What a last 24 hours for markets! At one point Gold was up $100/oz, S&P futures were limit down and the British Pound was down over 8%! The volatility has subsided, perhaps temporarily and Gold settled around $1320/oz with Silver settling below key resistance at $18. The miners predictably gapped up but the strength was sold. As miners remain below 2014 resistance we expect Gold to retest $1300/oz before moving higher.
The chart below plots the weekly candlestick charts of GDXJ (top) and GDX. The miners gained 5% to 6% on the week thanks to Brexit but note that miners sold off today after testing 2014 resistance. GDXJ, which has resistance at $43-$45 reached $43.76 today before declining and GDX, which has resistance at $27-$28, reached $27.71 before declining.
GDX, GDXJ Weekly Candles
We should also note that the miners remain stretched when viewed through the lenses of history. Specifically, Brexit pushed the rebound above the 2008-2009 rebound.
HUI Bull Analog
Given the action in the miners today and their historically overbought condition, coupled with Gold selling off from much higher levels, I expect Gold to retest $1300/oz next week. A retest is only that and nothing more. While Gold has technically not formed a reverse head and shoulders bottom, it nevertheless has a potential measured target of $1550/oz. There is some resistance at $1330 and $1380 to $1400. However, there is very little resistance from $1400 to $1550.
Gold Weekly Candles
News events rarely change market trends as the market typically leads news but Brexit could be an indication of a new bullish development for precious metals. That would be the long-term disintegration of Europe which would be very negative for the Euro, the world’s second largest currency. This news propelled Gold through $1300 and could be the catalyst to take it towards $1400 over the next few months. Meanwhile, the gold stocks could back and fill just a bit before again testing 2014 resistance levels. Jordan Roy-Byrne CMT, MFTA
related:
Michael Campbell on the The Age Of Consequences
– European equities drop with British banks among biggest losers
– Gold climbs for second day with yen as haven demand persists
Sterling fell below Friday’s lows with a 3.7 percent slide to the weakest since 1985 and the FTSE 100 Index retreated alongside European shares, weighed down by upheaval within Britain’s two major political parties even before Brexit negotiations begin. Declines for British banks put a measure of European lenders on course for the biggest two-day drop on record. Demand for haven assets boosted gold and government bonds.
also:
Don’t miss Michael Campbell on the The Age Of Consequences
All the selfies in the world won’t change the fact that we are in the Age of Consequences, and Brexit is just another check mark.
CLICK HERE to listen to the whole show
Summary
– Looking purely at demographics there appears to be important effects to stock performance.
– We quantify the peaks and troughs in the birth cycle.
– We’d expect a stock market low around the end of 2017.
…..view larger images & read more analysis HERE
related:
Fear is the go-to emotion that government preys upon. It’s so reliable. The fear of the unknown causes most individuals to give away and sacrifice every liberty that they were naturally born with. A population that is perpetually afraid ultimately ends up fearing liberty itself!
Government’s sales pitch is that you need them. It is they who will protect you from a never-ending carousel of fears.
Off course that’s not even remotely true, but truth is not necessary for an aggrandizement of power to take place. Just look at the TSA for example. It has been shown over and over again to be nothing more than security theatre, yet it’s still there making American lives miserable.
Government has nothing of its own. It produces nothing. Everything that it has it must take from its victims by force. A pipeline of fear stands readily available to them with excuses to justify their theft. Fear is the currency used in the exchange of liberty for power.
Thankfully, we have just witnessed an historic moment. British citizens have voted to leave the European Union!
A gigantic lesson can be learned from this event. It proves that fear-mongering has its limits. It’s not fool-proof.
Also:
The stunning Brexit vote isn’t about politics. It’s a reflection of the economic & financial change that’s bringing down the EU. The first major domino to tumble in the unwinding of globalization /political corruption / protectionism / endless regulation. Bigger dominos are teetering as the phenomenon sweeps the globe. Don’t miss Michael Campbell’s A Major Domino Tumbles
I know Mike is a very solid investor and respect his opinions very much. So if he says pay attention to this or that - I will.
~ Dale G.
I've started managing my own investments so view Michael's site as a one-stop shop from which to get information and perspectives.
~ Dave E.
Michael offers easy reading, honest, common sense information that anyone can use in a practical manner.
~ der_al.
A sane voice in a scrambled investment world.
~ Ed R.
Greg Weldon
Josef Schachter
Tyler Bollhorn
Ryan Irvine
Paul Beattie
Martin Straith
Patrick Ceresna
Mark Leibovit
James Thorne
Victor Adair