but… There was no decline in the previous 40 years that was as big as what we saw between 2018 and 2020. Consequently, the corrective upswing might be bigger as well. Also, the above chart is not necessarily the scale that is big enough to make very long-term conclusions.Figure 46Over the past centuries, whenever the rates fell very low, they then rallied back up with vengeance. After WW2, it theoretically would have been a “good idea” to keep stimulating the economy with low rates – and yet, they soared. Right now, the monetary authorities strive to be very dovish and keep pumping liquidity into the system, and yet the rates are rallying anyway.So, while the analogy to the previous years – or the past few decades – suggests that the rally in the rates might be over or close to being over, the very long-term chart suggests otherwise.To make the situation even more complicated, if the stock market has already topped in February, and we have already entered the Kondratiev winter cycle, it means that we can theoretically expect the rates to fall, then rise in a credit crunch, and then fall much lower.All in all, the outlook for the interest rates is anything but simple and clear. Perhaps what we see right now already IS the credit crunch and the 10-year rates are on their way to above 2% - after all, they used to return above their 200-day moving average after the previous medium-term declines. It seems to me that the move above 2% in the 10-year rates could correspond with gold’s decline below $1,500.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

EURUSD tumbles in falling channelThe US dollar continues to push forward as prospects of a strong US recovery take root.After conceding the intermediate support of 1.1950, the euro came under renewed pressure and is now sliding towards the daily support level of 1.1750.A bullish RSI divergence and the price testing the lower band of the bearish channel suggest that a rebound is overdue. A better-than-expected GDP data from the eurozone might just give the single currency the relief it needs. Though the upper band (1.1970) will be a tough nut to crack.AUDUSD remains under bearish trendlineThe Aussie might not be out of the woods yet as market fever over the greenback is still in full swing. The pair is heading towards the daily support level of 0.7580, a critical level where a failure to bounce could signal an upcoming reversal.A fairly neutral RSI says there is still room for a retracement in the next few hours.The price action is then likely to go sideways between the support and the bearish trendline (0.7720) before a breakout would lead to a new direction.SPX 500 rallies back from daily supportThe S&P 500 climbed back after the US Senate passed the $1.9 trillion COVID-19 relief package. The demand zone around 3700 from the daily timeframe has seen strong bids.On the hourly chart, a bullish MA cross and a rally above 3845 have prompted the short side to cover. 3900 is the immediate resistance and its breach could resume the upward movement.An overbought RSI might signal a potential pullback but as long as the index stays above 3730, the bias remains bullish.

This is a continuation of our extended technical review of what my research team and I believe will be required for the US/Global markets to enter a stronger post-COVID-19 recovery phase. If you missed Part I of this research series then you can find it here: www.thetechnicaltraders.com/stimulus-and-consumers-are-the-keys-to-further-us-global-economic-recovery-part-i/. In this Part II, we will look at how potential currency shifts will prompt new trending in various economic sectors.   The past 20+ years have really changed how the markets operate from a standpoint of capital deployment and capital function.  We certainly live in interesting times from a trader and investor perspective. There is more capital floating around the globe right now than ever before... and that changes certain things.The Components Of A Frenzied Global MarketThe first and most notable change is to create volatility at levels we have really never seen before.  The average daily price range on the QQQ or SPY charts is more than 3x historical price range levels.  This simple fact shows that a 1% price range, which used to be considered a moderately large price range for the price to move, is now considered a below normal range.  This new level of volatility has applied to many of the largest SPY and NASDAQ-related stock symbols over the past few years as capital was deployed into various sectors with increasing speed and volition.We profit from volatility by using non-directional options trading strategies.Watch our webinar on How To Become An Options Strategy Master now!The US and global central banks have continued to deploy easy money policies since the 2008-09 Housing/Credit crisis which has perpetuated a Roaring-20s type of mentality throughout the world.  Even though we could point out certain nations that are underperforming economically, generally the world has seen an unprecedented rise in credit, debt, and associated spending capabilities over the past 10+ years.  This level of unusual economic expansion comes with certain consequences, similar to the expansion that led up to the 2008-09 Housing/Credit crisis.It also has to be noted that COVID-19 has really altered the way consumers are engaging in the economy right now.  Online, stay-at-home, avoid outside risks type of activities have really become the new normal. Many sociologists continue to suggest consumers may be slower to move back into old economic habits (pre-COVID-19 spending habits).  This change in how people perceive risks and adopt new economic processes will likely lead to a rise in digital productivity, the adoption of technology solutions, and a change of spending habits, which could prompt a much bigger transition for certain market sectors that have been overlooked recently.Watch Chris and Neil Present at The Mad Hedge Traders and Investors Summit - Click to Register for FREE!One thing that has certainly benefited from COVID-19 is the number of new investors/traders plying their skills (and hard-earned cash) in the markets.  We've never seen anything like this explosive growth in retail market participation over the past 20+ years.  The closest we've come to this level of retail trader participation in the equities and financial markets was in 1998~99 during the height of the DOT COM bubble.  This incredible consumer participation in the global equities trends/trading has helped propel many US major indexes/sectors to incredible heights – and it may not end any time soon.The following Monthly ratio chart, comparing the growth in the QQQ, SPY, and GOLD since January 1, 2009 (the anchor price) highlights how the frenzy of investing really started to accelerate after 2012 and began to move into a parabolic trend in 2016.  If you follow the MAGENTA QQQ ratio after the vertical dateline on this chart, you will see how early 2017 started a dramatic acceleration in volatility and trending as the QQQ accelerated higher by more than +186%.  Meanwhile, the SPY, which was somewhat overlooked throughout this rally phase, moved higher by only +85%.Where is the Consumer?  Has The Consumer Really Retreated Because Of COVID-19?One prime example of this frenzy is this recent Yahoo! Finance story about burned Banksy Art which sold for over $390,000 as a Non-Fungible Token. The idea that anyone would buy a burned piece of art for this price shows that money has turned into a game for some people.  The gamification of wealth has likely transitioned into global social thinking in ways that we have not even considered yet.Even though we've highlighted how the global equity/financial markets have rallied considerably over the past 5+ years, we still need to see the consumer reenter the economy in a more traditional sense. This M1 Velocity of Money chart shows that after the 2009 peak, the velocity of money, the rate at which money is exchanged within an economy, has collapsed to levels we have not seen in 60+ years, and quite possibly below levels relative to the Great Depression (1930s).So, what's happening in the world right now to present these types of charts/data?  How can the world be flush with capital/cash and the data show that the consumer is still actively engaged in purchasing various items, which include very active engagement in the global equity markets and speculative trading positions, while the M1 Velocity of Money data shows an incredible collapse after COVID-19 hit?The answer is simple.  The US Federal Reserve has pushed more cash into the global economy over the past 10+ years than at any time in history (more than $16 Trillion since 2009).  Prior to that date the total amount of capital/debt the US Fed only pushed a total of $10.6 Trillion into the economy over a 40-year time span.  There is nearly 3x the total number of US dollars floating around the globe right now than at any time since prior to the 1950s.Eventually, we are certain that, this extended cash will translate into GDP growth – which will strengthen the Velocity of Money ratio over time.  What it will take is for the economy and the consumer to transition into a new form of expansion related to the post-COVID-19/post Technology euphoria that is currently taking place.Over the next 20 to 30+ years, we are going to see some very big trends in various sectors and commodities.  The global central banks have pushed so much capital out into the world that, once it finds its true economic purpose, we believe the function of this capital will be deployed into various economic components in ways we have not even considered yet.  New industry, new forms of consumer products, and consumer participation will likely evolve where capital can be put to use to improve the GDP levels.  Cryptos may be the start, a stepping stone, toward a much more dynamic solution for how capital is used and deployed within the global marketplace.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.In Part III of this research article, my team and I will continue to explore the future possibilities and make some suggestions as to how you can prepare for these big trends right now.  Remember, this is a longer-term outlook of opportunities for traders/investors.  The real gains related to this research will come 5 to 10+ years out into the future if you are able to identify how and where capital is being deployed for gains. Have a great day!

BTC-USD, Monthly Chart, Conservatively Bullish:BTC-USDT, monthly chart as of March 8th, 2021.One of the best ways to keep one’s emotions in check is reducing position size. It allows for accepting risk and, as such seeing the market for what it is. Looking at the monthly chart above, this size reduction on new entries is also in accordance with the risk at these more extended levels. We see prices progressing higher, but entry risk once the price has moved up this far aligns to our risk control parameters from a psychological perspective and a statistical one. BTC-USDT, Weekly Chart, Steep and steady:BTC-USDT, weekly chart as of March 8th, 2021.This weekly chart shows price behavior even more clearly. For nearly three years, Bitcoin prices meandered around the mean (yellow line). Last year in October, Bitcoin prices broke out of this range. Already four weeks later, in November 2020, prices extended above typical standard deviation levels. Nothing atypical for Bitcoin, which loves sharp advances. And again, we do not see prices decline from here rapidly. However, what is affected are stop levels and entry probabilities, which makes the astute trader behave more risk-averse both in exposure size and trading frequency.BTC-USDT, Daily Chart, Bitcoin, how not to lose:BTC-USDT, daily chart as of March 8th, 2021.The green arrows on the daily chart show our long entries last week. We posted these in real-time in our free Telegram channel. Each of these entries had a position size reduced by thirty-five percent. We were also able to finance all three trades (=take partial profits shortly after entry based on our Quad exit strategy to eliminate risk). For now, we are holding remainder small position sizes for possible price advances without a skewed view due to the more than usual conservative approach (= minimal position size).Bitcoin, how not to lose:It takes quite some experience to judge oneself on emotions of over- self-confidence. If you had an excellent run on investments, take some money off the table. Wire it from your brokerage. Consider self-gifting, vacation, or otherwise reward yourself. Make sure your daily self-assessment routine contains this checkpoint of possible over-confidence. Reduce size for upcoming trades and pat yourself on the shoulder for a job well done.You could give more considerable amounts of profits up due to negligence and being complacent, not abiding as diligent to your trading rules, as usual. This can be especially painful in these heightened emotional states. Consequently, this causes even more dramatic setbacks trying to brush early warning signals of over trading and under-selecting signal quality off and trying to prove yourself. Like the market, you need to take a breath, celebrate, and return light footed on half size for the next run-up.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|March 9th, 2021|Tags: Bitcoin, Bitcoin correction, Bitcoin mining, crypto analysis, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

Gold remains inert to President Biden’s large and hazardous economic plan, and ended up dropping below $1,700.President Joe Biden’s $1.9 trillion COVID-19 stimulus is coming! On Saturday, the U.S. Senate passed the American Rescue Plan on a party-line 50-49 vote. This means that after the House’s vote on Tuesday, Biden could sign the bill into law soon, and those $1,400 payments to most Americans could start to go out as soon as this month.The final bill includes not only $400 billion in checks of $1,400 to most Americans, but also $300 a week in extended unemployment benefits, and $350 billion in aid to state and local governments.The American Rescue Plan would be one of the largest stimulus packages in U.S. history. It would also be one of the most frivolous and superfluous economic programs. There is simply no need for such a large plan. Please take a look at the chart below.As one can see, U.S. personal income has increased during the pandemic, not decreased. Once again, people are now receiving higher income than one year ago. So, Biden’s stimulus with another round of $1,400 checks is not economically or socially justified.Indeed, the U.S. economy is already recovering. On Friday (Mar. 5), we got surprisingly good data about the American labor market , that showed the economy added 379,000 jobs in February, much above expectations. Meanwhile, the unemployment rate has slightly decreased further, as one can see in the chart below. Employment is still down by 9.5 million, or 6.2 percent, from the pre-pandemic level seen one year ago, but additional unemployment benefits or plain checks will not help bring people back into employment – in fact, the effect may turn out to be the reverse.Hence, Biden’s fiscal stimulus will bring little benefit to the economy, while significantly expanding the federal debt and risking overheating the economy. Indeed, the plan is estimated to increase the already high public debt (see the chart below) by an additional ten percentage points as a share of GDP .Implications for GoldWhat does this all mean for gold prices? From the fundamental point of view, Biden’s plan should be positive for the yellow metal. This is because it can increase inflation in the long-run, if people finally decide to spend all the money they got from Uncle Sam. It will not happen in the immediate future, as households will initially save the received payments, and some of them will repay their debts, but they are likely to spend more this year, to compensate for curbed consumption in 2020.However, whether Biden’s plan turns out inflationary or not, it will expand the already mammoth public debt. It should weaken the position of the greenback and increase the odds for a debt crisis or paying out this debt through inflation or financial repression. The higher the debt, the more difficult it will be for the Fed to normalize interest rates (welcome to the debt trap , my friends). All these factors should support gold prices in the long run.However, gold remains deaf to Biden’s disharmonious symphony. Indeed, as the chart below shows, the yellow metal has declined below the important level of $1,700 last week. It seems that the fiscal stimulus (together with the rollout of vaccinations and the economic recovery) has so far strengthened the risk appetite among investors who don’t focus on long-term consequences of the fiscal stimulus.This may change one day, but the sentiment in the gold market is clearly negative right now, and the fundamentals are more positive. The fundamentals may come to the fore in the end. However, gold may struggle further, especially if real interest rates go up again.If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care

The 2019-2021 gold chart is disturbingly similar to that of 2010-2012, but it does not have to be the harbinger of a bear market.Many ancient cultures saw history as cyclical. According to this view, society passes through repeated cycles. Can this apply to gold as well? I’m not referring here to the simple fact that we have both bull and bear markets in the precious metals – I refer here to the observation that gold’s price pattern seen in 2019-2021 mirrors that of 2010-2012 . Please take a look at the chart below.As you can see, in both periods, gold was steadily rising to a peak in the third quarter of the second year. A decade ago, the yellow metal gained 29 percent in 2010 and 74 percent as it hit the top. Then, it declined 19 percent by the end of 2011. Fast forward to more recent times. Gold gained 18.4 percent in 2019 and 62 percent at the peak. Afterwards, it declined 9 percent by the end of 2020.So, although the magnitude has now been weaker than in the aftermath of the Great Recession , the pattern is quite similar. The next chart – which presents the normalized gold prices in both periods to indices (when the starting point equals 100) – nicely illustrates how gold in 2019-2021 closely resembles gold from 2010-2012.This similarity may be disturbing. Should the pattern hold, then gold could go down significantly and stay in a sideways trend for years. As a reminder, this is what happened a decade ago. Gold bulls fought until the end of 2012, when they gave up and the yellow metal entered a full bear market, plunging 45 percent from the top to the bottom in December 2015. Then, it stayed generally flat till the end of 2018. If this cycle replays, we could see the price of gold go below $1,200 by the end of 2024.To be clear, there are some arguments to support the bearish case . Just as in the 2010s, the world is recovering now from the global economic crisis . The recession is over and the prospects are only better. Perhaps they’re not rosy, but they’re certainly better than many previously expected, which is what matters for the financial markets. As the worst is behind us, the risk appetite is returning, which could put gold and other safe-haven assets into oblivion. Actually, some could even argue that gold may now plunge even earlier, as a decade ago it was supported by the European sovereign debt crisis , which peaked in 2011-2012.However, there are also important reasons why gold could break the pattern and diverge from the 2010-2012 trend. First, we now have a much more dovish Fed . The U.S. central bank slashed the federal funds rate much quicker and expanded its balance sheet more decisively. Additionally, to avoid a taper tantrum caused by its announcement about tapering asset purchases, this time the Fed will normalize its monetary policy in a very, very gradual way, if at all. It means that interest rates will stay lower for longer. Lastly, the U.S. central bank changed its monetary policy framework, i.e., it prioritized the labor market over price stability and became more tolerant to higher inflation .Second, we also have a much easier fiscal policy . Even before the global pandemic , Trump significantly expanded budget deficits , but the Great Lockdown made them even larger. As pundits believe that the fiscal response in the aftermath of the global financial crisis of 2007-2009 was too small, they now want to go big – indeed, Biden’s $1.9 trillion economic plan is waiting to be passed by Congress.Third, this recovery might be more inflationary than a decade ago . This is because not only did the monetary base increase, but the broad money supply did as well. Last time, the Fed injected a lot of liquidity to the banking sector to bailout the banks. Now, the money has flowed much more through Main Street and the household sector, which could turn out to be more inflationary when all this money will be spent on goods and services. Also, last time we observed some deleveraging in the private sector, while now the supply of loans is continuously increasing at a positive rate. We are also already observing reflation in the form of a commodity boom, so gold may follow suit.To sum up, the patterns seen in the gold market in 2010-2012 and 2019-2021 are remarkably similar. So, the recent gold’s weakness may be really disturbing. However, this resemblance does not have to be a harbinger of further problems coming for gold bulls . After all, as Mark Twain is reputed to have said, “history doesn’t repeat itself, but it often rhymes”. Indeed, the macroeconomic and political environment is now clearly different than a decade ago – it’s more fundamentally positive for the price of gold.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.

Stocks spiked higher, but not before going sideways to down prior on the day. And the close to the session hasn‘t been convincing either – does it count as a reversal? In my view, we haven‘t seen one yesterday really, regardless of this correction not being over just yet. There are still some cracks I tweeted yesterday about in need closing first, such as the worrying corporate bonds performance, manifest in the HYG:SHY ratio, or the tech searching for the bottom (it‘s $NYFANG precisely). Quoting from yesterday‘s extensive analysis spanning beyond stocks, metals and the Fed:(…) Stocks have had a great run over the past 4 months, getting a bit ahead of themselves in some aspects such as valuations. Then, grappling with the rising long-term rates did strike.So did inflation fears, especially when looking at commodities. Inflation expectations are rising, but not galloping yet. What to make of the rising rates then? They‘re up for all the good reasons – the economy is growing strongly after the Q4 corona restrictions (I actually expect not the conservative 5% Q1 GDP growth, but over 8% at least) while inflation expectations are lagging behind. In other words, the reflation (of economic growth) is working and hasn‘t turned into inflation (rising or roughly stable inflation expectations while the economy‘s growth is slowing down). We‘re more than a few quarters from that – I fully expect really biting inflation (supported by overheating in the job market) to be an 2022-3 affair. As regards S&P 500 sectors, would you really expect financials and energy do as greatly as they do if the prospects were darkening?Stocks are well positioned to keep absorbing the rising nominal rates. What has been the issue, was the extraordinarily steep pace of such move, leaving long-term Treasuries trading historically very extended compared to their 50-day moving averages. While they can snap back over the next 1-2 weeks, the 10y Treasury bond yield again breaking 1.50% is a testament to the Fed not willing to do anything at the moment. Little does the central bank care about commodities moves, when it didn‘t consider any market moves thus far as unruly.Gold market offered proof of being finally ready for a rebound, and it‘s visible in the closing prices of the yellow metal and its miners. Being more than a one day occurence, supported by yesterday presented big picture signals, the market confirmed my yesterday‘s suggestion of an upcoming gold. It appears we‘ll get more than a few days to assess the legs this rally is made of, facilitating nimble charting of the waters ahead my usual way:(…) Just as I was calling out gold as overheated in Aug 2020 and prone to a real soft patch, some signs of internal strength in the precious metals sector were present this Feb already. And now as we have been testing for quite a few days the first support in my game plan, we‘re getting once again close to a bullish formation that I called precisely to a day, and had been banging the bearish gold drum for the following two days, anticipating the downside that followed. Flexibility and broad horizons result in accentuated, numerous other portfolio calls – such as long Bitcoin at $32,275 or long oil at $58 practically since the great return with my very own site. We‘re now on the doorstep of visible, positive price outperformance in the gold miners (GDX ETF) as gold prices didn‘t break the higher bullish trend by declining through both the Mar 4 presented supports of my game plan. As I wrote yesterday, if prices move higher from here, they have simply bounced off support, especially given the accompanying signs presented, not the least of which is the dollar getting back under pressure. Make no mistake, the greenback isn‘t in a bull market – it‘s merely consolidation before plunging to new 2021 lows. I have not been presenting any USDX declining resistance lines and breakout arguments, because prices can be both above such a line, and lower than at the moment of „breakout“ at the same time – ultimately, rising and declining supports and resistances are a play on the speed of the move, where pure inertia / deceleration / reprieve doesn‘t break the prior, higher trend. And as I called in summer 2020 the dollar to roll over and keep plunging, that‘s still what‘s unfolding.How does it tie in to commodities and stocks? We‘re not at extreme moves in either, and I see copper, iron, oil, agrifoods as benefiting from the reflationary efforts greatly. Similarly and in spite of the $NYFANG travails, it would be ill-advised to search for stock market tops now (have you seen how well the Dow Industrials is doing?) – no, we‘re not approaching a top that I would need to call the way I did in the early Sep buying climax. This is still the time to be running with the herd, and not against it – you can ignore the noise to the contrary for both the S&P 500 and commodities have a good year ahead. As for precious metals, we might have seen the bottom already – and in any case by the current shape of things, I don‘t see it occuring quarters ahead and hundreds buck lower.Bringing up the constant reevaluation of position‘s rationale, market reactions and narratives:(…) It‘s the markets‘ discounting mechanism of the future that counts – just as gold cleared the deflationary corona crash in psring 2020, just as it disregarded the tough Fed tone of 2H 2018, just as it sprang vigorously higher in early 2016 stunning bears in all three cases with sharp losses over many months, or just as stocks stopped declining well before economic news got better in April 2020 or March 2009. Make no mistake, the markets consider transitioning to a higher inflation environment already now (the Fed timidly says that reopening will spike it, well, temporarily they say), when inflation expectations are still relatively low, yet peeking higher based on the Fed‘s own data. Gold is in a secular bull market that started in 2018 (if not in late 2015), and what we‘re seeing since the Aug 2020 top, is the soft patch I called. The name of the game now, is where the downside stops – and it‘s one of the scenarios that it has just happened, especially if gold convincingly closed back above $1,720 without undue delay.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookWe have seen two intraday reversals to the downside yesterday, yet I think the effects would prove a temporary obstacle to the bulls only. Such candlestick patterns usually slow down the advance, but don‘t end it – and that‘s consistent with my yesterday‘s words of most of the downside being already in. Once the 3,900 zone is confidently passed, the bears would have missed the chance to reach below Thursday‘s lows.Credit MarketsHigh yield corporate bonds (HYG ETF) still ilustrate ongoing fragility for they have plunged below their Feb lows. This correction doesn‘t appear to be as totally over just yet, also given the sectoral picture that I am showing you next.Put/Call Ratio and VolatilityOption players clearly aren‘t concerned by yesterday‘s S&P 500 price action, and the VIX is painting a similarly neutral picture – just as the sentiment overall. Very good, we‘re primed to go higher next, from a starting position far away from the extreme greed levels.Technology and ValueThe sectoral divergence continues, and tech is still the weakest link in the whole S&P 500 rebound. The big $NYFANG names, the Teslas of this world, are the biggest drag, and not until these carve out a sustainable bottom (this needn‘t happen at the 200-day moving average really), I can declare this correction as getting close to over. It‘s the cyclicals, it‘s value stocks that is pulling the 500-strong index ahead, with financials (XLF ETF), industrials (XLI ETF) and energy (XLE ETF) leading the charge.Treasuries and DollarNominal, long-term Treasury rates have at least slowed their quickening Feb pace, even in the face of no action plan on the table by the Fed – the dollar moved higher on the realization next, and it‘s my view that once new Fed intervention is raised, it would have tremendous implications for the dollar, and last but not least – the precious metals.Gold and SilverFinally, this is the much awaited sign, enabling me to sound some bullish tone in gold again – the miners are outperforming the yellow metal with more than a daily credibility, which I view as key given the lackluster gold price action before yesterday (absence of intraday rebounds coupled with more downside attempts). It would turn stronger once the gold juniors start outperforming the seniors, which is not the case yet.Coupled with the 4-chart big picture view from yesterday, it‘s my view that the gold market is laying the groundwork for its turning:(…) Real rates are negative, nominal rates rose fast, and inflation expectations have been trending higher painfully slowly, not reflecting the jump in commodities or the key inflation precursor (food price inflation) just yet – these are the factors pressuring gold as the Fed‘s brinkmanship on inflation goes on. Once the Fed moves to bring long-term rates under control through intervention – hello yield curve control or at least twist – then real rates would would be pressured to drop, which would be a lifeline for gold – the real questions now are how far gold is willing to drop before that, and when that Fed move would happen. Needless to add as a side note regarding the still very good economic growth (the expansion is still young), stagflation is what gold would really love.Silver is carving out a bottom while both copper and platinum are turning higher already – these are That‘s the essence of one of my many profitable plays presented thus far – long silver short gold spread – clearly spelled out as more promising than waiting for gold upswing to arrive while the yellow metals‘ bullish signs have been appearing through Feb only to disappear, reappear, and so on.SummaryStocks haven‘t seen a real reversal yesterday, but more backing and filling till the tech finds bottom, appears due. The medium-term factors favor the bulls, but this correction isn‘t over yet, definitely not in time.Now, gold can show some strength – and silver naturally even more. The signs overall favoring a rebound, are appearing with increasing clarity for the short term, and the nearest weeks will show whether we have made a sustainable bottom already, or whether the $1,670 zone will get tested thoroughly. The bulls have the upper hand now.

