Last I updated on stocks a couple of weeks ago, I continued to suggest that the rally wasn’t over.
On the weekly timeframe, the top Bollinger band target I have been suggesting as a target has moved up - as a function of the range widening. Below is an update of that chart. Do stocks have higher to go? Possibly - but at this point, the rate of ascent is at serious risk of slowing (at a minimum) in my opinion; there’s never anything wrong with taking at least some money off the table.
I do think stocks will continue with an upward bias – unless and until there becomes a reason for the FED to take action to loosen financial conditions. When that begins, I could imagine a slope of hope scenario emerging, where the price develops a pattern of lower highs and lower lows, propelled by what the market could interpret as an impotent series of 25 BP cuts.
Would the above scenario be bullish for gold if it plays out? I certainly think so, and physical stackers can continue to act accordingly. That said, I still think the probability for the short term is that gold will come into the yellow support zone; an opportunity for the bulls?
Bitcoin is finally showing signs of (somewhat) slowing down in the 42k range. I have a feeling the time to buy the dip in Bitcoin may coincide with the time to buy the dip in gold. The 4-hour chart below shows a support line that, if breached, would probably lead prices lower, in my opinion.
Thanks and have a great week.
