Bad news still good news - for how long?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Friday's NFP had the market confident enough to bid up anything denominated in USD as the print gave reason to doubt the strong hawkish resolve Powell guided toward just two days prior. If we have learned anything through this hiking cycle is; that as long as the "real economy" (fake data debate aside) remains "strong enough," the central bank is going to hike. The fact that the stock market's decline remains orderly is making Powell's job easier.
Below is the familiar 4-hour chart of the SPY we have been showing; note how prices have, in fact, found support in the yellow highlighted zone. As long as support holds at the bottom of the Bollinger band and 50-MA, both momentum and price should tun back up to at least test the pre-Powell high; beyond that, the open gap remains the target, all be it now perhaps an extended one.
Gold bulls are holding the line stubbornly. Bears failure to make a lower low last week has given bulls yet another chance to crack the $1685 spot level on a closing basis (at least two daily closes to confirm the breakout), just about where it topped out on Friday intraday. The below is an update of the weekly chart we have been showing; bulls want to see prices rally while stochastic RSI reaches and stays in the overbought yellow zone while prices extend a breakout. Bulls may get a very quick move higher should they have success at $1685 with conviction; this is the level we continue to believe traders should be watching right now.
Thanks and have a great week,