DAX 30 surges to new highThe German index rallied to a new high as investors priced in the benefits of economic normalization.The ascent above 14180 was the result of short-covering and momentum trading when that critical resistance broke away. The latest correction might have ended right there with the bullish bias intact on the daily timeframe.Short-term traders’ profit-taking might cause a retracement towards the demand zone between 14180 and 14310. However, the buying interest is likely to stay strong as trend followers jump in.USDCHF drops on profit-takingRetreating US yields have led to profit-taking on the US dollar.An RSI divergence in the overbought area was a sign of a loss in the bullish momentum. Then a 100-pip drop below the 20 and 30-hour moving averages and a bearish MA cross confirmed the overextension.The pair is now testing its first key support at 0.9250. An oversold RSI indication could attract some bargain hunters. Though a failure to hold on to that level may trigger a deeper correction towards 0.9180.USDCAD tests major resistanceAs the US dollar is grinding along a falling trendline, there is a chance of a breakout if the Bank of Canada convinces markets of its resolve to keep interest rates at a record low.Price action has been building up support above 1.2570 in a rectangle-shaped consolidation. The narrowing range between the support and the resistance is typical of the market’s indecision ahead of a catalyst.A close above 1.2700 on the daily trendline could prompt sellers to rush to cover their positions, fuelling a breakout rally.

Days like Tuesday (Mar. 9) are why you buy the dips. It was nothing short of a reverse rotation from what we’ve seen as of late. Bond yields moved lower; tech stocks popped.That’s why I called BUY on the Nasdaq.Inflation fears and the acceleration of bond yields are still a concern. But it looks as if things are stabilizing, at least for one day. The lesson here, though, is to be bold, a little contrarian, and block out the noise.Unless you’ve been living under a rock, you know that recent sessions have been characterized by accelerating bond yields driving a rotation out of high growth tech stocks into value and cyclical stocks that would benefit the most from an economic recovery. The Nasdaq touched correction territory twice in the last week and gave up its gains for the year.But imagine if you bought the dip as I recommended.The Nasdaq on Tuesday (Mar. 9) popped 3.7% for its best day since November. Cathie Wood’s Ark Innovation ETF (ARKK) surged more than 10% for its best day ever after tanking by over 30%. Semiconductors also rallied 6%.Other tech/growth names had themselves a day too: Tesla (TSLA) +20%, Nvidia (NVDA) +8%, Adobe (ADBE) +4.3%, Amazon +3.8%, Apple (AAPL) +4.1%, and Facebook (FB) +4.1%.In keeping with the theme of buying the dip, do you also know what happened a year ago yesterday to the date? The Dow tanked 7.8%!There’s no way to time the market correctly. If you bought the Dow mirroring SPDR DJIA ETF (DIA) last March 9, you’d have still seen two weeks of pain until the bottom. However, you’d have also seen a gain of almost 36% if you bought that dip and held on until now.Look, I get there are concerns and fears right now. The speed at which bond yields have risen is concerning, and the fact that another $1.9 trillion is about to be pumped into a reopening economy makes inflation a foregone conclusion. But let’s have a little perspective here.Bond yields are still at a historically low level, and the Fed Funds Rate remains 0%.So is the downturn overblown and already finished?Time will tell. I think that we could still see some volatile movements over the next few weeks as bond yields stabilize and the market figures itself out. While I maintain that I do not foresee a crash like what we saw last March and feel that the wheels remain in motion for an excellent 2021, Mr. Market has to figure itself out.A correction of some sort is still very possible. I mean, the Nasdaq’s already hit correction territory twice in the last week and is still about 3-4% away from returning to one. But don’t fret. Corrections are healthy and normal market behavior. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).Most importantly, a correction right now would be an excellent buying opportunity. Just look at the Nasdaq Tuesday (Mar. 9).It can be a very tricky time for investors right now. But never, ever, trade with emotion. Buy low, sell high, and be a little bit contrarian. There could be some more short-term pain, yes. But if you sat out last March when others bought, you are probably very disappointed in yourself. Be cautious, but be a little bold too.You can never time the market.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. The market has to figure itself out. A further downturn is possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen any time soon.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- That’s Why I Called BUYFigure 1- Nasdaq Composite Index $COMPFor the second time in a week, the Nasdaq hit correction territory and rocketed out of it. It saw its best day since November and proved once again that with the Nasdaq, you always follow the RSI. There could be more uncertainty over the next few weeks as both the bond market and equity market figure themselves out. However, the Nasdaq declines were very buyable, as I predicted.If you bought the dip before Tuesday’s (Mar. 9) session, good on you. Be a little bit bold and fearless right now. Take Ark Funds guru Cathie Wood, for example. Many old school investors scoffed at her comments on Monday (Mar. 8) after she practically doubled down on her bullishness for her funds and the market as a whole. After crushing 2020, her Ark Innovation Fund (ARKK) tanked over 30%. Many called her the face of a bubble. Many laughed at her.Tuesday, March 9, ARKK saw its best day in history.I’m not saying that we’re out of the woods with tech. All I’m saying is don’t try to time the market, don’t get scared and have perspective.The Nasdaq is once again roughly flat for the year, its RSI is closer to oversold than overbought, and we’re still below the 50-day moving average, near a 2-month low, and right around support at 13000.It can’t hurt to start nibbling now. There could be some more short-term pain, but if you waited for that perfect moment to start buying a year ago when it looked like the world was ending, you wouldn’t have gained as much as you could have.I think the key here is to “selectively buy.” I remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.Mike Wilson , chief investment officer at Morgan Stanley, had this to say about recent tech slides- “I don’t think this is the end of the bull market or the end of tech stocks per se, but it was an adjustment that was very necessary.”I like the levels we’re at, and despite the possibility of more “adjustments” in the short-run, it’s a good time to BUY. But just be mindful of the RSI, and don’t buy risky assets. Find emerging tech sectors or high-quality companies trading at a discount.For an ETF that attempts to correlate with the performance of the NASDAQ directly, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as when small-caps will be buyable, more thoughts on inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Monday‘s reversal I didn‘t trust, gave way to another upswing – still within this getting long in the tooth correction. It‘s not over, and corporate bonds aren‘t yet confirming – it has lately become a reasonable expectation that when the higher quality debt instruments (think LQD, TLT) have a good day, junk corporate bonds get under pressure, but seeing their (HYG) performance more aligned with the S&P 500 is what I am looking for in a rally on solid footing.Which is what we‘re not having yet. Just compare the tech performance to the rest of the market, especially when viewed from the decling new highs new lows (yes, these closed higher on Monday). It‘s apparent that yesterday‘s S&P 500 upswing was the result of reallocation to tech to the detriment (mild, but still) of much of the rest, in light of the key development of the day – falling Treasury yields.The stock market simply keeps dealing with the rising nominal rates, which would be easier when these move less fast and steeply than till now. Consolidation of their recent move appears underway, in fits and starts, as long-term Treasuries are:(…) trading historically very extended compared to their 50-day moving averages. While they can snap back over the next 1-2 weeks, the 10y Treasury bond yield again breaking 1.50% is a testament to the Fed not willing to do anything at the moment. On one hand, the central bank is fine with commodities on the move, which aren‘t yet really showing in CPI, (today‘s 0.4% reading is a baby step in this direction) and which the Fed claims would be only transitory. On the other hand, the bond market is buying into this assertion to a degree, because otherwise the long-term bonds decline would continue rather unabated. As we are in the reflationary stage when economic growth is rising faster than both inflation and inflation expectations, this laissez faire approach to inflation isn‘t likely to bite the Fed now as much as to truly wake up the bond vigilantes. It‘s that the „high rates“ we‘re experiencing currently, do not compare to the early 1980s, which underscores the fragility of the current monetary order. The Fed knows that, and it has been evident in the long preparatory period and baby steps in the prior rate raising and balance sheet shrinking cycle. The market will see through this, and the central bank would be forced to move to bring long-term rates down through yield curve control or a twist program, which would break the dollar, drive emerging markets, and not exactly control inflation – real rates would drop like a stone in such a scenario, turning around gold profoundly. But we‘re not yet there, as inflation is still too low and economic growth too high to force this scenario to play out. Market players are though already hedging against the rising (commodity prices thus far chiefly) inflation – and gold is still mostly on the defensive even as TIPS are starting to turn. What we‘re seeing in the miners to gold ratio, are green shoots in obvious need of follow through to turn the yellow metal sustainably around.Bottom line, if I had to pick only two markets to watch right now, it would be long-term Treasuries and the dollar.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookDaily rebound with a long upper knot, indicating consolidation ahead just as much as the low credibility Monday reversal. Force index is turning positive, but I am not looking at it to absolutely spike just yet. Overall though, the balance of forces is slowly but surely shifting towards the buyers, which would become more evident once we clear the key 3,900+ zone – perhaps even later today.Credit MarketsHigh yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio is the key non-confirmation, which can be partially explained by the bond market strains and reallocations into the long end of the curve instruments. Stocks are as a result relatively extended, yet without accompanying warning signs in the put/call ratio or the VIX. So far so good.Technology, Value and UtilitiesWhat a difference a day (of higher TLT prices makes)! Technology, which has been trading almost like utilities (lower black line) lately (yeah, reopening), rebounded ($NYFANG likewise strongly), and the value stocks endured a modest daily setback. Part and parcel of the microrotations as the stock market is getting used to higher nominal rates within the stock bull run as evidenced by the rebounding bullish percent index. Yes, this S&P 500 correction is in its latter innings.Treasuries and DollarNominal, long-term Treasury rates retreated on the day, and so did the dollar. Emerging markets liked that more than their bonds, which means that the current reprieve in yields is more likely temporary than not.Gold in the SpotlightMiners‘ outperformance of the yellow metal goes on, today illustrated with the stronger $HUI. Given the CPI readings just in, the gold bulls have a good reason to run with the assumption that even Fed‘s own real inflation underestimating models, are starting to reveal its slow appearance in the basket of consumer prices.It was on Monday when I showed you this chart first, and we‘re within a gold rebound highlighting some relative strength in the yellow metal vis-a-vis the rising rates – in the latter half of the 7-month long correction. The key narrative shift would be one of focus on inflation, inflation expectations, which would be also manifest in the Treasury inflation-protected securities (TIPS) chart. Thus far, the presented big picture view is a reason for modest, guarded optimism (in need of constant monitoring).Silver and Its MinersSilver has turned higher yesterday, and so did platinum – it‘s however the silver miners (SIL ETF), which is making the upswing a little suspect, as in need to prove itself stronger.SummaryStocks are likely to take yesterday‘s setback in their stride, and this long, drawn out correction increasingly appears to be approaching its inevitable end. The medium-term factors favor the bulls, and new highs are a question of broad based advance across the sectors, adjusted for the reopening trades favoring high beta stocks.The belated and thus far rather meek gold rebound can proceed, and should the mining stocks keep their outperformance (ideally accompanied by silver miners doing the same with respect to the white metal), that would be a hallmark of the unfolding rebound carrying on. For now, guarded optimism is still the name of the game in the precious metals arena.

Gold rallied, gold miners soared to new March highs and the USD Index finally moved lower; and most likely, these price moves are not yet over.The precious metals market finally moved yesterday (Mar. 9) after providing us with bullish indications for quite a few days. Let’s jump right into charts and examine the details, starting with the part of the precious metals market that showed particular strength – mining stocks.Figure 1 - VanEck Vectors Gold Miners ETF (GDX)Even though gold moved lower in early March, gold miners stopped declining after reaching my target area based several techniques – most importantly the 50% Fibonacci retracement based on the entire 2020 rally, and the previous lows and highs. Just as miners’ relative weakness had previously heralded declines for the entire precious metals sector, their strength meant that a rally was about to start. And that’s just what we saw yesterday (Mar. 9).Ultimately, it seems that the above corrections will result in the GDX ETF moving to about $34 or so.The resistance levels in the $34 - $35 area are provided by:The late-February 2020 highThe rising neck level of the previously completed head and shoulders patternThe analogy to how big miners’ correction was in April (assuming that the mirror similarity continues)The declining blue resistance lineThe 50-day moving averageAdditionally, please note that the last few local tops were accompanied by RSI at about 50. The latter is currently below 45, suggesting that this rally has more potential, but that it’s not particularly extreme.The confirmation that the top is indeed in might come from the volume. Please note that the last three times when we saw really important tops, the GDX rallied on particularly strong volume. If we see something like that within the next 5 trading days or so (quite likely on Monday or close to it), we’ll have an even bigger chance of catching the reversal.Consequently, the GDX is likely to form a top in the above-described area.After breaking below the head-and-shoulders pattern, gold miners would then be likely to verify this breakdown by moving back up to the neck level of the pattern. Then, we would likely see another powerful slide – perhaps to at least $24.This is especially the case, since silver and mining stocks tend to decline particularly strongly if the stock market is declining as well. And while the exact timing of the market’s slide is not 100% clear, the day of reckoning for stocks is coming , and it might be very, very close.As I explained previously, based on the similarities to the 1929 and 2008 declines, it could be the case that the precious metals sector declines for about three months after the general stock market tops. And it seems that we won’t have to wait long for the latter. In fact, the next big move lower in stocks might already be underway, as the mid-Feb. 2021 top could have been the final medium-term top.Let’s consider what the GDX and GLD did on an intraday basis yesterday.Figure 2 - VanEck Vectors Gold Miners ETF (GDX) and Gold ETF (GLD) ComparisonAs I already wrote, mining stocks rallied to new monthly highs, and the above 4-hour chart (each candlestick represents 4 hours of trading) makes it crystal-clear that the late-February bottom was the moment after which miners stopped declining and started to trade sideways. Gold (here: the GLD ETF, which I’m using to have an apples-to-apples comparison – both ETFs trade on the same exchange) continued to decline in March. Well, to be precise, miners did form new yearly lows in March, and we went long almost right at one of those intraday lows , but the moves were not significant enough to really change anything.So, since miners no longer wanted to decline, and there were only two other things left for them to do: either nothing or rally.They had been doing nothing for several days, due to the lack of bullish leadership in gold. They just got this leadership yesterday, and they soared.Now, let’s keep in mind what I wrote in yesterday’s intraday Alert – namely, that mining stocks tend to rally particularly well in the initial part of the upswing, and then they underperform during the final part of the rally . So, when gold is above $1,750 or so, miners might already be rallying to a limited degree. Consequently, miners might rally above $34.27, but that is far from being certain. They might actually rally slightly less – perhaps to exactly $34 or so.I applied the Fibonacci retracement levels to the above chart, but I actually used them as Fibonacci extensions. My current upside target for gold is at about $1,770 (which corresponds to about $166 in the GLD ETF) and it’s at about $34 for mining stocks (GDX ETF). The Fibonacci extensions emphasize that if both targets were to be reached, then it means that gold so far rallied (intraday) about half of its entire rally, while mining stocks rallied (intraday) about 61.8% of their entire rally. This perfectly fits miners’ tendency to outperform in the initial part of a given move, which makes both price targets more reliable.Having said that, let’s move to gold.Figure 3 - COMEX Gold FuturesGold rallied strongly after bottoming right in the middle of my target area and after moving almost right to its June 2020 bottom, and after almost doubling its initial January decline. Yesterday’s rally also meant invalidation of the brief breakdown below the 61.8% Fibonacci retracement level based on the entire 2020 rally. Thus, the very short-term trend is up.Please keep in mind that the upswing might be relatively short-lived – perhaps lasting only one week or so. There’s a triangle-vertex-based reversal point on Monday, so it wouldn’t be surprising to see an interim top at that time, especially considering that:The triangle-vertex-based turning points have been working particularly well in the recent past – they marked the January and February tops.The corrective upswings during this medium-term decline (especially in mining stocks) often took about a week to complete – at least the easy part of the upswing took a week.The USD Index has been rallying relentlessly – just like in 2018 – in the last couple of days, but a quick pullback would not be surprising. In fact, it seems that one is already underway.Figure 4 - USD Index (DX.F)On March 8, the USD Index had closed above its lowest daily closing price of August 2020 (92.13), but yesterday, it closed back below this resistance. This means that we just saw an invalidation of the breakout – which is a bearish sign for the short term.How low could the USD Index move during this pullback? Not particularly low, as the similarity to 2018 implies a rather unbroken rally. The February 2021 high of 91.6 seems to be a quite likely target, but we might see the USDX move a bit lower as well – perhaps to one of the classic Fibonacci retracements based on the recent upswing – lowest of them (the 61.8% one) being at about 90.8.This pullback might trigger a question about the validity of the analogy to the 2018 rally, which seems to have taken place without any interruptions.Figure 5The analogy seems to remain intact when looking at it from the long-term point of view. Let’s keep in mind the recent decline was a bit sharper and it took less time to complete.The 2017 – 2018 decline took 387 day (between the top and the first low) and then there were 82 days between the initial and the final low (21.19% of the decline).This time, there were 269 days between the top and the first low. Adding 21.19% to this time, points to Feb. 12 as the "proportionately identical" bottom time target. The final bottom formed on Feb. 25 - just 9 trading days away from the analogy-based target. The analogy remains clearly intact.“So, doesn’t it imply that there shouldn’t be any pullbacks until the USD Index rallies above 94? ”No. And this becomes obvious once we zoom in.Figure 6You see, it’s not true that there were no pullbacks during the 2018 rally. There were, but they were simply too small to be visible from the long-term point of view.The first notable pullback took place in early May 2018, and it contributed to a corrective upswing in the precious metals market. To be precise, the USD Index declined after rallying for 56 trading days, but gold rallied earlier – 51 trading days after the USD Index’s final bottom. The USDX’s immediate-top formed 16 trading days after its final bottom, and gold’s bottom formed 10 trading days after the USD’s final bottom.Comparing this to the size of the previous decline in terms of the trading days, it was:51 – 56 trading days / 283 trading days = 18.02% - 19.79%10 – 16 trading days / 283 trading days = 3.53% - 5.65%Now, let’s examine the current situation.Figure 7The preceding decline lasted for 200 trading days and there were 41 – 42 trading days between the final USDX bottom and the short-term reversals in gold and USDX. Comparing this to the final USDX bottom, we get 7 – 8 trading days.Applying the previous percentages to the length of the most recent medium-term decline in the USD Index provides us with the following:18.02% - 19.79% x 200 trading days = ~36 - ~40 trading days3.53% - 5.65% x 200 trading days = ~7 - ~11 trading daysThe above estimation of about 36 – 40 trading days almost perfectly fits the current 41 – 42-day delay, and the estimation of about 7 – 11 trading days almost perfectly fits the current delay of 7 – 8 trading days.In other words, the analogy to the 2018 performance does not only remain intact – it actually perfectly confirms the validity of the current corrective upswing. Once again, it’s very likely just a pullback, not a big trend reversal.Also, please note that back in 2018, the USD Index corrected after moving back above its mid-2017 lows and now we see the analogy to that – the USDX corrects after moving back above its mid-2020 lows. Back in 2017, the USD Index corrected to approximately its previous short-term high (the January 2018 high). Now, the February high is providing strong support at about 91.6 – that’s where this brief correction might end – on an approximate basis.The above perfectly fits the scenario in which the precious metals market rallies on a very short-term basis (likely to about $1,770 in gold and about $34 in GDX), and then resumes its medium-term decline.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

The daily banging on the 3,900 threshold shows in yesterday‘s upper knot, and this milestone has very good chances of being conquered today. More important than the exact timing though, are the internals marking the setup – we‘ve indeed progressed very far into this correction. While not historically among the longest ones, it‘s still getting long in the tooth – just as I was writing throughout the week.And it is getting stale, even if I look at the star non-cofirnation, the high yield corporate bonds. Relatively modest daily upswing, outshined by investment grade corporate bonds. Yes, the credit markets are calming down, and the tiny daily long-term Treasuries upswing doesn‘t reflect that fully just yet. Besides giving breathing room to defensives such as utilities and consumer staples, it‘s also very conducive to the precious metals sector.Copper, oil or agrifoods aren‘t flashing warning signs either – this is a healthy consolidation of steep prior gains as the dollar is getting again under pressure on retreating yields. Just as stocks are undergoing the larger rotation in favor of high beta value plays (financials and manufacturing ones are doing great, airlines jumped), the leaders out of the corona deflationary crash are leading no longer (technology). The picture of the unfolding reflationary recovery is a healthy one as rates are rising on account of improving economic environment, and inflation doesn‘t really bite yet.Ideal environment for the stock market to do well (hello my profitable open position), and for commodities to do really well. While the Fed is prepping the markets for (temporary, they say) higher inflation readings, gold didn‘t react too bullishly to yesterday‘s mildly positive CPI data – just wait for PPI data which would reflect the surging commodity prices more adequately. At the moment, evaluating the strength and internals of precious metals rebound, is the way to go as we might very well have seen the gold bottom, with the timid $1,670 zone test being all the bears could muster. Time and my dutiful reporting will tell.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsVolume isn‘t sharply contracting, and coupled with the price action, the rebound above 3,900 has good chance of succeeding. The path most ahead to entertain your imagination as well, looks as a little congested series of daily candles followed by a longer white one. We‘re in a stock bull market after all, and still not in danger of a significant (10%+) correction as I have been writing throughout 2021.Market breadth indicators have turned the corner really, underscoring accumulation within a returning bull market advance – just as the bullish percent index shows. A brief sideways to higher consolidation of this week‘s advance would only help to solidify it before the next run higher.Credit MarketsHigh yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio‘s degree of non-confirmation has decreased, at least if you take direction into view. Finally, high yield corporate bonds are turning higher, and once they catch breath even more, the all time highs already in sight would be conquered as smoothly as the 3,900 zone I delineated earlier.Gold Sector ExaminedVery mild upswing in both the gold miners and gold – along the lines of a daily consolidation with bullish undertones. This early in the precious metals upswing, miners are in the pool position, and their relative and gradually increasing strength has been visible since the early Mar days. So far so good here.Silver, Platinum and the RestSilver isn‘t yet outshining the rest of the crowd, and that‘s good, for it often tends to do so in the later stages of the precious metals sector advance. Within the coming precious metals advance, I continue to view silver outperformance as expected. Part monetary metal, part commodity, it‘s uniquely position to benefit. Its yesterday‘s setback is nothing to be concerned about as the gold, gold miners and platinum rebound keeps doing largely well.Comparing the gold miners to gold ($HUI:$GOLD) ratio to the silver miners to silver (SIL:$SILVER) ratio is returning a bullish snapshot of the current advance too. The beaten down gold sector is leading the charge, and the silver one will play catch-up in time.SummaryHaving reached the 3,900 zone, the S&P 500 is likely to consolidate the gains next. Due to the improving key markets (corporate bonds and tech), I am not looking for any this week‘s potential setback to turn the tide in this aging correction really.The gold upswing is proceeding, helped by the weakening dollar and ever so slightly retreating Treasury yields. After clearing the volume profile defined support at $1,720 and stretching a little below, the bulls next objective is the roughly $1,775 figure marking the Feb lows. Should that one be conquered, the odds of having seen gold bottom this Monday, would have dramatically increased.

US 30 surges from daily supportUS Congress’s green light on the $1.9 trillion relief package seems to have put stock markets back on track. This came in as half-expected on the technical side as the index bounced off the year-long bullish trendline on the daily chart.From the hourly perspective, the breakout above the previous high (32050) has triggered a broader rally fuelled by short-coverings.As the RSI shows signs of overheating, a limited pullback might attract more buyers. 32300 near the short-term trendline would be the support to watch for.XAGUSD recovers from key supportLower treasury yields have made the non-yielding metal more attractive, right when buyers bid up the price from its daily support level (24.80).Following the previously mentioned RSI divergence, an indication of a potential reversal, silver saw a limited drop then rallied above the first resistance of 26.20.After a brief consolidation, the price could rise towards the next target around 27.00 as long as it stays above 25.60.To the downside, 24.80 is critical in keeping the bullish sentiment intact.NZDUSD looks for a bullish breakoutThe New Zealand dollar is having its fair share of markets’ renewed affection for risk assets. A rebound from the psychological level of 0.7100, a two-month low has brought the pair to its first hurdle: 0.7270 where strong selling pressure could cap the rally.The kiwi is gathering momentum near the rising trendline as the RSI falls back into the neutral zone. If buyers can overcome this resistance, an extended rally may push the price towards 0.7400.A drop below 0.7160 though could lead to a retest of the daily support.

Records were made to be broken. Thursday's (Mar. 11) session was the embodiment of that.Every index closed in positive territory, and the Dow, S&P, and Russell all closed at record highs. Meanwhile, the Nasdaq led the way again with a 2.52% gain. After touching correction territory two times in the last week, the Nasdaq is up over 6.3% for the week. This is why you buy the dips, and why I said the second, the Nasdaq drops below 13000 support that you should buy.Be bold, a little contrarian, block out the noise, and never try to time the market. Sure, when you buy a dip during uncertain times, you run the risk of encountering more pain. However, in the long-term, stocks trend upwards.For example, do you also know what happened precisely a year ago, on March 11, 2020? The headline on CNBC read like so: Dow plunges 10% amid coronavirus fears for its worst day since the 1987 market. See for yourself.You know what else happened? The market didn't bottom for another 2 weeks and declined another 21%.However, if you bought the Dow-tracking DIA ETF on March 11 and held it this entire time, you'd have gained 40.51%.Imagine if you bought the dip as I recommended for tech.I cautiously said to BUY the QQQ ETF, which tracks the Nasdaq, on February 24 but recommended doing it cautiously and selectively. I doubled down once it dropped below support at 13000 and tripled down once the Nasdaq hovered around 12600 on Monday (Mar. 8).As I said before, the Nasdaq is up over 6.3% this week. If you followed my lead on this, you'd be pleased.Inflation fears and the acceleration of bond yields are still a concern. But let's have a little perspective here. It appears as if things have stabilized for now. Bond yields are still at a historically low level, and the Fed Funds Rate remains 0%. Plus, jobless claims beat estimates again and came in at 712,000. This is nearly the lowest they've been in a whole year.We will see how President Biden's newly signed $1.9 trillion stimulus package affects yields and inflation. But for now, with the Fed showing no signs of hiking rates shortly and inflation looking tamer than expected, we could see more firepower for stocks.So is the downturn overblown and already finished?Time will tell. I think that we could still see some volatile movements and consolidation to close the week out. That's just what happens with surges and swings like this. While I maintain that I do not foresee a crash like what we saw last March and feel that the wheels remain in motion for an excellent 2021, Mr. Market still has to figure itself out.A broad-based correction of some sort is still very possible. I mean, the Nasdaq's already hit correction territory twice in the last week. Corrections are healthy and normal market behavior. Only twice in the previous 38 years have we had years WITHOUT a correction (1995 and 2017).Most importantly, a correction right now would be an excellent buying opportunity. Once again- look at the Nasdaq since March 8.It can be a very tricky time for investors right now. But never, ever, trade with emotion. There could be some more short-term pain, yes. But if you sat out last March when others bought, you are probably very disappointed in yourself.You can never time the market.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. The market has to figure itself out. A further downturn is possible, but I don't think that a decline above ~20%, leading to a bear market, will happen any time soon.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- That’s Why I Called BUYFigure 1- Nasdaq Composite Index $COMPCan I flex again, please?Flexing.The Nasdaq's performance this week is why I called BUY despite hitting two corrections in the last week. On Tuesday (Mar. 9), the Nasdaq saw its best day since November. The index's gains continued after that and is now sitting pretty up over 6.3% for the week.If you bought the dip, good on you. It's an excellent time to be a little bit bold and fearless. Take Ark Funds guru Cathie Wood, for example. Many old school investors scoffed at her comments on Monday (Mar. 8) after she practically doubled down on her bullishness for her funds and the market as a whole. After crushing 2020, her Ark Innovation Fund (ARKK) tanked over 30%. Many called her the face of a bubble. Many laughed at her. Tuesday, March 9, ARKK saw its best day in history. Week-to-date, ARKK is up a staggering 16.71%.I'm not saying that we're out of the woods with tech. But I am saying not to try and time the market, not get scared, and have some perspective.The Nasdaq is once again positive for the year, but unfortunately, I no longer think we're at a BUY level. We could see some consolidation and profit-taking to end the week. Still, if we see a significant drop, especially below 13000, it could be a good buy again. It can't hurt to keep nibbling- we're still off the highs. I'm going to stick with the theme of "selectively buying" sub-sectors such as cloud computing, e-commerce, and fintech.I think you should now HOLD and let the RSI guide your Nasdaq decisions. See what happens over subsequent sessions, research emerging tech sectors, and high-quality companies, and buy that next dip.For an ETF that attempts to correlate with the performance of the NASDAQ directly, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as when small-caps will be buyable, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Stock bulls went right for all time highs yesterday, clearing the 3,900 threshold in this correction – one that is in its very late innings indeed. But the preceding upswing has been sharp, and not all the internals support such a swift recovery, which is why I am still looking for consolidation to strike at any moment.We might be actually experiencing such a daily one right now, as today‘s premarket session has sent S&P 500 futures a few dozen points down. The big picture is though one of of the stock market getting used to rising rates, which are rising in reflection of the economic growth. But what about the snapback short-term rally in long-term Treasuries? It‘s not materializing as the instrument went down again yesterday – unconvincingly bobbing above recent lows. The defensive sectors such as consumer staples and utilities, reversed yesterday (at a time when technology rose), sending a warning that we‘re about to see higher rates again. Probably not happening as fast as through Feb, but still. Let‘s bring up my recent perspective on high rates, what they are exactly:(…) the „high rates“ we‘re experiencing currently, do not compare to the early 1980s, which underscores the fragility of the current monetary order. The Fed knows that, and it has been evident in the long preparatory period and baby steps in the prior rate raising and balance sheet shrinking cycle. The market will see through this, and the central bank would be forced to move to bring long-term rates down through yield curve control or a twist program, which would break the dollar, drive emerging markets, and not exactly control inflation – real rates would drop like a stone in such a scenario, turning around gold profoundly. But the market knows the Fed isn‘t getting ready to really do anything more than it does right now. Gold rebounded on Tuesday, and the rally took it above $1,730 but the daily reversal is concerning. As I wrote yesterday in the title, the gold bulls can‘t rest – but they are resting, and prices are back at the lower end of the $1,720 volume profile.Assessing the damage in the early stages of today‘s session will clarify whether the rally‘s dynamics are still intact, or not – regardless of today‘s headwinds. Silver isn‘t exactly at its strongest today, and we‘re likely to get soon into the session an idea about where miners‘ strength is. And it‘s more likely that it won‘t be anything to write home about.Let‘s recall my yesterday‘s words, and pick what‘s relevant to the metals:(…) While the Fed is prepping the markets for (temporary, they say) higher inflation readings, gold didn‘t react too bullishly to yesterday‘s mildly positive CPI data – just wait for PPI data which would reflect the surging commodity prices more adequately. At the moment, evaluating the strength and internals of precious metals rebound, is the way to go as we might very well have seen the gold bottom, with the timid $1,670 zone test being all the bears could muster. Time and my dutiful reporting will tell.Commodities are likely to do well in this reflationary phase, and the same goes for its turn to inflation. With precious metals, much depends upon their discounting mechanism‘s timing – when would they start doubting the transitory inflation utterances.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe S&P 500 upswing continues in pretty much a straight line, and the frequency of upper knots raises the probability of a short-term reprieve. Yes, it‘s risk-on, but a little pause would be healthy. Credit MarketsHigh yield corporate bonds have moved higher yesterday, mirroring the S&P 500 advance. That‘s encouraging even though the high yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio is still visibly lagging behind stocks. The non-confirmation‘s seriousness has though decreased markedly over the two last sessions, pointing to improving internals of the upcoming stock market upleg.Technology and ValueTechnology has been rallying on decreasing volume, also demonstrating a prominent upper knot. If there is one sector where the coming S&P 500 consolidation would originate, it would be here. Value stocks held their own yesterday, in a nod to the high beta reopening trades. I am not looking for VTV to weaken distinctly here.Gold and YieldsThe gold upswing reversed intraday while long-term Treasuries (TLT ETF) hadn‘t really moved in their tight daily range. Erasing much of the overnight selling today, would be probably the most the bulls would be able to achieve today. But even that isn‘t the deciding factor to determine the fate of the recovery off the $1,670 area.Upswing in the BalanceGold miners are still painting a positive picture. They are outperforming gold while silver isn‘t spiking – the white metal is under even more pressure today than gold itself. So, the signs from miners and silver balance each other out to a degree. The whole sectors keeps hanging in the balance after yesterday‘s session. Each day or even hour the bulls don‘t utilize to reverse today‘s setback, is questioning the upswing continuation. Not much to add here as the daily momentum apprears shifting to the bears again.SummaryHaving conquered the 3,900 zone, the S&P 500 is likely to consolidate the gains next. The put/call ratio and volatility are at relatively lower readings, and the next setback for stocks would come from tech again. Not overly dramatic, but a brief challenge still.The gold upswing stalled, and its fate is being decided. Having fallen through the volume profile defined support at $1,720, the bulls objective is to recapture this zone. Tall order..

This principle is significant in times like right now where Silver is seeming, say intuitively, trading sideways and might even feel bearish most of the time in this trading range. The truth however is, that Silver is in a major bull run and will be so for quite a while coming.Market manipulation and the fact that the market itself is counterintuitive by nature make continuous entry discipline on low-risk trading especially difficult for beginning traders who try to follow their hunches.Weekly Chart of Silver in US-Dollar, On the move:Silver in US Dollar, weekly chart as of March 11th, 2021.Looking at the weekly chart above, we see a steep trend leg up. Next, prices meandering through a sideways range. Significant is the latest behavior through the range from the range low to the range high, retracing only moderately through the range when bouncing from the range high to a Fibonacci retracement of 0.38, where it bounced strongly – a clear sign of strength.  Silver in US-Dollar, Weekly Chart, Supporting factors:Silver in US Dollar, weekly chart as of March 11th, 2021.But that isn’t all. Another weekly chart representation also shows that this Fibonacci level is supported by the round number US$25. Here we find a significant supply zone based on our volume analysis tool. Here most transactions have been happening over time at around a price level of US$25.25.In addition the intensity of the price bounce is indicating strength. Price didn’t retest but moved strongly up for a reversal of direction.This “stacking of odds” is part of the process to qualify entries instead of “feeling” that prices might change.Weekly Chart, Silver in US-Dollar, Silver-Process over intuition:Silver in US Dollar, weekly chart as of March 11th, 2021.In conclusion, we find that the process-oriented trader has significant evidence for a trend continuation. This is especially drawn from the first leg up with a high likelihood of further advancements and a range break in the near future.The weekly chart above shows through its regression channel why prices can quickly advance towards the upper rim (red upper channel line). There we would take partial profits based on our quad exit strategy whole prices should then increase further from there through time. Prices still near the mean (red dotted line) can also from a mathematical, statistical perspective within reason advance further. What also points towards the overall interest in Silver is the increased volume within the last six months. Shown in the red and turquoise horizontal bars.Silver, Process over intuition:It isn’t practice alone. Only a refined rule set for this process will make it possible to follow one’s own instruction. If there are holes where intuition can step in to make a partial decision, failure is near. Our need to be right (ego) is strong, and it will try to get its needs met. So it might try to lure you into fulfilling your hunch needs by altering money management. Don’t let your subconscious trick you into manipulating your position size because you have intuitions or hunches. Starting with paper trading and growing slowly with a minimal position size is the best bet not to lose one’s shirt in the early years. Constant refinement of your process rules and accepting trading to be a boring endeavor while executing is the way to consistency and riches.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|March 12th, 2021|Tags: Gold, low risk, Silver, silver bull, Silver Chartbook, technical analysis, time frame, trading principles|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

Last week went a lot better than the week before. Especially if you’re a Nasdaq bull and bought the dip ( like I recommended Feb 24 ).The real story, though? We’ve still got the Dow, S&P, and Russell firmly at record highs.This week should be full of excitement for the indexes. Will we see more record highs? Will the Nasdaq catch up and recover? How will the newly signed $1.9 trillion “America Rescue Plan” impact the market? Will inflation fears and accelerating bond yields spook investors again?As you can see, there are clearly questions right now for stocks- despite the wheels in motion for pent-up consumer spending and a strong stock rally. Plus, we’ll start having many retail investors with an extra $1,400 to spend looking to have a little fun.Inflation fears and surging bond yields are still a concern and have caused significant volatility for growth stocks. But let’s have a little perspective here. Bond yields are still at a historically low level, and the Fed Funds Rate remains 0%. Plus, jobless claims beat estimates again and came in at 712,000. This is nearly the lowest they’ve been in a whole year. Last week’s inflation data also came in more tamer than expected.So what should you pay attention to this week?More inflation data, jobless claims, and consumer sentiment will be released throughout the week, for one.But pay incredibly close attention to the Fed. Bonds still remain the market’s biggest wild card. With the Fed meeting Tuesday and Wednesday, bond yields could take their cue from what they say. No action is expected to be taken, and the Fed is expected to indicate more substantial growth. Fed officials are also not expected to alter their interest rate outlook and may stick to the plan of keeping rates this low through 2023.If this goes as expected, bond yields could potentially pop again, reinvigorating the rotation into value and cyclical plays and out of tech and growth plays.Time will tell what happens.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. The market has to figure itself out. A further downturn is possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen any time soon.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Is the Dow *Gulp* Overbought?Figure 1- Dow Jones Industrial Average $INDUNot much new to report on this. Except for that, it keeps ticking up towards overbought territory and hitting record highs. Year-to-date, we’re now up about 7.1%- almost double what the S&P and Nasdaq have done so far this year.It also managed to gain over 4% this past week.I don’t feel that we’re buyable at all right now. If you have exposure, HOLD and let it ride. Maybe start to consider taking some profits too.The index could greatly benefit from the stimulus package due to all of the cyclical stocks it holds. I can definitely foresee some pops in the index as investors digest the unprecedented amount of money being pumped into the economy, coupled with reopening excitement. But you can’t expect the index to keep going up like this and setting records every day. Plus, the RSI is almost 69 and showing overbought signs.So, where do we go from here?Many analysts believe the index could end the year at 35,000, and the wheels are in motion for a furious rally. But you could do better for a buyable entry point.From my end, I’d prefer to stay patient, assess the situation, and find better buying opportunities.My call on the Dow stays a HOLD, but we’re approaching SELL.For an ETF that aims to correlate with the Dow’s performance, the SPDR Dow Jones ETF (DIA) is a reliable option.For more of my thoughts on the market, such as tech, if small-caps are buyable, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Now that stocks closed at new all time highs, the correction is officially over. And what little rest stock bulls could claim last week, arrived on Friday. Yet, the bull is strong enough to defend the 3,900 zone, and charge higher the same day.Who could be surprised, given the modern monetary theory ruling the economic landscape? The Fed amply accomodative, one $1.9T stimulus bill just in, and a $2T infrastructure one in the making. That‘s after the prior Trump stimulus, and who would have forgotten how it all started in April 2020? The old congressional saying „a billion here, a billion there, and pretty soon you‘re talking real money“, needs updating.Stocks are readying another upswing as the volatility index is approaching 20 again, and the put/call ratio shows complacent readings. The sectoral examination supports higher highs as tech has reversed intraday losses, closing half of the opening bearish gap. Value stocks naturally powered to new highs, with industrials, energy and financial performing best. Real estate keeps showing remarkable momentum, and has been among the best performers off correction‘s lows.These all have happened while long-term Treasury yields have broken to new highs. Are they stopping to be the boogeyman?As I‘ll show you, inflation expectations are rising – and the bond market is reflecting that. The market‘s discounting mechanism is at work, mirroring the future virtually ascertained CPI rise, if you look carefully into the PPI entrails. This inflation won‘t be as temporary as the Fed proclaims it would – but it still hasn‘t arrived in full force. We‘re merely at the stage of financial assets rising, because that‘s where the newly minted money is chiefly going.As regards gold, let‘s recall my Thursday‘s words:(…) At the moment, evaluating the strength and internals of precious metals rebound, is the way to go as we might very well have seen the gold bottom, with the timid $1,670 zone test being all the bears could muster. Time and my dutiful reporting will tell.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe S&P 500 upswing took a little breath, and at the same time continued unchallenged. The path of least resistance simply remains higher. Credit MarketsHigh yield corporate bonds (HYG ETF) have declined, but don‘t give the impression of readying a breakdown. I understand it as a daily weakness, because the whole bond market was under pressure on Friday, with investment grade corporate bonds (LQD ETF) taking it on the chin as well. Russell 2000 and Emerging MarketsRussell 2000 keeps doing better than the 500-strong index, which is natural and expected given the prevailing investment themes doing well, value stocks rising, and euphoric speculation running rampant. Emerging market weakness needs to be viewed through the strains stronger dollar and rising rates cause abroad. That‘s why I am not viewing EEM underperformance as a warning sign for U.S. equity markets.Inflation Expectations and YieldsQuite a relentless rise in my favorite metric of forward looking inflation, isn‘t it? Treasury inflation protected securities to long-dated Treasuries (TIP:TLT) have been relentlessly rising off the corona crash lows, and their accent in 2021 has accelerated just as steeply as the nominal rates reflect (see below).Gold Upswing AnatomyGold refused the premarket losses, and has rebounded to close almost unchanged on the day. Is that sign of strength or weakness?The miners to gold ratio provides a clear answer, and it‘s a bullish one to open the week. Finally, the gold market is showing signs of life on a prolonged basis, which I started talking on Tuesday. Regardless of Friday‘s weakness in the yellow metal, it‘s so far so good as the miners keep leading the charge.Silver weakness in the course of the upswing isn‘t a too worrying sign – silver miners outperforming as well, is a more important signal. Smacks of broadening leadership in the unfolding precious metals upswing. SummaryThe consolidation of S&P 500 gains was and remains bound to be a short-term affair as the bulls take on new highs and surge well past them in the days and weeks ahead. The top is very far off as this still nascent recovery gets so much stimulus fuel that overheating becomes a very real possibility this year already.Gold has turned an important corner on Friday, and so have the miners – be they gold or silver ones. The precious metals upswing is unfolding, and decreased sensitivity to rising yields is a pleasant sight for the bulls. Well, that‘s exactly what I had been writing about transitioning to a higher inflation environment exactly one week ago.

The yellow metal’s behavior looks more bearish now than it did in 2017-2018. The USDX has a lot of bullets in its chamber, and gold can be riddled with them.Plenty of warning signs on the near-term horizon: The USDX is after a long-tern breakout, traders are reducing net-short positions, and the slightest shift in U.S. dollar sentiment can lead the rest of the herd to follow. If a USDX resurgence is combined with an equity shock, then the precious metals are in for trouble.Last Friday (Mar. 12), we focused quite a bit on the moves in the gold miners and how their related ETFs (GDX and GDXJ) are faring and which will suffer most during the next phase of the decline. We also touched on this subject last Wednesday as well. It was important to shed light on the miners because they’ve been leading the charge in the corrective upswing. I also wanted to explain the Eurozone’s impact on the precious metals and how crucial it is to examine the bigger picture and how the pieces are all connected. Today, let’s shift our attention over to the currency perspective, namely the USDX.The price shape and time analogies are truly remarkable right now. It’s quite often the case that history rhymes, but it’s rare for it to rhyme so closely and clearly to what we now see in the case of the USD Index. And the implications for precious metals investors are profound.On Mar. 8 , I warned that with the USD Index confronting its mid-2020 lows (resistance), a short-term dip could occur in the coming days. But after declining by 0.34% last week, the negativity could be short lived.Case in point: the 2017-2018 analogue is already in full swing, and while short-term dips were part of the historical journey, the USDX could be about to exit its consolidation phase.Please see below:You can also see the similarity between two periods and the technical patterns that they included in the chart below:Even while looking at the price moves for just a second, the size and shape of the 2017-2018 analogue clearly mirrors the 2020-current price action . Although this time, it took less than 118 days for the USD Index to move from peak to trough.In 2017-2018, it also took 82 days for the USDX to form a final bottom (the number of days between the initial bottom and the final bottom) and the duration amounts to 21.19% of the overall timeframe. If we applied a similar timeframe to today’s move, then the USD Index should have bottomed on Feb. 12. It actually bottomed (finally) on Feb. 25, which was just 8 trading days away from the former date. Taking into account the sizes of the moves that preceded the previous declines (they took approximately one year to complete), this is extremely close and an excellent confirmation that the self-similar pattern remains intact.In addition, as the USDX approached its final bottom in 2017-2018, gold traded sideways. Today, however, gold has been in a downward spiral. From a medium-term perspective, the yellow metal’s behavior is actually more bearish than it was in 2017-2018.Finally, the USD Index’s breakout above its 50-day moving average (which it still holds today) is exactly what added gasoline to the USDX’s 2018 fire. Case in point: after the 2018 breakout, the USDX surged back to its previous high. Today, that level is roughly 94.5.Moreover, gold’s trepidation alongside the USD Index strength on Mar. 12 adds even more validity to the 2017-2018 analogy.I wrote on Mar. 10:It’s not true that there were no pullbacks during the 2018 rally. There were, but they were simply too small to be visible from the long-term point of view.The first notable pullback took place in early May 2018, and it contributed to a corrective upswing in the precious metals market. To be precise, the USD Index declined after rallying for 56 trading days, but gold rallied earlier – 51 trading days after the USD Index’s final bottom. The USDX’s immediate-top formed 16 trading days after its final bottom, and gold’s bottom formed 10 trading days after the USD’s final bottom.Comparing this to the size of the previous decline in terms of the trading days, it was:51 – 56 trading days / 283 trading days = 18.02% - 19.79%10 – 16 trading days / 283 trading days = 3.53% - 5.65%More importantly though, when the USD Index turned a short-term decline into consolidation in mid-2018, gold’s hesitant reaction highlighted the yellow metal’s anxiety. And what followed? Well, gold’s next move was significantly lower, while the USD Index’s next move was significantly higher. This means that it was likely a good idea that we took profits from our long positions recently when the GDX moved to $32.96 (opening at $30.80 - $31).Please see below:In addition, if we analyze the pairs’ very recent price action, it’s a splitting image.On Friday (Mar. 12), the USD Index rallied by 0.28%, while gold was (roughly) directionless despite the intraday volatility. And just like in 2017-2018, the yellow metal’s behavior signals a forthcoming climax . As a result, gold and the USD Index are behaving exactly as they did before going their separate ways in 2017-2018. And this means a bearish gold price prediction for the following weeks (not necessarily hours, though).Please see below:To explain, I wrote on Mar. 10:Let’s examine the current situation: the preceding decline lasted for 200 trading days and there were 41 – 42 trading days between the final USDX bottom and the short-term reversals in gold and USDX. Comparing this to the final USDX bottom, we get 7 – 8 trading days.Applying the previous percentages to the length of the most recent medium-term decline in the USD Index provides us with the following:18.02% - 19.79% x 200 trading days = ~36 - ~40 trading days3.53% - 5.65% x 200 trading days = ~7 - ~11 trading daysThe above estimation of about 36 – 40 trading days almost perfectly fits the current 41 – 42-day delay, and the estimation of about 7 – 11 trading days almost perfectly fits the current delay of 7 – 8 trading days.In other words, the analogy to the 2018 performance does not only remain intact – it actually perfectly confirms the validity of the current corrective upswing. Once again, it’s very likely just a pullback, not a big trend reversal.The bottom line?Given the size of the 2018 upswing, 94.5 on the USD Index is likely the first, of many, potential upside targets.Adding to the list of upside catalysts, the USD Index still has plenty of other bullets in its chamber. For instance, we’re also in the early innings of a shift in U.S. dollar sentiment. With short interest hitting an all-time high in late-2020, it was a complete fire sale. Today, however, short interest may have peaked.Please see the below chart based on the CoT report :Please consider how big rallies followed the moments when the net speculative position as % of total open interest started to rally back up after being oversold for months. The situation here is still more extreme than it was in early 2018 and 2014, suggesting that the upcoming rally might be bigger than the ones that we saw then.As further evidence, speculative futures traders ( non-commercial ) actually reduced their net-short positions by 1,216 contracts last week (the net of the two values in the red box below). As a result, the slightest shift in sentiment could lead the rest of the herd to follow.Finally, let’s not forget that the USD Index is after a long-term, more-than-confirmed breakout. This means that the long-term trend for the U.S. dollar is up.In conclusion, the USD Index is likely shifting from consolidation to ascension. With the size, scope and duration of the recent price action mirroring 2017-2018, it’s only a matter of time before the USD Index’s medium-term breakout gives way to a material breakthrough. What’s more, the USD Index is finally reacting to the rise in U.S. Treasury yields . Initially ignoring the late-2020 surge, a bottom, and subsequent rally in the U.S. 10-Year Treasury yield has lifted the USD Index 80% of the time since 2003. And with the relationship seemingly restored in 2021, the combination is profoundly bearish for the PMs, especially given today’s triangle-vertex-based reversal in gold.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

After an incredible rally phase that initiated just one day before the US elections in November 2020, we've seen certain sectors rally extensively.  Are the markets starting to warn us that this rally phase may be stalling?  We noticed very early that some of the strongest sectors appear to be moderately weaker on the first day of trading this week.  Is it because of Triple-Witching this week (Friday, March 19, 2021)?  Or is it because the Treasury Yields continue to move slowly higher?  What's really happening right now and should traders/investors be cautious?The following XLF Weekly chart shows how the Financial sector rallied above the upper YELLOW price channel, which was set from the 2018 and pre COVID-19 2020 highs.  Early 2021 was very good for the financial sector overall, we saw a 40%+ rally in this over just 6 months on expectations that the US economy would transition into a growth phase as the new COVID vaccines are introduced. Be sure to sign up for our FREE market trend analysis and signals now so you don’t miss our next special report!We are also concerned about an early TWEEZERS TOP pattern that has set up early this week.  If price continues to move lower as we progress through futures contract expiration week, FOMC, and other data this week, then we may see some strong resistance setting up near $35.25.  Have the markets gotten ahead of themselves recently?  Could we be setting up for a moderately deeper pullback in price soon?The following SSO, ProShares S&P 500 ETF Weekly chart, shows a similar setup.  Although the rally in the SSO is not quite the same range as the XLF, we are seeing a solid TWEEZERS TOP pattern setup on the SSO chart over a period of many weeks.  We also found the moderate weakness in the US indexes interesting this morning.  Last week, we continued to see very strong buying trends.  Today, we see those trends have almost vanished.  Are the markets setting near highs waiting for some announcement or news to push them into a new trend?The US stock markets have not experienced a moderate price pullback since August 2020 – when the SPY pulled back almost 11%.  Volatility is still quite high with 2% to 3%+ swings between trading days.  A moderate pullback from these levels could represent another -8.5% to -14% decline before true support is found.Watching the Yields, Precious Metals, and the moderate weakness in trend that started this trading week, we can only suggest that active traders/investors remain moderately cautious.  Our BAN Trader Pro strategy is currently 100% CASH (no trades) for a reason.  Pay attention to this rotation in the markets and the moderate weakness recently.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.Have a great week!

USDCHF stays in rangeAfter its meteoric rise, the US dollar is likely to go sideways as traders await a new catalyst from this week’s FOMC.The break below 0.9260 along with a bearish MA cross was a sign that the price action has gone into a consolidation if not a reversal. A brief rally is not excluded but the recent high of 0.9375 may cap any advance in the short-term.The lower band of the trading range is 0.9180, a resistance-turned-support which also lies around the 20-day moving average on a larger time frame.EURGBP finds support above the bearish trendlineProfit-taking seems to be the theme at the beginning of the week, and in the case of the sterling, buyers have reduced their bets in anticipation of the BoE meeting.The euro took a chance to bounce from the key short-term support area around 0.8550 after a week-long consolidation. The rise above the bearish trendline coupled with the previously mentioned RSI divergence would confirm the bullish bias.Clearing the psychological level of 0.8600 would open the path towards the next target 0.8650.GER 30 looks for support after the new highThe DAX is looking to consolidate its gains on the high ground after global markets regained optimism.A declining RSI indicator from a previously overbought situation is good news for traders looking to join the rally. As the bull market has seemingly resumed, a momentary pullback could see strong buying interest in bidding up the index.14390 is the immediate support but a failure to bounce would suggest a protracted retracement towards the rising trendline (14250).

All markets are related. Looking for liquidity provides times when execution is guaranteed, and slippage minimized. Professionals tend to gravitate towards the futures and forex markets. These markets are leveraged and least regulated (no uptick rule for shorting the market).Stacking Liquidity, When to trade Bitcoin:Stacking Liquidity, GMT daily chart as of March 15th, 2021The chart above tries to show when these prime times occur daily to place one’s trades. For the long-term investor, these times guarantee good fills and good times to get in and out of their positions. For short- to mid-term trades, these times represent in addition opportunities to find themselves in transactions at the right time. To clarify, whenever a market opens around the globe, it means an abnormality, a possible imbalance. These imbalances can be the seed to a directional move more significant than at other times.If you visit Wall Street, you will find market makers on typical days trade the market open for about ninety minutes, then handing over operations to their assistants while enjoying elaborate lunches and returning for the last 90 minutes of the trading session. You want to focus alongside this more meaningful time in the market rather than being caught in the noise.It is stacking one’s odds that provide for a consistent outcome of profitable trading. In this case, we minimize risk by entering and exiting the market at Prime Time. Prime Time being liquidity stacked session overlaps (Asia+London and London+New York). BTC-USDT, Daily Chart, The weekend fake:BTC-USDT, daily chart as of March 15th, 2021That leaves us with weekend moves that have a lower probability of follow-through. Last weekend’s move to all-time new highs is a good example. Old highs got penetrated, but actual price behavior reveals once the Asia session starts on Monday.Short-term trading as such is directionally neutral for now. For the midterm, we plotted possible reentry zones in the daily chart above.BTC-USDT, Weekly Chart, A bright future:BTC-USDT, weekly chart as of March 15th, 2021We find the long-term price expansion of Bitcoin still in place as long as prices do not runaway towards the upside exuberantly in fast motion.Even if you have high time frame entries or exits, it is wise to pick market times of a high degree of liquidity and strong participation.When to trade Bitcoin:It is essential to look at one’s desired trading instrument for abnormalities like the weekend night moves on Bitcoin. Position yourself before breakouts to such moves to avoid traps and volatility that requires larger stops, representing larger risk.Bitcoin has a relationship with the precious metal sector. Gold leading this sector typically shows price moves at the London session open (4:00 am EST), and as such, these are times to have an eye out for Bitcoin as well. Gold also is known to move at the U.S. premarket hours (8:30 am EST), and the actual NYSE opens at 9:30 am EST. Picking one’s battles timed to suggested hours in the first chart of this publication allows for risk minimization. Consequently, it provides a scheduled trading routine versus the risk of struggling to pay 24/7 attention and deal with a lot of price noise and fatigue risk.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|March 16th, 2021|Tags: Bitcoin, Bitcoin correction, Bitcoin mining, crypto analysis, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

Resting on Friday, surging on Monday. Feeble downswing attempt defeated right after the open, and then just bullish price action. Retail data today, and another FOMC meeting tomorrow – I view the former as not too likely to spoil today‘s market action. About the latter, remembering the latest reactions to Powell pronouncements, I look for the markets to be affected to a much greater degree.Don‘t look for material surprises, or be spooked by bets on the Fed tightening through dot plot adjustment or other forward guidance tools.I expect no change from what I wrote yesterday:(…) Who could be surprised, given the modern monetary theory ruling the economic landscape? The Fed amply accomodative, one $1.9T stimulus bill just in, and a $2T infrastructure one in the making. That‘s after the prior Trump stimulus, and who would have forgotten how it all started in April 2020? The old congressional saying „a billion here, a billion there, and pretty soon you‘re talking real money“, needs updating.Global liquidity isn‘t retreating exactly, emerging markets are building a solid base regardless of the dollar going higher two days in a row, and emerging market bonds are fighting to recover just as much as long-dated Treasuries. Coupled with the sectoral analysis, this is conducive for the unfolding stock market upswing and for commodities as well. We‘re still in a constructive environment for both, and I look within the latter at especially copper, nickel and iron to do well. Meanwhile, the precious metals upswing is going fine, and the miners keep outperforming – both gold and silver ones. The time for the bulls isn‘t running out, and the real battles will come once the gold bulls conquer the volume profile thin zone around $1,760. Will the bulls reach it on tomorrow‘s Fed underplaying the threat of inflation and showing tolerance to its overshoot? That‘s certainly one of the possibilities.The best course of action is to keep a pretty close eye on the metals – no bullish / bearish change from Thursday‘s words:(…) At the moment, evaluating the strength and internals of precious metals rebound, is the way to go as we might very well have seen the gold bottom, with the timid $1,670 zone test being all the bears could muster. Time and my dutiful reporting will tell.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe S&P 500 upswing is ready to proceed further now, and slight volume hint tells me to look for higher prices today. Credit MarketsHigh yield corporate bonds (HYG ETF) continue trading in a weak pattern, which however hasn‘t been able to force the stock market down. And not that I looked at it to have a chance to. I continue to view the junk corporate bond market as under pressure in sympathy with investment grade corporate bonds and long-dated Treasuries, which scored modest gains yesterday too. It‘s a euphoric rush into stocks simply. VolatilityThe volatility index shows no signs of panic returning, and the put/call ratio is getting very complacent again. Doesn‘t look like the boat will capsize today really.Value Stocks and TechValue stocks (VTV ETF) repelled a daily downswing attempt, which is positive considering that technology (XLK ETF) rose more strongly. The leadership in the stock market advance is broadening, and that‘s good news for the bulls.Gold Upswing AnatomyGold added modestly to its recent gains, and would do well to clear the $1,730 area some more really. The low volume is a sign that current prices aren‘t attracting enough interest to step in, and either buy or sell. Given the below chart though, the initiative is still within the bulls.It‘s that the miners keep outperforming gold without really slowing down, and that‘s still what I like to see well before the upswing makes an intermediate top. The daily indicators remain far from extended. Will the bulls take advantage accordingly?Silver, Copper and OilSilver is consolidating and by no means outperforming, as it so often does at the very late stage of precious metals upswings. The deductive conclusion is that the days of the upswing aren‘t likely over just yet.Both copper and oil are consolidating within their bullish patterns, and today‘s downswing taking both down around 1.5% from yesterday‘s prices shown above, is taking them nearer to where I would increase weighting. Yes, I‘m bullish stocks and commodities still, and look for precious metals to be gradually joining in some more.SummaryAfter the brief consolidation of S&P 500 gains, we‘re again in the full upswing mode, and the credit markets aren‘t a show stopper. The stock market bull is alive and well, and deeper correction has been yet again delegated to the dustbin. The top is very far off as this still nascent recovery gets so much stimulus fuel that overheating becomes a very real possibility this year already.Gold keeps turning an important corner on, but the bulls could get more comfortable only with an upswing that clears the $1,730 zone now, given the strong performance mining indices are showing. Adding to that even more decreased sensitivity to rising yields would compound the pleasant sight for the bulls. The runup to tomorrow‘s Fed will be telling.

The ECB accelerated its asset purchases, but unless the Fed follows suit, gold may continue its bearish trend.On Thursday (Mar. 11), the European Central Bank decided to accelerate its asset buying under the Pandemic Emergency Purchase Program :Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year.The decision came after a rise in the European bond yields that has mirrored a similar move in the U.S. Treasuries (see the chart below). Christine Lagarde , the ECB President, was afraid that increasing borrowing costs could hamper the economic recovery, so she decided to talk down the bond yields.Indeed, the growth forecasts for the EU have deteriorated recently amid the persistence of the pandemic and painfully slow rollout of the vaccines. According to the ECB, the real GDP of the bloc is likely to contract again in the first quarter of the year. So, the increase in the market interest rates could additionally drag down the already fragile economic recovery:Market interest rates have increased since the start of the year, which poses a risk to wider financing conditions. Banks use risk-free interest rates and sovereign bond yields as key references for determining credit conditions. If sizeable and persistent, increases in these market interest rates, when left unchecked, could translate into a premature tightening of financing conditions for all sectors of the economy. This is undesirable at a time when preserving favourable financing conditions still remains necessary to reduce uncertainty and bolster confidence, thereby underpinning economic activity and safeguarding medium-term price stability.Implications for GoldWhat does this all mean for gold prices? Well, the ECB’s move should prove rather negative for the price of gold , at least initially. This is because the loosening of the European monetary policy could weaken both the euro and gold against the U.S. dollar. Indeed, as the chart below shows, although the price of gold increased on Thursday, it declined one day later.Moreover, the acceleration in the ECB’s quantitative easing could further widen the divergence in the interest rates (that started rising in the third quarter of 2020, as one can see in the chart below) between the U.S. and the EU, which should also support the greenback at the expense of the yellow metal.On the other hand, the fact that the ECB has intervened in the markets – announcing acceleration in the pace of its asset buying program, after a certain rebound in the bond yields – could turn out to be positive for gold prices, at least in the long-run. This is because it shows how fragile the modern economies are and how dependent they have become on cheap borrowing guaranteed by the central banks.As I noticed earlier in the past, we are in the debt trap – and the central banks will not allow for the true normalization of the interest rates. The latest ECB’s action is the best confirmation that suppression of the real interest rates will continue, thus supporting gold prices. After all, the ECB has effectively put a cap on bond yields, introducing an informal yield curve control.So far, only the ECB has intervened in the markets, but other central banks could follow suit. This week, the Fed will announce its decision on the monetary policy. And we cannot exclude that the American central bank will also signal a more dovish stance to calm the turmoil in the bond markets and prevent further increases in the interest rates. One thing is certain: gold needs some fresh dovish hints from the Fed to go up. Unless the Fed further eases its stance, I’m afraid that gold will continue its bearish trend .If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care

XAUUSD builds support for a comebackA weaker US dollar has offered gold the opportunity to make a comeback just ahead of the Fed meeting later today.After having established a base at the round number 1700 the precious metal is struggling to clear the resistance at 1740, which coincides with the 20-day moving average. A neutral RSI suggests there is still room on the upside and a bullish breakout could add an extra $20 to the ounce (1760).However, in the case of a retreat below 1700, the price action is likely to go sideways and test the previous support at 1675.USDCAD capped by the falling trendlineThe Canadian dollar rises further as improvements in the domestic economy may lead the central bank to cut back on its QE.The bearish trendline from March 2020 has so far contained the US dollar’s multiple rebounds. The break below 1.2470 has confirmed that sellers are still in control.As the RSI dipped into the oversold area, short-term traders may take profit and cause a brief bounce. The zone between the psychological level of 1.2600 and the trendline is where strong selling interests would be.EURJPY tumbles to the trendlineThe euro took a hit after the suspension of the AstraZeneca shots caused a hiatus in the vaccine campaign across the continent.A diverging RSI in the overbought zone suggests an overextension and a loss in the bullish momentum. The pair is testing the rising trendline as the RSI goes into oversold. A failure to bounce back could send the price to the 20-day moving average (128.85).On the upside, 130.40 may keep a lid on the price action for the next few days.

Prepare yourself. March Madness could be here. No, I’m not talking about the college basketball tourney either.Stocks will be hanging onto Jay Powell’s every word and every breath on Wednesday (Mar. 17) and scrutinize his thoughts on interest rates and inflation.Pretty much, we’re the Fed’s hostages until this thing gets some clarity. Even if Powell says nothing, the markets will move. That’s just how it’s going to work.Rick Rieder, BlackRock’s CIO for global fixed income, echoed this statement. “I think the last press conference, I think I watched with one eye and listened with one ear. This one I’m going to be tuned in to every word and the markets are going to be tuned in to every word. If he says nothing, it will move markets. If he says a lot, it will move markets.”Jay Powell is the biggest market mover in the game now. What’s coronavirus anymore?So far, it’s been a relatively tame week for the indices. The Nasdaq’s continued playing catch-up and has outperformed, while the Dow and S&P are still hovering around record highs.The wheels are in motion for pent-up consumer spending and a strong stock rally. Plus, we have that $1.9 trillion stimulus package heating up the economy and an army of retail traders with an extra $1,400 to play with.Inflation fears and surging bond yields are still a concern and have caused significant volatility for growth stocks. But let’s have a little perspective here. Plus, jobless claims beat estimates again and came in at 712,000. This is nearly the lowest they’ve been in a whole year. Last week’s inflation data also came in more tamer than expected.But bonds yields still remain the market’s biggest wild card. Yes, yields are still at a historically low level, and the Fed Funds Rate remains 0%. But depending on how things go around 2 pm Wednesday (Mar. 17), yields could potentially pop again, reinvigorating the rotation into value and cyclical plays and out of tech and growth plays.Time will tell what happens.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. The market has to figure itself out. A further downturn is possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen any time soon.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Russell 2000- Lessons LearnedFigure 1- iShares Russell 2000 ETF (IWM)The Russell 2000 was the biggest laggard on Tuesday (Mar. 16). I think I’m starting to figure this index out, though, for a solid entry point.I have been kicking myself for not calling BUY on the Russell after seeing a minor downturn when the markets got rocked in the second half of February. I may have broken my own rule about “not timing the market” also. I’ve wanted to buy the Russell 2000 badly forever but never thought it dipped hard enough (whenever it did). I was waiting for it to at least approach a correction.But I think I figured out a pattern now. Notice what happened with the Russell almost every time it touched or minorly declined below its 50-day moving average. It reversed. Look at the above chart. Excluding the large crash and subsequent recovery in late-March and April 2020, 5 out of the last 6 times the Russell did this with its 50-day, it saw a sharp reversal. The only time it didn’t was in October 2020, when the distance between its 50-day and its 200-day moving average was a lot more narrow.Now, look at the index. As tracked by iShares Russell 2000 ETF (IWM) , its rally since November and year-to-date have been mind-blowing. Pretty much, this is the one reason why I’m more cautious about buying the index.Since the market’s close on October 30, the IWM has gained about 51.04% and more than doubled ETFs’ returns tracking the more major indices.Not to mention, year-to-date, it’s already up 19.12% and around at an all-time high.With that $1.9 trillion stimulus package set to greatly benefit small businesses, the Russell 2000 could pop even more.Unfortunately, I’m keeping this a HOLD. But I am monitoring the Russell 2000 closely.Aggressive stimulus, friendly policies, and a reopening world bode well for small-caps in 2021. I think this is something you have to consider for the Russell 2000 and maybe overpay for. The next time the index approaches its 50-day moving average, I will be a little more aggressive.For more of my thoughts on the market, such as tech, if small-caps are buyable, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Barely visible, but still a red candle – does yesterday mark a turning point? Even the volatility index refused to decline further on the day, and the option traders increased their put allocations. Is this a real reason to be cautious, or it represents mere window dressing before the Fed?When it comes to the sectoral view, not much has really changed in the S&P 500. Technology rose yesterday but gave up all intraday gains. Value stocks appear ready for a breather, and financials, energy and industrials all declined. That doesn‘t bode extraordinarily well for today‘s session, but this is not the place to look at when it comes to trading today‘s markets.It‘s the long-term Treasuries that I am focused on the most. Still as extended as lately ever relative to their 50-day moving average, they‘re weighing heavily on the markets. Stocks have gotten used to their message of rising inflation and economic recovery as we‘re still in the reflation phase, and not in the inflation one – but it‘s the precious metals that are suffering here, showing best in the copper to 10y Treasury yield ratio.I am not looking for the Fed to act today by adjusting its forward guidance stance or language, or taking a U-turn on inflation. No, they‘ll maintain the transitory stance even though markets are transitioning to a higher inflation environment already. The Fed won‘t do much this time.My prior Monday‘s words ring true also today:(…) Inflation expectations are rising, but not galloping yet. What to make of the rising rates then? They‘re up for all the good reasons – the economy is growing strongly after the Q4 corona restrictions (I actually expect not the conservative 5% Q1 GDP growth, but over 8% at least) while inflation expectations are lagging behind. In other words, the reflation (of economic growth) is working and hasn‘t turned into inflation (rising or roughly stable inflation expectations while the economy‘s growth is slowing down). We‘re more than a few quarters from that – I fully expect really biting inflation (supported by overheating in the job market) to be an 2022-3 affair. As regards S&P 500 sectors, would you really expect financials and energy do as greatly as they do if the prospects were darkening?So, I am looking for stocks to do rather well as they are absorbing the rising nominal rates. And this still translates into yesterday‘s throughts:(…) Global liquidity isn‘t retreating exactly, emerging markets are building a solid base regardless of the dollar going higher two days in a row, and emerging market bonds are fighting to recover just as much as long-dated Treasuries. Coupled with the sectoral analysis, this is conducive for the unfolding stock market upswing and for commodities as well. We‘re still in a constructive environment for both, and I look within the latter at especially copper, nickel and iron to do well. For gold, the key question remains whether copper upswings will outpace any yield increases on the long end, which have moderated their increases in Mar compared to Feb. That‘s good but not nearly enough given that even gold afficionados have come to expect lower prices lately quite en masse. Sign of capitulation off which the upswing was born? Yes, and the key questions now are whether we‘re seeing a pause, or a top in the upswing, and whether the next selling pressure would break below the $1,670 zone or not – see my early March game plan. The volume profile thin zone around $1,760 appears out of reach for now, without a Fed catalyst. I don‘t look for the central bank to invite any speculation on when the next rate hike might come (forget Brazil‘s example). They might not even talk about bringing down rates at the long end through a twist program. I certainly don‘t look for clues as to increasing the $120bn monthly pace of monetary injections. Unless the market perceives the Fed as underplaying the threat of inflation and showing tolerance to its palpable overshoot, the overall mix of positions and conference statements might bring gold under renewed pressure as it meanders a little below $1,730 as we speak.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe S&P 500 upswing took another daily breather yesterday in the end, and the volume doesn‘t send clear signals either way. Consolidation followed by new highs appears though the most likely scenario.Credit MarketsAfter quite some time, stocks are trading at very elevated levels relative to the high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio. Now, it‘s three days in a row that the latter doesn‘t confirm the stock market upswing. The bulls better be cautious here over at least a few sessions as the latest historical evidence shows that Fed pronouncements haven‘t been accompanied by fully risk-on moves exactly.Let‘s not forget the big picture, and that‘s of the stock market rising at the expense of debt instruments. Please note how little has the early Mar correction achieved in denting the S&P 500 appeal. The stock market bull is alive and well, very well actually.Gold in the StraitsGold still remains resilient to rising yields, but its inability to rally convincingly is worrying for the bulls. After all, this $1,730 zone shouldn‘t have been any real obstacle after three days of the rally, yet the yellow metal had to rise from the dead on Friday to fight another day. And given that it hasn‘t progressed since, it makes me think the bulls are hanging around for a remotely possible Fed surprise only.It‘s only the miners that are kind of still positive here. Yet, even their upswing was challenged yesterday, but that was on low volume. And that‘s constructive for the bulls when it comes to interpreting yesterday‘s events.The lack of silver outperformance before the sellers take over, is another sign why the upswing might not be over just yet. Still, these are just secondary clues, for nothing is more bullish than rising prices, which is what we obviously haven‘t seen in the metals much really.Key Ratio SpeaksWhile not tracking each other as closely as lately, the copper to 10y Treasury yield is sending an ominous signal still. The key question is whether long-dated Treasuries rise, or gold falls – I am not looking for copper to deviate from the current steeply rising trajectory much.SummaryS&P 500 is again entering daily consolidation mode, justifying my decision to take some of the prior profits off the table earlier today. While the Fed won‘t likely deliver real surprises later today, the credit markets are flashing warning signs more noticeably than yesterday. Still, the stock market bull is very far from making a top.Gold is being increasingly more challenged and stuck in the $1,730 zone, instead of clearing it.The yellow metal awaits today‘s Fed pronouncements, and barring a dovish(ly perceived) surprise, it looks ready to give up a portion of recent gains. All eyes on long-term Treasuries remains the battle cry.

Gold’s volatile little brother had an interesting run thus far, with internet forums buoying its price. But will fundamentals prevail? Where is silver headed?“The Ides of March are come,” said Caesar. “Aye Caesar; but not gone,” replied the soothsayer. The Ides of March quotation is often bandied about in financial articles midway through the month. Caesar was assassinated on March 15 th in 44BC (or BCE), at a meeting of the Roman Senate. Written about by Plutarch and further popularized by Shakespeare (who dramatized the event), the day has been used as a harbinger of ill fortune. So, if we’re to look at silver, should we be concerned about anything at this time?Silver is moving similarly to what we saw in the second half of 2019 and early 2020, before the huge slide. I marked the very broad tops that followed a quick rally in the red-shaded rectangles, and I also created solid-line red rectangles based on the last two – normal – tops and the initial decline that followed them.Based on the sudden increase in silver’s popularity, it spiked 1.5 months ago, but this move to new highs was quickly invalidated. The nature of this move was more or less random – it didn’t stem from a change in fundamentals or from a specific technical pattern , but rather from a sudden growth of interest in silver based on forum posts. Because of that, and because this upswing was quickly invalidated, this quick upswing didn’t really break the self-similarity pattern .Right now, we see a corrective upswing between – approximately - the 50- and 200-day moving averages (marked with blue and red). This upswing corresponds to the corrective upswing in gold and mining stocks (which allowed us to profitably go long in case of the latter). We saw – approximately – the same thing about 12 months ago, right before the huge slide.And speaking of time, please note that the final corrective upswing of early 2020 took place in very late February and early March, while the two – normal – tops that created the red-line rectangle formed more or less at the turn of the year and in late February. This year, it’s all taking place at almost exactly the same time of the year.If this self-similar pattern is indeed materializing, then the implications are very bearish, and we can expect a major downturn any day or week now.Let’s be realistic - so far, the analogy might seem too unclear to be viewed as a reliable base for making a silver forecast .But what if… What if there was a very similar pattern in the past that also preceded a massive decline? This would greatly increase the reliability of the above self-similarity.There was indeed such a pattern!That’s what silver did in 2008 before it declined.The August 2007 – March 2008 rally (please note the interim top in November 2007 that was followed by a zigzag decline, more or less in the middle of the rally) is similar to the March 2020 – August 2021 rally (please note the interim top in June 2020 that was followed by a zigzag pattern, more or less in the middle of the rally).Afterwards, we saw a double top in both cases that was followed by a sizable slide. Then silver formed a specific U-shaped broad top, where the final top was below the initial one (exception: in this case the forum-based rally took silver slightly above the previous high, but due to the specific / random nature of the move, it “doesn’t count” as something that invalidates the analogy).After the top, silver declined, and the final corrective upswing took place approximately between the 50- and 200-day moving averages.Please note that in both previous (2008 and 2020) cases silver then truly plunged, and it kept on declining until it moved below the 2.618 Fibonacci extension based on the initial downswing. The above charts illustrate that by showing the first decline at the 38.2% retracement (1 / 0.382 = approximately 2.618). Applying the same to the current situation (the initial decline took silver from below $30 to below $24) provides us with the minimum decline target at about $13.50. Will silver really decline as low? In my view, it’s imperative to watch other markets for indications as they might have more reliable targets (for instance gold), but I wouldn’t say that this target (or lower price levels) is out of the question. Of course, that’s just on a temporary basis – silver will likely soar in the following months and years (after this decline).Before summarizing, please note silver’s tendency to decline sharply in March – that’s what happened in 2008 and 2020. Even if the entire self-similar pattern doesn’t continue, based on this seasonality, silver is likely to decline soon, anyway.Summing up, if the similarity to what happened in 2020 and 2008 is upheld, then it seems that we’re about to see a big decline in the price of the white metal . Naturally, that’s not the only reason to expect silver’s weakness in the following weeks and months (not necessarily days) – you will find other reasons in my previous analyses .Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

NAS 100 challenges key resistanceFOMC officials’ pledge to keep the monetary policy accommodative has pumped up the appetite for risk assets. After reaching near the March high of 13330, the tech index saw profit-taking as the RSI shot into the overbought zone.The price has bounced off the demand zone around 12900. As the bullish sentiment makes its return after the recent correction, a neutral low RSI could prompt bargain hunters to get onboard.A rally above the previous high may extend the recovery towards 13700.AUDUSD breaks above the consolidation rangeA fall in Australia’s unemployment rate has confirmed the country’s strong fundamentals and put the Aussie back on track. After hitting the supply area around 0.7800, the price action has previously gone sideways for the lack of a catalyst.An oversold RSI indicator has raised traders’ interest to buy the dip at the psychological level of 0.7700. A rally back above 0.7835 could resume the medium-term uptrend.In the case of a pullback, the area between 0.7670 and 0.7700 would see strong buying interests.NZDUSD attempts a U-turnDespite a worse-than-expected GDP, the kiwi rallied on the back of a dovish US Federal Reserve. Having established support at 0.7100 on the daily chart, the pair is gathering momentum for the next round of rally.A low RSI suggests there is plenty of room on the upside, though the price action will first need to clear the origin of the latest sell-off at 0.7270.That would pave the way for a rise above 0.7300. The reversal would gain traction as long as the pair stays above the immediate support at 0.7150.

Fed messaging was rightfully interpreted as dovish – full employment is in effect its single mandate now. Yes, the central bank will tolerate higher inflation, and has prepped the markets for its advent (as if these didn‘t know already). Powell managed to walk the fine line between economic optimism, pushback on the idea of raising rates or taper, and yet implicitly acknowledged the growing liquidity concerns with one little, gentle prod. Markets naturally liked the tone, overlooking no mention of action on rising yields, and stocks, metals and commodities turned positive on the day – quite strongly so. The dollar declined visibly as long-term Treasuries recovered intraday losses on high volume. Highly charged finish to the day, but today‘s analysis will show that little has actually changed in its internals. Rates are rising for the good reason of improving economy and its outlook, reflation (economic growth rising faster than inflation and inflation expectations) hasn‘t given way to all out inflation, and stocks with commodities remain in a secular bull market. We‘re in the decade of real assets outperforming paper ones, but that will become apparent only much later into the 2020s.So, the central bank confirmed my yesterday‘s assessment of its tone and Treasuries take:(…) I am not looking for the Fed to act today by adjusting its forward guidance stance or language, or taking a U-turn on inflation. No, they‘ll maintain the transitory stance even though markets are transitioning to a higher inflation environment already. The Fed won‘t do much this time.They might not even talk about bringing down rates at the long end through a twist program. I certainly don‘t look for clues as to increasing the $120bn monthly pace of monetary injections. Unless the market perceives the Fed as underplaying the threat of inflation and showing tolerance to its palpable overshoot, the overall mix of positions and conference statements might bring gold under renewed pressure as it meanders a little below $1,730 as we speak.Long-term Treasuries … are weighing heavily on the markets. Stocks have gotten used to their message of rising inflation and economic recovery... – but it‘s the precious metals that are suffering here, showing best in the copper to 10y Treasury yield ratio.For gold, the key question remains whether copper upswings will outpace any yield increases on the long end, which have moderated their increases in Mar compared to Feb. That‘s good but not nearly enough given that even gold afficionados have come to expect lower prices lately quite en masse. Sign of capitulation off which the upswing was born? Yes, and the key questions now are whether we‘re seeing a pause, or a top in the upswing, and whether the next selling pressure would break below the $1,670 zone or not – see my early March game plan. The volume profile thin zone around $1,760 appears out of reach for now, without a Fed catalyst.And while we got a good confidence building one yesterday, I don‘t see it as strong enough to power precious metals higher immediately. It‘s nice that gold is decoupling from the rising yields but I view its upswing as demanding on current and future patience. Gold miners are still showing the way, and will be a key barometer in telling whether today‘s premarket downswing in antidollar, risk-on plays is a meaningful turn or not. For now, the renewed long-term Treasury yield increases (and tech selloff to a degree) point to reemergence of lingering Fed doubts.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe upper knot in the S&P 500 upswing spells short-term caution. The chart posture would be stronger without it, but at the same time, the volume and candle itself aren‘t ones of reversal. The most likely outcome of upcoming sessions still appears as resumption of the prior grind higher, which is in line with my yesterday‘s message of consolidation followed by new highs as the most likely scenario.Credit MarketsThe long upper knot in the high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio shows that the bond market isn‘t on board with the Fed – at a time when stocks aren‘t panicking in the least. Given the big picture in the economy and the combo of monetary and fiscal policy initiatives, I look for this to be a storm in the tea cup when it comes to (higher future) stock prices, and I am keenly on the lookout for possible deterioration in the corporate bond markets as relates to the S&P 500.Technology and ValueThe tech upswing wasn‘t really convincing, but it‘s been value stocks‘ turn to drive higher S&P 500 prices. No change in dynamic here. It‘s however the relation to not as strong Russell 2000 or emerging markets yesterday that hints at headwinds in stocks for today. A play on patience, again.Inflation ExpectationsYesterday‘s Fed message gave no reason for these to decline, and prior uptrend continues unabated. Bond yields haven‘t though frontrunned them yesterday, which I however look to see changed today.Precious MetalsThe gold ETF formed a bullish candle, tracking the rising miners well. But likewise to the HYG:SHY ratio‘s upper knot message, this one is concerning as well. The key question is about the staying power of GDX outperformance – the key argument for the gold market character having changed with the Mar 08 bottom, which might very well be THE bottom, and not a local one. The decoupling of the yellow metal from rising yields is even more visible now than when I first showed you the weekly $GOLD - TLT overlay chart two weeks ago.Platinum goes down while the copper engine runs (and silver did join in yesterday). This chart sends a message of short-term indecision extending to other commodities, including oil. SummaryS&P 500 is in my view merely testing the buyers‘ resolve, and doesn‘t want to turn the consolidation on declining VIX into a rush to the exit door. Despite the surprisingly early turn against the Fed day move, this doesn‘t represent a trend change or arrival of the dreaded steep correction. The stock market bull is very far from making a top.Gold is again under pressure today, back in the $1,730 zone instead of having cleared it. Understandable given the dollar and Treasuries reversal of yesterday‘s Fed moves, but not rushing to the downside head over heels.

GBPUSD builds bullish momentumThe Bank of England followed the US Fed’s dovish footstep on Thursday in an attempt to rein in inflation expectations. This has led the pound to hit a wall once again at the psychological level of 1.4000.Those who believe in the third time’s a charm may find support at 1.3850 after the pair made a series of higher lows.A bullish breakout could push the price towards 1.4150 or even end the three-week-long consolidation. A drop below 1.3800, however, may dent the upward bias from a medium-term perspective.USDJPY in rectangle consolidationRally in risk assets come at the expense of a safer Japanese yen. Though the BoJ would sit on its hands and find no issue in a weaker currency as global trade makes a comeback.The US dollar has so far found support above the previous lows around 108.30. The RSI has dropped back into neutral territory from an overbought situation, which may prompt more buyers to get in the game.A breakout above the horizontal range (109.30) could extend the rally to last June’s high at 109.80.XAGUSD bounces off ascending trendlineA softer US dollar is exactly what commodity traders have been waiting for. Silver is looking to safeguard its gains after the latest pop above the resistance at 26.40.An over-extended RSI was followed up by profit-taking in the supply area. However, a nascent rising trendline hints at buyers’ strong interest in bidding up the price.A reversal is in the making if the price action succeeds in staying above 25.80.A bullish breakout above 26.90 could trigger a broader rally into the 28s.

March Madness started on Thursday (Mar. 18), but stocks got the jump on their own brackets this week. Let’s dive in.Although Wednesday (Mar. 17) saw the indices have a nice St. Patrick’s day green reversal thanks to Jay Powell babying us on inflation thoughts again, Mr. Market isn't stupid. Manic, but not stupid. We saw a return to the strong rotation trend out of growth stocks the day after Powell's testimony (Mar. 18).Thursday (Mar. 18) saw bond yields surge to their highest levels in what seems like forever. The 10-year yield popped 11 basis points to 1.75% for the first time since January 2020, while the 30-year rate climbed 6 basis points and breached 2.5% for the first time since August 2019.Predictably, the Nasdaq tanked by over 3% for its worst session in 3-weeks.Jay Powell and bond yields are the most significant market movers in the game now. Get ready for the market next week when he testifies to Congress. That'll be a beauty. What's coronavirus anymore?So after what's been a relatively tame week for the indices, we can officially say bye-bye to that.Bond yields, though, are still at historically low levels, and the Fed Funds Rate remains at 0%. With the Fed forecasting a successful economic recovery this year, with GDP growth of around 6.5% -- the fastest in nearly four decades -- the wheels could be in motion for another round of the Roaring '20s.The problem, though, is that the Great Depression came right after the first Roaring '20s.Many are sounding the alarm. However, like CNBC's Jim Cramer, others think the current headwinds are overblown, and a mirror of the 2015-2016 downturn is based on similar catalysts.Figure 1: Jim Cramer TwitterCramer argued that Powell is a talented central banker willing to "let the economy continue to gain strength so that everyone has a chance to do well."Nobody can predict the future, and these growth stock jitters from rising bond yields may be overblown. But for now, it's probably best to let the market figure itself out and be mindful of the headwinds.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:There is optimism but signs of concern. The market has to figure itself out. A further downturn is possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen any time soon.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Nasdaq- Another Buyable Dip?Figure 2- Nasdaq Composite Index $COMPThe last time I switched my Nasdaq call to a BUY on Feb 24 , that worked out very well. I will use the same criteria again for the Nasdaq as the market figures out bond yields: The RSI and the 13000 support level. I need the Nasdaq’s RSI to dip below 40 while also falling below 13000 before buying.We’re not quite there. This is an excellent dip, but it’s really only one down day and its worst down day in weeks. I think we may have some more buying opportunities next week if bond yields pop due to Jay Powell’s testimony. I mean, it seemingly always happens after he speaks.Pay very close attention to the index and its swings.If the tech sector takes another big dip, don’t get scared, don’t time the market, monitor the trends I mentioned and look for selective buying opportunities. If we hit my buying criteria, selectively look into high-quality companies and emerging disruptive sub-sectors such as cloud computing, e-commerce, and fintech.HOLD, and let the RSI and 13000-support level guide your Nasdaq decisions. See what happens over subsequent sessions, research emerging tech sectors and high-quality companies, and consider buying that next big dip.For an ETF that attempts to correlate with the performance of the NASDAQ directly, the Invesco QQQ ETF (QQQ) is a good option.For more of my thoughts on the market, such as a potentially overbought Dow Jones, small-caps, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Markets didn‘t buy into the Fed messaging, and quite a few moves were reversed. Stocks declined, commodities got under pressure, and oil took it on the chin. Long-dated Treasuries plunged again as the dollar reversed Wednesday‘s losses. Overall picture is one of nervousness as the Fed‘s statements and their consistency are getting a second look. Plus, triple witching can exaggerate today‘s trade swings, getting reversed in subsequent sessions too.The greatest adjustment is arguably in the inflation projections – what and when is the Fed going to do before inflation raises its ugly head in earnest. There is still time, but the market is transitioning to a higher inflation environment already nonetheless. In moments of uncertainty that hasn‘t yet turned into sell first, ask questions later, let‘s remember the big picture. Plenty of fiscal support is hitting the economy, the Fed is very accomodative, and all the modern monetary theory inspired actions risk overheating the economy later this year. As I wrote yesterday:(…) Rates are rising for the good reason of improving economy and its outlook, reflation (economic growth rising faster than inflation and inflation expectations) hasn‘t given way to all out inflation, and stocks with commodities remain in a secular bull market. We‘re in the decade of real assets outperforming paper ones, but that will become apparent only much later into the 2020s.The largely undisturbed rise in commodities got checked yesterday just as stocks did, but the higher timeframe trends (technical and fundamental drivers) hadn‘t changed, which will be apparent once the dust settles. As I‘ll lay out in today‘s analysis, the gold market is springing back to life, and the precious metals upswing rationale is still very much on the table, and the decoupling from rising nominal yields goes on – I view yesterday‘s selloff in the miners as partially equity markets driven.Bottom line, I made good decisions to subscribers‘ benefit by closing profitable stock market positions before the downswing hit, and not writing off gold.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookOrderly downswing yesterday that wouldn‘t stand out on the chart in a few weeks really. The only stunning thing about it is how soon after Wednesday‘s FOMC it came. Yet, this chart isn‘t sending signals of a key reversal just in.Credit MarketsThe non-confirmation in the high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio caught up with the 500-strong index yesterday. Is a new downtrend starting here? While high yield corporate bonds for the all the Treasuries market turmoil haven‘t arguably bottomed yet, the degree to which they can pull stocks down still, is an open question. Conversely, once HYG swings higher again, stocks would get on a firmer footing.Technology and ValueThe tech sold off again, and the interest-rate sensitive defensives (utilities, consumer staples and REITs) suffered yesterday. Yes, even the sharply recovering real estate sector did. Coupled with value stocks giving up intraday gains, the stock market internals have (not insurmountedly, but temporarily) deteriorated.Gold and SilverGold not following the declining TLT path is the most important green shoot within the market. The yellow metal held up very well in yesterday‘s selling pressure across the board, and not even gold miners (viewed through a $HUI overlay or $HUI:$GOLD ratio) gave up on the upswing – more downside price action in the latter would have to come today to cast real doubts.Weekly chart examination of essentially equivalent metrics (enriched with the key copper ingredient) shows clearly the PMs decoupling stage – silver cast off the shackles still in 2020 while gold is doing so now. It‘s still early on in the process, but invalidating excessively bearish targets – gold has the benefit of my doubt, until I call that one off. I don‘t think that would happen today.Crude OilThe one-way trip starting in Nov met its largest downswing yesterday, signifying we better get used to oil no longer moving in one direction only. Amid the reports of excess stockpiles and European lockdowns denting the demand, OPEC+ is keeping up with the production cuts, undermined largely by Iranian exports only. But look how little has the oil index ($XOI) declined – it‘s relative position shows the excessive nature of yesterday‘s move. In my view, oil would be rangebound once it bottoms, before breaking higher again. The world economy is improving, leading indicators are rising, and the only fly in the ointment are yields, and a stronger dollar pressuring emerging markets. The forces of reflation, liquidity and demand growth will outweigh this unfolding, temporary setback. SummaryS&P 500 is once again experiencing downswing, yet the VIX hasn‘t truly spiked – and neither has the put/call ratio. While there is no stampede to the exit door, the market internals have deteriorated, and may take more than a few sessions to get repaired. For one, tech is again in the driving seat.Gold has been quite resilient lately, and yesterday‘s developments also outside of the bonds arena are boding well for the $1,670 bottom hypothesis. Especially given the hints presented above, and that stock market weakness coupled with safe haven play attraction, might help here further.

Why we find Silver to be the number one hedge towards an uncertain future, an excellent investment to make stellar returns, and a simple way to protect your wealth is as follows:Precious metals have a history of perfect risk mitigation of a portfolioPrecious metals have an intrinsic tangible commodity value if held in physical formSilver is the underdog in its sector, needing to catch up with gold, providing for an additional edgeSilver is trending (now in a consolidation period – and within this consolidation strong – after a potent first trend leg up)Fundamental facts point overwhelmingly towards a strong Silver demandSilver is in the public eye, the news, creating demand in various investor and consumer classesActual proof of demand outweighing supply through the now consistently for a year divergence between spot and physical acquisition price for Silver (a 35% difference at the moment).Monthly Chart of Gold/Silver-Ratio, The turbo edge:Gold-Silver ratio, monthly chart as of March 18th, 2021.A look at the monthly chart of the Gold/Silver-Ratio above shows that historically price violations of the 40 moving average result in a move much more closer towards a median zone. Imbalance, principle-based, returning to balance. This, even with the most moderate early area of a 43.50 level (our studies show a reasonable likelihood of a value of 18), provides a turbo stack-able edge for a Silver purchase. These additional boosters for a higher likelihood of success of your investment make all the difference.  Silver in US-Dollar, Weekly Chart, A healthy trend:Silver in US-Dollar, weekly chart as of March 18th, 2021.The weekly chart of Silver shows that even though the last six months were one of consolidation for Silver prices, within that consolidation, there was consistent follow-through of strength for direction. You can make this out by eyeballing price within this sideways period (after the stellar advance from March 2020 to August 2020) creeping upward on the blue midline for the linear regression channel. Strong volume node price support at US$25 is now substantiated by holding through the Fed announcement this week. Consequently providing good support and low risk for more physical Silver acquisition.Weekly Chart, Silver in US-Dollar, Silver, simple and effective:Silver in US-Dollar, monthly chart as of March 18th, 2021.The last 50 years on a monthly Silver chart bring to light that Silver can move for substantial distances. These bull trends live above the 100-moving average. The bears have their upper hands below this average line. Silver jolted out of a six-year bear range cycle far above the 100-moving average. Consequently, probability is now on the side for Silver investors. That with quite some upside potential for the long run. We feel confident that Silver sees new all-time highs in the not-so-distant future and most likely three-digit figures not too far out as well.Silver, simple and effective:A mistake here and there is human. If you miss an entry once in a while, that’s fine. But right now, we see a tendency of hope replacing sound wealth preservation strategy. A typical move of the subconscious when exposed for too long to a stressful situation. A hopeful mindset is not a good point of origin for investing. Emotional states aren’t the best investment advisors. The future is far from clear may this be fiscal or monetary, political or economical. A simple and effective way right now is what is needed to get grounded. Consequently, finding oneself on an emotionally sound foundation to operate from.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|March 18th, 2021|Tags: Gold, low risk, Silver, silver bull, Silver Chartbook, technical analysis, time frame, trading principles|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

I have received numerous emails and questions regarding the market's set up and what to expect after the Triple-Witching event (FOMC, Futures/Options expiration) last week.  It appears many traders/investors are seeking some clarity related to price trends and the potential opportunities that are setting up in the US markets right now.  In this research article, my research team and I provide some greater detail related to what we believe is likely to happen over the next 5 to 8+ weeks.Our recent Gann/Fibonacci research article drew quite a bit of attention from readers.  Their biggest concern was that we were suggesting a major peak in the markets could setup in early April 2021.  We want to be clear about this longer term market setup to make sure our readers and followers fully understand the implications of this technical pattern. A peak/top could start to setup anytime after April 1, 2021, based on the Gann/Fibonacci research we've completed.  But, that peak/top setup could also happen anytime between April 2021 and August 2021 (or slightly later).  Timing this pattern is not something we can accomplish very easily as the range of dates where this Gann/Fibonacci inflection level exists consists of about 5+ months.  The one key factor we continued to stress in that article was to “watch for a technical breakdown in price above the $379 to $380 price level on the SPY”.  Many readers may be able to comprehend what we are trying to say by this statement, but we'll try to help clarify it by showing what it would look like on a price chart.Back in November 2020, we published a research article about how to spot an Excess Phase Top and the 5 unique phases that take place when this type of top executes.  You can read this article here: www.thetechnicaltraders.com/how-to-spot-the-end-of-an-excess-phase-part-ii/.  It is important to understand how capital continues to seek out opportunities within any market trend and how the current shift away from the NASDAQ and into the Dow Jones, Russell 2000 and other various sectors has started to shift the way the markets are reacting right now.  We are seeing more weakness in the Technology and Internet sector now than we've seen in almost a decade.  This could be setting up the first technical patterns of an Excess Phase Top already.Monthly NQ Chart Shows Excess Phase Top May Already Have StartedThe following Monthly NASDAQ chart highlights the five unique stages of an Excess Phase Peak and shows the recent weakness in the NASDAQ price trend may have already started the Phase B (Price Flagging) stage.  Within this phase, price trends moderately higher for many weeks as weakness in the bullish price trend sets up a “rollover” type of peak.  Obviously, the previous excess phase rally is stalling and traders are not yet fully aware of the risks that may continue to be present if this pattern persists.  This Phase C (Breakdown of the Flagging pattern) would prompt a move to intermediate support, which will likely become the Critical support level in the NQ that may prompt the bigger Breakdown event(See the “D” setup).So, what would price activity look like if our research is correct?  How does this translate into opportunity for traders/investors right now and what should they look for in the future?Expect Many Weeks of Flagging In The NQLet's focus on the Weekly NQ Futures chart, below, and how the price has already set up into a potential sideways Bullish Flagging trend.  The first thing we want you to focus on is the broken YELLOW bullish trend line.  We would expect any continued sideways Flagging trend to trade within the CYAN price channels we've drawn on this chart.  If this happens, we should continue to expect some moderate upside price trending throughout the sideways Flagging price channel before a bigger breakdown in price happens (as we've drawn in MAGENTA).  This is why traders and investors need to fully understand the scope of our Gann/Fibonacci research article and to understand this setup may last into July/August of 2021 before finally entering a deeper downside price trend.We profit from volatility by using non-directional options trading strategies so watch our webinar on How To Become An Options Strategy Master now!If our research is correct, the sideways Flagging trend will prompt a moderate upside price trend for many weeks (possibly 4 to 8+) before a moderate breakdown event will see price levels fall -12% to -16% - targeting #D (the critical support level).  At that point, the trend may firm up near support and begin a moderate upside price trend for many weeks or months; or we may see a technical price bounce near this level before a more immediate breakdown of price takes place.  Either way, the Breakdown Zone is where we would consider a “technical price failure” to have confirmed – validating our Gann/Fibonacci peak prediction.Currently, numerous sectors are generating new bullish trend triggers – many of which have already rallied 20 to 40% or more.  As we suggested earlier, the shift in how capital is being deployed in the markets has prompted various sectors,many of which have been overlooked over the past 12+ months,  to really begin to accelerate higher.  This is because the froth near the peak in the NASDAQ, as well as the new geopolitical landscape, has prompted traders/investors to shift focus into new opportunities in sectors they believe have continued growth opportunities.  For example, the Marijuana, Consumer Discretionary, Infrastructure and Real Estate sectors appear to be entering new bullish trends while the Technology, Healthcare, BioTech and Chip Manufacturers appear to be stalling.What this means for traders/investors is that there is still lots of opportunity to trade the best opportunities in the markets.  This is the focus of my BAN trading Strategy.  Until we see a confirmed technical breakdown in the major markets, various sectors continue to present very strong opportunities for skilled technical traders.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  Learning to profit from these bigger trends and sector rotation will make a big difference between success and failure.  We want to be clear, we are not calling for an April 1 peak in the markets based on our Gann/Fibonacci research.  We are suggesting that a bigger “topping” pattern is already setting up in the markets and skilled technical traders should already be preparing for underlying risks related to this technical pattern.  If you are not prepared for this, then please pay attention and learn from our research. You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.In Part II of this research article, we'll attempt to share more information about the Excess Phase Peak setup that may be setting up in the US markets and what to watch out for.  Additionally, we'll take a look at the Dow Jones Industrial chart to compare the NASDAQ setup to the INDU setup.  Where we are seeing weakness in the NASDAQ right now, the Dow Jones Industrial chart appears to show a much stronger price trend right now.Enjoy the rest of your weekend!!

AUDUSD tests key supportIn Australia’s worse-than-expected retail sales, traders saw not a reason to dump, but rather an opportunity to get in for cheap.After the RSI shot into the overbought territory post-FOMC, the indicator cooled off as the price came down to test the support at 0.7700.The subsequent rebound above 0.7770 was a sign that buyers are still in the business. 0.7850 is the intermediate resistance and its clearance could propel the Aussie above 0.79.On the downside, 0.7620 is the major daily support buyers should be aware of.GBPJPY tumbles after over-extensionThe BOJ’s tweak to widen the long-term rates cap to 0.25% from the previous 0.2% came off as a rate hike in disguise, sending the yen higher across the board.Technically speaking, the RSI’s bearish divergence was a warning on an overstretched rally. Zooming out on the daily chart an overbought RSI suggests a pullback towards the 20 or 30-day moving average (149.00).On the hourly chart, successive breaks below 151.30 then 150.80 have confirmed the turnaround. 151.80 is the resistance after the first round of sell-off.USDCAD breaks bearish momentumDespite an improvement in retail data, the Canadian dollar came under pressure as the price of oil tanked.The RSI divergence from last week indicated a loss of momentum in the sell-off. Then a breakout above the resistance at 1.2490 and a bullish MA cross have heightened the odds of a reversal.1.2570 is the next hurdle and a close above that level could trigger a new round of rally. In the case of a retracement, the demand zone between 1.2360 and 1.2460 may see strong buying interest.

Friday‘s session ended in a tie, but it‘s the bears who missed an opportunity to win. Markets however dialed back their doubting of the Fed, which has been apparent in the long-term Treasuries the most. One daily move doesn‘t make a trend change likely though, especially since the Mar pace of TLT decline is on par with Feb‘s and higher than in Jan. While Treasuries paused in early Mar, they‘re now once again as extended vs. their 50-day moving average as before.And that poses a challenge for interest rate sensitive stocks and to some degree also for tech - while I expect value to continue to lead over growth, technology would recover some of the lost ground on rates stabilization. And it‘s true that the $UST10Y move has been a very sharp one, more than tripling from the Aug 2020 lows.Inflation expectations are rising, and so is inflation – PPI under the hood thus far only. Financial assets are rising, perfectly reflected in (this month consolidating) commodity prices. Cost-driven inflation is in our immediate future, not one joined at the hip with job market pressures – that‘s waiting for 2022-3. The story of coming weeks and months is the stimulus avalanche hitting while the Fed still merrily ignores the bond market pressures.And stocks are going to like that – with tech participating, or at least not standing too much in the way, S&P 500 is primed to go to new highs rather shortly. Given the leadership baton being firmly in the hands of value, smallcaps are likely to outperform the 500-strong index over the coming weeks and months. The volatility index is confirming with its general downtrend, commodities, including oil, will be the 2021+ place to be in – just see how fast is Thursday‘s steep correction being reversed. I‘ll be covering black gold more often based on popular demand, so keep your questions and requests coming!The precious metals upswing goes on, and landed the yellow metal comfortably above $1,740. Not too spectacular, but the miners are still painting a bullish picture. I view the increasing appeal of the yellow metal (alongside the bullish sentiment hitting both Wall and Main Street) as part of the inflation trades, as decoupling from rising yields which increased really fast. As gold is arguably the first asset to move in advance of a key policy move, it might be sensing the Fed being forced (i.e. the markets betting against the Fed) to moderate its accomodative policy. Twist, taper – there are many ways short of raising the Fed funds rate that would help put pressure off the sliding long-dated Treasuries, not that these wouldn‘t be susceptible to move higher from oversold levels. And just like the yellow metal frontrunned the Fed before the repo crisis of autumn 2019, we might be seeing the same dynamic today as well.For the cynical and clairvoyant ones, we might sit here in 3-6 months over my notes on „the decoupling that wasn‘t“ - all because rates might snap back from the current almost 1.8% on the 10-year bond.For now, my Friday‘s words remain valid also today:(…) The greatest adjustment is arguably in the inflation projections – what and when is the Fed going to do before inflation raises its ugly head in earnest. There is still time, but the market is transitioning to a higher inflation environment already nonetheless. In moments of uncertainty that hasn‘t yet turned into sell first, ask questions later, let‘s remember the big picture. Plenty of fiscal support is hitting the economy, the Fed is very accomodative, and all the modern monetary theory inspired actions risk overheating the economy later this year. Rates are rising for the good reason of improving economy and its outlook, reflation (economic growth rising faster than inflation and inflation expectations) hasn‘t given way to all out inflation, and stocks with commodities remain in a secular bull market. We‘re in the decade of real assets outperforming paper ones, but that will become apparent only much later into the 2020s.The largely undisturbed rise in commodities got checked yesterday just as stocks did, but the higher timeframe trends (technical and fundamental drivers) hadn‘t changed, which will be apparent once the dust settles.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and InternalsFriday‘s session on understandably high volume and with some intraday volatility, closed with prices little changed. While the daily indicators are weakening, I see that as a temporary move that would be followed by higher highs in the index.Market breadth indicators are largely constructive, attesting to the broad base of the current S&P 500 advance. Even on little changed days such as Friday, both the advance-decline line and advance-decline volume have risen. I wouldn‘t be concerned with the weak new highs new lows here much as the sectoral structure remains positive – both technology (XLK ETF) and value stocks (VTV ETF) have rejected further intraday declines.Credit MarketsHigh yield corporate bonds have turned higher, and so did their ratio to short-dated Treasuries (HYG:SHY). This is a positive factor for further gains in stock prices.Smallcaps and Emerging MarketsThe Russell 2000 (IWM ETF) isn‘t flashing any warning signs, and continues performing as robustly as the 500-strong index. Given the stage of the bull market we‘re at, smallcaps can be expected to start outperforming at some point in the future, just the same way their underperformance was over since early Nov. As regards emerging markets, their base building accompanied with Friday‘s upswing when faced with rising yields and solid dollar, is encouraging.Gold and SilverThe gold upswing is progressing along, and the daily consolidation in the miners (GDX ETF) isn‘t an issue when compared to a stronger gold performance. Friday was also characterized by a bigger upswing in the junior miners (GDXJ ETF) than in the seniors (GDX ETF), which is positive. The overall impression is of GDX readying a breakout above late Jan and early Feb lows, which bodes well for the precious metals sector as such next – especially given that this decoupling is happening while nominal yields aren‘t truly retreating.Both silver and platinum continue their base building while copper, the key ingredient within the copper to Treasury yields ratio, keeps bullishly consolidating. Silver miners aren‘t sending signals of underperformance, which means that the precious metals upswing dynamics remain still healthy on a closing basis. As regards premarket silver weakness, putting it into context with other markets is key – thus far, it‘s the odd weak one, so I am not jumping to conclusions yet.SummaryS&P 500 trading was undecided on Friday, yet didn‘t bring any clues invalidating the bullish outlook. Volatility remains low, but the put/call ratio has risen, even without a corresponding downswing (or danger of seeing one). The Fed doubting induced pullback appears more than likely in its closing stages.Gold had another resilient week, and the precious metals upswing examination bodes well for the move higher to still continue. Miners are leading, and the yellow metal keeps breaking the spell of higher Treasury yields, supported by copper not yielding ground either.

Despite everyone saying the bottom is in, and that gold and miners are set for takeoff, the signs still point south. The real question: how low can they go?Let’s take a look at some price targets for where the GDX and GDXJ mining ETFs might land up.With the miners attempting to reclaim Pride Rock, it won’t be long until the GDX ETF is singing Hakuna Matata.Rising U.S. Treasury yields? No problem.A reinvigorated USD Index? Who cares.But while strength is often viewed through the eyes of the beholder, the GDX ETF is far from being The Lion King. Sure, its bravery in the face of familiar foes is reason for optimism. However, we’ve seen this movie before. While the recent rally may resemble Mufasa, beneath the surface, the GDX ETF’s tepid price action looks a lot like Simba.If you analyze the chart below, you can see that the GDX ETF moved to the upper level of my initial target range. However, with the Mar. 19 close eliciting a sell signal from the stochastic oscillator (the black and red lines at the bottom section of the chart), a historical reenactment (repeat of the early-2021 performance) could deliver another sharp move lower.In addition, the shape of the early-January swoon is eerily similar to today’s price action. Case in point: back in January, the GDX ETF enjoyed a material daily rally, consolidated , then sunk like a stone. Because of that, the recent move higher and a few days of back-and-forth trading ( consolidation ) is nothing to write home about.To explain, I wrote on Mar. 18:Mining stocks followed gold higher, and they moved to the upper part of my previous target area, but not yet to its upper border. As you may recall, I mentioned the possibility of GDX moving to the $34 - $35 area and my original target for this rally was slightly below $34.The GDX ETF now encountered the strongest combination of resistance areas, while the Stochastic indicator moved above the 80-level. Technically, the situation is now much more bearish in the GDX ETF chart than it was at the beginning of the year. Back in January, the GDX ETF was only at the declining blue resistance line.Now, in addition to being very close to the above-mentioned line it’s also at:The neck level of the previously broken broad head and shoulders patternThe 50-day moving averageThe previous (late-February) highs.Consequently, it’s highly likely that we’ve either just seen a top or one is close at hand.But if we’re headed for a GDX ETF cliff, how far could we fall?Well, while the S&P 500 is a key variable in the equation, there are three reasons why the GDX ETF might form an interim bottom at roughly ~$27.50 (assuming no big decline in the general stock market ):The GDX ETF previously bottomed at the 38.2% and 50.0% Fibonacci retracement levels. And with the 61.8% level next in line, the GDX ETF is likely to garner similar support.The GDX ETFs late-March 2020 high should also elicit buying pressure.If we copy the magnitude of the late-February/early-March decline and add it to the early-March bottom, it corresponds with the GDX ETF bottoming at roughly $27.50.Keep in mind though: the interim downside target is based on the assumption of a steady S&P 500 . If the stock market plunges, all bets are off. For context, when the S&P 500 plunged in March 2020, the GDX ETF fell below $17, and it took less than two weeks for it to move as low from $29.67. As a result, U.S. equities have the potential to make the miners’ forthcoming swoon all the more painful.If gold forms an interim bottom close to $1,600, this could also trigger a corrective upswing in the mining stocks, but it’s too early to say for sure whether that’s going to be the case or not.Also supporting the potential move, the GDX ETF’s head and shoulders pattern – marked by the shaded green boxes above – signals further weakness ahead.I wrote previously:Ever since the mid-September breakdown below the 50-day moving average , the GDX ETF was unable to trigger a substantial and lasting move above this MA. The times when the GDX was able to move above it were also the times when the biggest short-term declines started.(…)The most recent move higher only made the similarity of this shoulder portion of the bearish head-and-shoulders pattern to the left shoulder) bigger. This means that when the GDX breaks below the neck level of the pattern in a decisive way, the implications are likely to be extremely bearish for the next several weeks or months.Turning to the junior gold miners , the GDXJ ETF will likely be the worst performer during the upcoming swoon. Why so? Well, due to its strong correlation with the S&P 500, a swift correction of U.S. equities will likely sink the juniors in the process.What’s more, erratic signals from the MACD indicator epitomizes the GDXJ ETF’s heightened volatility.Please see below:To explain, I wrote on Mar. 12:The above chart is a big red warning flag for beginner investors . The flag reads: “verify the efficiency of a given tool on a given market, before applying it”.The bottom part of the above chart features the MACD indicator . Normally, when the indicator line (black) crosses its signal line (red), we have a signal. If it’s moves above the signal line, it’s a buy sign, and if it moves below it, it’s a sell sign.But.If one actually looks at what happened after the previous “buy signals” in the recent months, they will see that in 5 out of 6 cases, these “buy signals” practically marked the exact tops, thus being very effective sell signals! In the remaining case, it was a good indication that the easy part of the corrective upswing was over.I’m not only describing the above due to its educational value, but because we actually saw a “buy signal” from the MACD, which was quite likely really a sell signal.More importantly though, the MACD indicator is far from a light switch. While false buy signals often precede material drawdowns, the reversals don’t occur overnight. As a result, it’s perfectly normal for the GDXJ ETF to trade sideways or slightly higher for a few days before moving lower. This is what we saw last weekBut how low could the GDXJ ETF go?Well, just like the GDX ETF, the S&P 500 is an important variable . However, absent an equity rout, the juniors could form an interim bottom in the $34 to $36 range and if the stocks show strength, juniors could form the interim bottom higher, close to the $42.5 level. For context, the above-mentioned ranges coincide with the 50% and 61.8% Fibonacci retracement levels and the GDXJ ETF’s previous highs (including the late-March/early-April high in case of the lower target area). Thus, the S&P 500 will likely need to roll over for the weakness to persist beyond these levels.Some people (especially the permabulls that have been bullish on gold for all of 2021, suffering significant losses – directly and in missed opportunities) will say that the final bottom is already in. And this might very well be the case, but it seems highly unlikely to me. On a side note, please keep in mind that I’m neither a permabull nor a permabear for the precious metals sector, nor have I ever been. Let me emphasize that I’m currently bearish (for the time being), but earlier this month, we went long mining stocks on March 4 and exited this trade on March 11.Another reason (in addition to the myriads of signals coming not only from mining stocks, but from gold, silver, USD Index, stocks, their ratios, and many fundamental observations) is the situation in the Gold Miners Bullish Percent Index ($BPGDM), which is not yet at the levels that triggered a major reversal in the past. The Index is now back above 27. However, far from a medium-term bottom, the latest reading is still more than 17 points above the 2016 and 2020 lows.Back in 2016 (after the top), and in March 2020, the buying opportunity didn’t present itself until the $BPGDM was below 10.Thus, with sentiment still relatively elevated, it will take more negativity for the index to find the true bottom.The excessive bullishness was present at the 2016 top as well and it didn’t cause the situation to be any less bearish in reality. All markets periodically get ahead of themselves regardless of how bullish the long-term outlook really is. Then, they correct. If the upswing was significant, the correction is also quite often significant.Please note that back in 2016, there was an additional quick upswing before the slide and this additional upswing had caused the $BPGDM to move up once again for a few days. It then declined once again. We saw something similar also in the middle of 2020. In this case, the move up took the index once again to the 100 level, while in 2016 this wasn’t the case. But still, the similarity remains present.Back in 2016, when we saw this phenomenon, it was already after the top, and right before the big decline. Based on the decline from above 350 to below 280, we know that a significant decline is definitely taking place.But has it already run its course?Well, in 2016 and early 2020, the HUI Index continued to move lower until it declined below the 61.8% Fibonacci retracement level. The emphasis goes on “below” as this retracement might not trigger the final bottom. Case in point: back in 2020, the HUI Index undershot the 61.8% Fibonacci retracement level and gave back nearly all of its prior rally. And using the 2016 and 2020 analogues as anchors, this time around, the HUI Index is likely to decline below 231. In addition, if the current decline is more similar to the 2020 one, the HUI Index could move to 150 or so, especially if it coincides with a significant drawdown of U.S. equities.Moreover, let’s keep in mind that an unwinding of NASDAQ speculation could deliver a fierce blow to the gold miners. Back in 2000, when the dot-com bubble burst, the NASDAQ lost nearly 80% of its value, while gold miners lost more than 50% of their value.Please see below:Right now, the two long-term channels above (the solid blue and red dashed lines) show that the NASDAQ is trading well above both historical trends.Back in 1998, the NASDAQ’s last hurrah occurred after the index declined to its 200-day moving average (which was also slightly above the upper border of the rising trend channel marked with red dashed lines).And what happened in the first half of 2020? Well, we saw an identical formation.The similarity between these two periods is also evident if one looks at the MACD indicator . There has been no other, even remotely similar, situation where this indicator would soar so high.Furthermore, and because the devil is in the details, the gold miners’ 1999 top actually preceded the 2000 NASDAQ bubble bursting. It’s clear that miners (the XAU Index serves as a proxy) are on the left side of the dashed vertical line, while the tech stock top is on its right side. However, it’s important to note that it was stocks’ slide that exacerbated miners’ decline. Right now, the mining stocks are already declining, and the tech stocks continue to rally. Two decades ago, tech stocks topped about 6 months after miners. This might spoil the party of the tech stock bulls, but miners topped about 6 months ago…Also supporting the 2000 analogue, today’s volume trends are eerily similar. If you analyze the red arrows on the chart above, you can see that the abnormal spike in the MACD indicator coincided with an abnormal spike in volume. Thus, mounting pressure implies a cataclysmic reversal could be forthcoming.Interestingly, two decades ago, miners bottomed more or less when the NASDAQ declined to its previous lows, created by the very first slide. We have yet to see the “first slide” this time. But, if the history continues to repeat itself and tech stocks decline sharply and then correct some of the decline, when they finally move lower once again, we might see THE bottom in the mining stocks. Of course, betting on the above scenario based on the XAU-NASDAQ link alone would not be reasonable, but if other factors also confirm this indication, this could really take place.Either way, the above does a great job at illustrating the kind of link between the general stock market and the precious metals market that I expect to see also this time. PMs and miners declined during the first part of the stocks’ (here: tech stocks) decline, but then they bottomed and rallied despite the continuation of stocks’ freefall.Even more ominous, the MACD indicator is now eliciting a clear sell signal . And displaying a reading that preceded the dot-com bust in 2000, the NASDAQ Composite – and indirectly, the PMs – continue to sail toward the perfect storm.As further evidence, the HUI Index/S&P 500 ratio has broken below critical support.Please see below:When the line above is rising, it means that the HUI Index is outperforming the S&P 500. When the line above is falling, it means that the S&P 500 is outperforming the HUI Index. If you analyze the right side of the chart, you can see that the ratio has broken below its rising support line. For context, the last time a breakdown of this magnitude occurred, the ratio plunged from late-2017 to late-2018. Thus, the development is profoundly bearish.For further context, the ratio is mirroring the behavior that we witnessed in early 2018. After breaking below its rising support line, the ratio rallied back to the initial breakdown level (which then became resistance) before suffering a sharp decline. And with two-thirds of the analogue already complete today – with the ratio rallying back to its initial breakdown level (now resistance) last week – a sharp reversal could occur sooner rather than later.In addition, because last week’s bounce was merely a technical development, the HUI Index’s recent strength is nothing to write home about. What’s more, the early-2018 top in the HUI Index/S&P 500 ratio is precisely when the USD Index began its massive upswing. Thus, with history likely to rhyme again, the outlook for the PMs remains profoundly bearish.Moreover, please note that the HUI to S&P 500 ratio broke below the neck level (red, dashed line) of a broad head-and-shoulders pattern and it verified this breakdown by moving temporarily back to it. The target for the ratio based on this formation is at about 0.05 (slightly above it). Consequently, if the S&P 500 doesn’t decline at all (it just closed the week at 3913.10), the ratio at 0.05 would imply the HUI Index at about 196. However, if the S&P 500 declined to about 3,200 or so (its late-2020 lows) and the ratio moved to about 0.05, it would imply the HUI Index at about 160 – very close to its 2020 lows.In conclusion, with the miners’ recent confidence likely to fade, it’s only a matter of time before they show their true colors. With the USD Index raring to go and U.S. Treasury yields seemingly exploding on a daily basis, the PMs recent move higher is akin to swimming against a strengthening current: while they’re making progress, each stroke requires more and more energy. In addition, if a drawdown of U.S. equities enters the equation, the metaphor will be akin to swimming against a tsunami. The bottom line? Long positions in the PMs offers more risk than reward over the next several weeks or so. However, once the medium-term climax is complete, it will be smooth sailing once again.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Twin deficits could negatively affect the U.S. economy, thereby supporting the yellow metal.Twins. Many parents will tell you that they double the blessing. But economists would disagree, claiming that twins – i.e., twin deficits – could be negative for the economy. The recent deterioration in the U.S. current account and fiscal balance has sparked renewed debate over the twin deficit and its impact on the exchange rate – and the price of gold.A twin deficit occurs when large fiscal deficits coexist with big trade deficits . The former happens when the government spends more money than it raises with taxes, while the latter is the result of imports exceeding exports. A historical example of the U.S. twin deficit occurred in the 1980s, when a significant expansion in the federal budget deficit accompanied a sharp deterioration in the nation’s current account balance. According to the Institute for International Economics’ report , “from 1980 to 1986, the federal budget deficit increased from 2.7 percent of GDP to 5 percent of GDP ($220 billion) and the current account deficit increased from 0 to 3.5 percent of GDP ($153 billion).”Another example might be the 2000s. According to the New York Fed’s research paper , from 2001 to 2005, the U.S. current account and fiscal balances plunged by 3 and 4 percent of GDP , respectively. So, there is some correlation between these two. And some economists even believe that there is a causal relationship, i.e., that increases in budget deficits cause an increase in current account deficits. The link is believed to work as follows: higher deficits increase consumption, so imports expand and the trade deficit widens. However, both deficits actually have a common root: the increase in the money supply . When the Fed creates money ex nihilo to monetize the federal debt , it enables America to both borrow and consume more goods from abroad.Regardless, in absolute terms, these old twin deficits were miniscule compared to the current one. As the chart below shows, the U.S. current account deficit (green line) has expanded significantly under Trump (despite all the trade wars !) and is approaching the historical record of $800 billion seen in 2006.But what happened to the U.S. trade deficit is nothing compared to the fiscal deficit! As you can see in the chart above, it ballooned from $984 billion in fiscal year of 2019 to $3.1 trillion in 2020!So, if we simply add these two deficits together, we will see that that the U.S. twin deficits have reached a record level . As the chart below shows, it has expended from $850 billion in 2014 to $3.8 trillion in 2020!Now, the question is how the twin deficits could affect the price of gold. Well, from looking at the chart above, it’s hard to tell. Gold rallied in the 1970s, when the twin deficit was miniscule, while it entered a bear phase when the twin deficit started to increase. However, the yellow metal skyrocketed both in the 2000s and in the 2020s, when the twin deficit ballooned.The key issue is what distinguishes the 1980s from the 2000s (and 2020)? I’ll tell you. In the former period, expansionary fiscal policy coincided with tight monetary policy . In consequence, the real interest rates increased, which encouraged capital inflows and strengthened the U.S. dollar. So, gold was melting.Luckily for the yellow metal, this time, the easy fiscal policy is accompanied by the accommodative monetary policy . The Fed has already slashed the federal funds rate and it’s conducting quantitative easing to suppress the bond yields . Actually, some analysts believe that the U.S. central bank will implement the yield curve control to prevent any significant increases in the interest rates .Hence, the combination of American monetary drunkenness and fiscal irresponsibility that largely contributed to the great expansion in the twin deficits should result in the weakening of the greenback . This, at least, is what we observed in the 2000s, as the chart below shows.And this depreciation of the U.S. dollar should ultimately support gold prices , especially if we see reflation and the next commodity boom. It’s true that since its peak in August 2020, gold has been positively correlated with the greenback, but the inverse relationship can be restored one day. Investors shouldn’t forget that the dollar is not the only driver of gold prices – other factors also play a role. In the second half of the past year, both the real yields and the risk appetite increased, which outweighed the impact of the weakening dollar. Luckily, the Fed is ready to prevent any significant upward pressure on the Treasury yields coming from the twin deficits. That’s good for gold.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.

In the first part of this research article, we shared more detail related to the Excess Phase Peak technical pattern that is setting up in the NASDAQ and to highlight the validity of our Gann/Fibonacci Technical research which suggested a peak in the markets may set up sometime after April 1, 2021.  We've received many questions and comments from our readers and followers related to these articles.  Many people seem to believe we are calling for an April 1 market peak based on this research, yet the technical patterns we are highlighting suggest a longer-term market peak may already be setting up. In this second part of our more detailed “what next” article, my research team and I will highlight exactly why we believe traders and investors need to be prepared for an extended technical topping pattern and how it will likely set up over the next 60 to 90+ days.  Let's continue our research from Part I and go into more detail related to this technical setup.In Part I, we focused on the NASDAQ and how the recent downside price rotation may align with our Gann/Fibonacci research as well as align with the Excess Phase Topping pattern highlighted in our November 2020 research.  Now, we're going to focus on the Dow Jones Industrial Average and our Custom US Stock Market Index showing how these two market sectors have yet to react like the NASDAQ already has.Dow Jones Has Yet To Break Key Price ChannelLooking at the chart below, we can see that the INDU has yet to break the YELLOW upward price trend line.  We  have not seen price move below this support channel yet, thus we don't have any confirmation that a weakening in price trend is taking place.  In fact, recently the INDU has rallied higher over the last few weeks as capital has shifted away from the NASDAQ and into various other sectors. Next, we believe the INDU still has another 3% to 5% to rally further before reaching the GREEN 1.618% Fibonacci Price Amplitude Arc on the chart below.  This suggests the INDU may continue to rally a bit further before reaching resistance while the NASDAQ may attempt a more moderate price rally within the sideways (#B) Flagging channel.  This setup suggests the INDU and SPY have not yet reacted to price weakness like the NASDAQ already has.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!We've drawn a MAGENTA line on this chart highlighting what we believe a “technical breakdown” in price will look like for the INDU.  First, a rollover top sets up, prompting a downward price trend to set up the sideways Flagging trend.  After 4 to 8+ weeks of sideways Flagging, a broad downtrend will take place where price will fall -10% to -15% - targeting the CYAN support level near $29,000.  Much like the NASDAQ, this critical support level is the last line of defense before a bigger breakdown in price may occur – possibly resulting in a very deep price correction.Custom US Stock Market Index Chart Mirrors INDUThis final Custom US Stock Market Index Weekly chart, below, shows a similar type of setup as the INDU.  These Custom Index charts are tools we use to help gauge the overall market trends and possible technical setups.  They help to normalize price trends and variances between the major US indexes and provide a different perspective of price on a chart.The first thing we notice when looking at this chart is that the Custom US Stock Market Index has yet to break the YELLOW upward price channel – just like the INDU chart.  Secondly, we can see the Custom US Stock Market Index chart is much closer to the heavy MAGENTA Fibonacci Price Amplitude Arc than the INDU chart is – this suggests there may only be a 3% to 5% upside potential left in the markets related to any potential rally attempt.  Readers need to understand this does not mean that markets are limited to +3% to +5% at this stage – many sectors may trend +10% or more while the Custom US Stock Market Index chart rallies only 1.5% or so.  The stock market is a “market of stocks” - not a single entity related to the Custom US Stock Market Index chart.  Therefore, we may see various rally ranges in various sectors while we see more muted trends in some of these major indexes.The last thing we want to point out on this chart is the Fibonacci Price Amplitude Arc that originates from February 2020 (pre-COVID-19 highs).  It appears there is a high likelihood of a weakening uptrend on this chart after April 15, 2021.  It also appears there is a likely APEX inflection point near May 5 through May 10.  This APEX in price may become a key date for a potential breakdown in the trend on this Custom US Stock Market Index chart.Overall, what we are seeing on this chart is that we have yet to break below the YELLOW upward price trend line and we are nearing the key Fibonacci Price Amplitude Arc levels – this suggests the markets may be nearing a period of consolidation and/or weakening upward price trending. The key to all of these setups is the process of the Excess Phase Peak setup - where price must complete the four phases (A through D) before finally attempting a larger breakdown event (#E).Additionally, traders should stay keenly aware that various sectors will likely continue to trend in wide ranges with varying degrees of trend slopes while this extended pattern continues to setup.  On this Custom US Stock Market Index chart, we are suggesting that the #C breakdown event (targeting #D), may take place in July or August 2021.  This suggests we have about 3+ months of rotational sideways trending to navigate before the extended Excess Phase Peak #C breakdown event takes place.As these trends continue to setup, we want you to understand how various opportunities for trend will continue to setup over the next few months in various sectors and indexes.  These price rotations will likely prompt 8% to 25% price trends in a number of the best performing sectors and symbols.  The key to finding and targeting this success is to know which sectors/trends are have the highest probability for success.  That is what our Best Asset Now strategy does for us – it shows us when to engage with the market trends and which assets are the best performing assets to invest in.Don't miss the opportunities in the broad market sectors over the next 6+ months.  2021 and beyond are going to be incredible years for traders.  What we expect to see is not the same type of market trend that we have experienced over the past 8+ years – this is a completely different set of market dynamics. You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribersHave a great week!

EURUSD consolidates near the support area The US dollar stayed subdued as Treasury yields retreated on Monday, relieving pressure on its European counterpart. The pair has fallen back from the double top at 1.1990 after it went into an overbought situation. The euro is looking for support while hovering above the major demand area around 1.1830. The current consolidation is an opportunity to build up momentum. The resistance at 1.1990 is a tough nut to crack but a bullish breakout could send the price towards 1.2050. GER 30 retreats after being overbought Equity markets are treading water at the start of the week as investors remain cautious about the inflation outlook. The DAX 30 has pulled back from the all-time high at 14810 after the RSI continuously ventured into the overbought area. Instead of chasing the momentum buyers may likely wait for a discount before jumping on the trend. The previous low at 14400 coincides with the rising trendline and could be a key zone of congestion where trend-followers would bid up the index. USOIL recovers from daily support The oil price has recouped some losses from concerns about vaccine rollouts and new lockdowns in parts of Europe. The RSI has recovered into the neutral zone as the price found support in the demand area around 58.50 on the daily chart. WTI is now at a crossroad as a deeper retracement could trigger a reversal. Otherwise, what is happening could be a mere three-wave correction. As for now, the 38.2% Fibonacci level (62.00) is the next resistance. The uptrend may only resume if buyers can push through 64.80 once again.

Monday‘s higher stock prices don‘t mean that the sky is the limit now – there were quite a few signs of weakness in related markets as well. The put/call ratio moved lower agains, and so did VIX. But it‘s the market internals that are the giveaway sign – technology has been the predictable upswing driver, reflecting my yesterday‘s thoughts on the rising yields pressure:(…) One daily move doesn‘t make a trend change likely though, especially since the Mar pace of TLT decline is on par with Feb‘s and higher than in Jan. While Treasuries paused in early Mar, they‘re now once again as extended vs. their 50-day moving average as before.And that poses a challenge for interest rate sensitive stocks and to some degree also for tech - while I expect value to continue to lead over growth, technology would recover some of the lost ground on rates stabilization. And it‘s true that the $UST10Y move has been a very sharp one, more than tripling from the Aug 2020 lows.We got that reprieve yesterday, and tech jumped on board enthusiastically, while other usual beneficiaries didn‘t – utilities didn‘t move, but at least consumer staples swung higher. Coupled with the value stocks mostly treading water yesterday, it makes for a weak daily market breadth. The key events of today and tomorrow are the Congress testimonies – while Powell is set to downplay inflation, inflation expectations and still overall elevated / rising long-dated Treasury yields, it‘s my view that the market is again squaring the bets, best seen in the commodities lately (think Thursday and today) – but I look for the Fed to project the same messaging it did on Wednesday, and perhaps double down on it.I don‘t view the market as in danger of a deflationary collapse, not when the stimulus avalanche is hitting and the Fed is reluctant to change course. I am not looking for them to telegraphs such a turn today or in the weeks to come, and that would mean recovery in the commodity prices.Gold is an island of relative, temporary peace, but the miners are concerningly weakening – both gold and silver ones. Darkening clouds here regardless of the support the copper to 10-year Treasury yields can offer. Still, the yellow metal has decoupled from rising nominal yields to a remarkable degree lately.Let‘s quote yesterday‘s observations:(…) As gold is arguably the first asset to move in advance of a key policy move, it might be sensing the Fed being forced (i.e. the markets betting against the Fed) to moderate its accomodative policy. Twist, taper – there are many ways short of raising the Fed funds rate that would help put pressure off the sliding long-dated Treasuries, not that these wouldn‘t be susceptible to move higher from oversold levels. And just like the yellow metal frontrunned the Fed before the repo crisis of autumn 2019, we might be seeing the same dynamic today as well.For the cynical and clairvoyant ones, we might sit here in 3-6 months over my notes on „the decoupling that wasn‘t“ - all because rates might snap back from the current almost 1.8% on the 10-year bond.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookBoth the volume and upper knot are short-term suspect on yesterday‘s S&P 500 upswing – I wouldn‘t be surprised by continued consolidation unless the testimonies today and tomorrow, bring a game changer.Credit MarketsHigh yield corporate bonds (HYG ETF), and the volume comparison to preceding day looks here better than in stocks. Still, it can‘t be said the move either in HYG or in investment grade corporate bonds (LQD) was a bullish rush. These two markets merely joined in the long-dated Treasuries recovery, not signalling return of animal spirits.Technology, Financials and UtilitiesSuch a sectoral view of rising tech (XLK ETF), for a few sessions weakening financials (XLF ETF) and unconvinced utilities (XLU ETF) isn‘t a bullish constellation to drive the 500-strong index reliably ahead at breakneck speed really.Gold in the SpotlightSimilarly to Mar 12, the precious metals upswing is being challenged – miners (GDX ETF) are underperforming. Today‘s session will tell whether we‘re witnessing consolidation, or a renewed rollover to the downside, the chances of which have risen yesterday.The weekly view remains positive – the pace of gold‘s decline became less sensitive to nominal yields move, turning higher before these did, and currently not making much headway. Still, that‘s arguably the clearest sign of the turning tide in the gold market.Silver, Silver Miners and CopperSilver is getting under pressure on rising volume, and its miners are declining too, highlighting increasing risks to the white metal. Disregarding today‘s premarket action, that alone makes it worthwhile to dial back (take profits off the table) in the long silver short gold spread I introduced you to on Feb 12. It‘s that the degree of momentary commodities underperformance looks like taking a meaningful toll on the white metal (and that concerns oil as well, which would turn short-term bearish with a breakdown below $57 to $57.50 on a closing basis and on high volume without a prominent lower knot.SummaryS&P 500 upswing isn‘t as strong as it might seem, and today‘s deceptively small downswing has the potential to turn ugly on Fed missteps. Seeing these happen, I don‘t view as a leading scenario for today or tomorrow, however.Gold and for that matter silver bulls too, have to prove shortly that the upswing isn‘t taking more than a pause – that is, that it isn‘t rolling over. The signals from the commodities space aren‘t encouraging, and platinum trading isn‘t helping to clarify the outlook for today‘s session either.

Although dovish, Powell downplayed the bond yield rally. The Fed’s more tolerant stance on inflation is good for gold, but the metal may continue its bearish trend in the short-term.In the last edition of the Fundamental Gold Report, I analyzed the latest FOMC statement on monetary policy and economic projections . Today, I would like to focus more on Powell’s press conference . My reading is that the Fed Chair sounded like a dove. First of all, he emphasized several times that the jump in inflation this year will be only transient , resulting from the base effects and rebound in spending as the economy continues to reopen. And Powell explicitly stated that the US central bank will not react to this rise in consumer prices (emphasis added):Over the next few months, 12-month measures of inflation will move up as the very low readings from March and April of last year fall out of the calculation. Beyond these base effects, we could also see upward pressure on prices if spending rebounds quickly as the economy continues to reopen, particularly if supply bottlenecks limit how quickly production can respond in the near term. However, these one-time increases in prices are likely to have only transient effects on inflation (…) I would note that a transitory rise in inflation above 2 percent, as seems likely to occur this year, would not meet this standard [i.e., the Fed’s goals of maximum employment and stable prices].Second, Powell also pointed out that we are still far, far away from reaching the Fed’s employment and inflation goals. So, investors shouldn’t expect any hikes in the interest rates or any taper tantrum anytime soon. He was very clear on that, saying that it’s not yet time to start talking about tapering, and that the Fed will announce well in advance any decision to taper its quantitative easing program. Indeed, in a response to the question “is it time to start talking about talking about tapering yet”, he said:Not yet. So, as you pointed out, we’ve said that we would continue asset purchases at this pace, until we see substantial further progress. And that's actual progress, not forecast progress. (…) We also understand that we will want to provide as much advance notice of any potential taper as possible. So, when we see that we’re on track, when we see actual data coming in that suggests that we're on track to perhaps achieve substantial further progress, then we'll say so. And we'll say so well in advance of any decision to actually taper.Third, the Fed Chair reiterated a few times that the Fed’s changed its approach and it will not react to the forecast progress, but only to the actual progress , stating that:the fundamental change in in our framework is that we’re not going to act preemptively based on forecasts for the most part. And we’re going to wait to see actual data (…) And we’re committed to maintaining that patiently accommodative stance until the job is well and truly done.It makes some sense, of course, but it also increases the risk that the Fed’s response to rising inflation will be delayed. The same stance was adopted in the 1970s, when the central bankers believed that they would have plenty of time to react to any dangerous increases in consumer prices. But such an approach resulted in inflation getting out of control, leading to great stagflation . Gold shined then.Implications for GoldWhat does this all mean for the gold prices? Well, latest Powell’s remarks were dovish, which should support the yellow metal. But, as the chart below shows, we don’t see such a support reflected in the gold prices (London P.M. Fix).Part of the problem is that the bond yields continued to rise, after a short pullback amid the FOMC statement, exerting further downward pressure on the gold prices. A related issue here is that although Powell sounded generally dovish , he expressed a relaxed view on the current rally in the interest rates. Indeed, when replying to a question on the bond selloff, Powell just said that “we think the stance of our monetary policy remains appropriate”. So, his comments imply that the bond yields have room to move further up in the near-term, thus hurting the price of gold .However, there is certainly a level of interest rates that would be uncomfortable for the Fed (and Treasury), forcing it to intervene more decisively in the financial markets, and we’re not necessarily far from this level. Furthermore, given the rising inflation and inflation expectations, the real interest rates should rise at a slower pace than the nominal yields, and if they do actually fall, they would support the price of gold.If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care

GBPUSD cuts through major supportThe pound saw fresh sell-off despite a fall in the UK’s unemployment rate as average earnings, an indication of inflation remained subpar.Two failed attempts to breach the psychological level of 1.4000 have put the short side back in control. The bearish breakout below 1.3800 has intensified the selling pressure by triggering stop-losses and would call 1.3650 as the next target.In the meantime, as the RSI dipped into the oversold area, a brief pullback to around 1.3850 might fill more sell orders.XAUUSD breaks out of consolidation rangeGold came under pressure as the US dollar claws back losses from previous sessions.On the daily chart, the price is entangled between the 20 and 30-day moving averages which act as resistance after the February sell-off.Zooming into the hourly chart, the precious metal has been struggling near the supply area 1750-55.The narrowing trading range between the resistance and the rising trendline is a prelude to a breakout, and a close below 1728 would resume the downtrend with 1700 as the target.SPX 500 slides on profit-takingAs a reminiscence of the trade war, brewing international tensions with China could derail investor sentiment once again. After a two-week-long rally, the S&P 500 has retreated from its peak at 3989 in search of stronger support.Divergence between the price action and the RSI was a sign of exhaustion. Then successive breakouts below 3936 and 3911 prompted short-term traders to take profit.The latest rally could be a dead cat bounce unless it achieves a new high. To the downside, 3860 would be the next stop.

Why do we mention this? Bitcoin is in a massive uptrend right now, and we are about to see another leg up. Typically, the choice of participating or staying sidelined is with more minor consequences than this time around. We are in a wealth transferring market cycle. An event happening typically every 93 years. An event at the end of a fiat currency dissolving into hyperinflation and leaving many in despair. E.g. have you noticed your grocery bill being over 20% higher and mass media not mentioning it? Get informed and not mislead and do not wrongly be instructed that this bitcoin ship has sailed and there are no ways to participate at these levels. They will look timid in a few years to come.S&P-500 Index, Weekly Chart, Warning signs of a larger cycle ending:S&P 500 Index in US Dollar, monthly chart as of February 19th, 2021.We posted a similar to the above chart on February 19th in our weekly Silver chartbook to indicate a possible extended stock market with a more than typical retracement possibility.S&P-500 Index, Weekly Chart, Double top with Indicator divergence confirmation:S&P 500 Index in US Dollar, weekly chart as of March 22nd, 2021.Now only five weeks later, we see the first possible cracks. The weekly chart shows a possible directional change with divergences in both a directional indicator (Stochastic in yellow) and a momentum oscillator (Commodity Channel index in white), confirming this suspicion through divergences. Hence, we might get a trend reversal over the next few weeks or months. BTC-USDT, Daily Chart, Possible breakout (Short to midterm):Bitcoin in US Dollar, daily chart as of March 23rd, 2021.While due to the need to cover margin calls an actual market crash would temporarily drag all asset classes down, in the early stages of a trend direction change, money would flow from the stock market into safety asset classes like Bitcoin. The chart above shows Bitcoin in a consolidation phase that looks to resolve through a breakout to the upside. Besides, we find fractal volume transaction support at the US$50,870 price level.BTC-USDT, Weekly Chart, Bitcoin, no genius required:Bitcoin in US Dollar, weekly chart as of March 22nd, 2021.The weekly chart of Bitcoin illustrates the health of the recent trend extension. Price is trading above directional support (yellow trendline) and within the norm of Fibonacci retracement levels.Bitcoin, no genius required:Systems promising more than a hundred percent returns earned within a year, sell at exorbitant prices. You do not need to have such returns as compound interest takes very well care for those getting consistent. Why would vendors sell these unique methodologies instead of making their own fortunes with them?In short, you need high-quality principle-based guidelines, apply hard work and be independent of the good opening of others versus getting fooled by “rich quick” schemes and fool’s gold promises. There is no genius required, just good old hard work like in any other field that requires mastery for competition level.If trading were a mathematical competition, we would find all rocket scientists to be the winners in this game. But the is far from the truth. Instead, it is precisely the opposite based on a simple principle distinction. The mathematical mind seeks a precise and optimal solution. It aims at a reduction to a constant. This approach fails the high degree of aspects defining the human psyche and all the grey zones that come with it. It is much more essential to find a trading approach that fits your personality.Consequently, eliminate any system purchase. One needs to work refining one’s own path. One needs to find a niche in the time frame, market, and volatility to one’s specific personal makeup.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|March 23rd, 2021|Tags: Bitcoin, Bitcoin correction, Bitcoin mining, crypto analysis, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

Next edition of this newsletter, we’re going to do a special on REITs. We will discuss which real estate sectors could see significant recovery after a brutal 2020.Which real estate sectors could be long-term solid bets? There are a few you might not be thinking of, and we will also discuss why REITs could be a great hedge against rising bond yields and inflation scares.Do you realize what Tuesday (Mar. 23) marked? One year since the market bottomed. Can you believe that it’s already been a year? Calling it a roller coaster is an understatement.One of the most crucial market concepts is that the market never looks back. It is a forward-looking instrument. Talking about the past as it relates to the market really doesn’t do anyone any good.However, after the year we’ve had, it’s essential to take a breath, reflect, and see what lessons we can learn from.Ethan Wolff-Mann, a Senior Writer for Yahoo! Finance, put out a great article, “ What we have learned in the 12 months since ‘the bottom ’” and discusses several key points:‘Every crisis is the same’Panic can hurt a portfolioYou genuinely don’t know what’s going to happenRebalancing comes out as a huge winnerAs we sit here a year later, we can finally see the light at the end of the tunnel. Vaccines are weeks away from being available to all adults over 16 in the U.S., while COVID numbers continue to drop. But we are still confronting the reality of a pandemic that is still raging in Europe and other parts of the world. Inflation signs are flashing, and unstable bond yields are scaring tech investors every few days. But keep the above lessons in mind.My personal biggest takeaway from the last year that I have applied since the several market downturns we’ve had thus far in 2021? Nobody can predict the future and never ever try to time the market. Many investors a year ago didn’t stick it out through the volatility and lost out. Some panic sold near the bottom and never bought back in.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:A year after we bottomed, there is optimism but signs of concern. The market has to figure itself out. More volatility is likely, but I don’t think that a decline above ~20%, leading to a bear market, will happen any time soon.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. Russell 2000- Time to Pounce?Figure 1- iShares Russell 2000 ETF (IWM)I kicked myself for not calling BUY on the Russell after seeing a minor downturn during the second half of February. I also realized I may have broken my own rule about “not timing the market.” I’ve wanted to buy the Russell 2000 forever but never thought it dipped hard enough (whenever it did). I was waiting for it to at least approach a correction.But once I looked at the iShares Russell 2000 ETF (IWM) chart, I had an epiphany. I noticed that almost every time it touched or minorly declined below its 50-day moving average, it reversed.The chart does not lie. Look at it above. Excluding the recovery in April from last year’s crash, 5 out of the previous 6 times the Russell did this with its 50-day, it saw a sharp reversal. The only time it didn’t was in October 2020, when the distance between its 50-day and its 200-day moving average was a lot more narrow.Fast forward to Tuesday (Mar. 23). The Russell 2000 saw its worst day since February 25- and I loved every second of it. I felt almost similar to how I felt over the weekend during March Madness when I correctly called 13 seed Ohio to upset 4 seed defending NCAA champion Virginia. Finally, after weeks of waiting for a time to pounce on the Russell 2000 and missing golden opportunities, I think the time has come. We’re back right below its 50-day.Aggressive stimulus, friendly policies, and a reopening world bode well for small-caps in 2021. I think this is something you have to consider for the Russell 2000 and maybe overpay for.I’m finally switching this to a BUY.For more of my thoughts on the market, such as inflation fears and why I love emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accu