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New Day, New All-Time Highs, And Gold In The Wings

By Monica KingsleyStock MarketsApr 14, 2021 10:29AM ET
www.investing.com/analysis/new-day-new-alltime-highs-and-gold-in-the-wings-200573030
New Day, New All-Time Highs, And Gold In The Wings
By Monica Kingsley   |  Apr 14, 2021 10:29AM ET
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S&P 500 went up yet again yesterday, and the corporate credit markets' non-confirmation resolved itself. While the same can't be said about small caps or emerging markets, S&P 500 doesn't care. It keeps on its staircase rally without any real corrections to speak of.

There are no intraday corrections to speak of, either, unless you count the sharp and brief pre-market one yesterday before the CPI figures came out. That's the result of the sea of liquidity in practice, and the avalanche of stimuli. The 1.50% yield scare on 10-year Treasuries is long forgotten, and technology welcomes every stabilization, every retreat from even quite higher levels, and value stocks barely budge. There is no real rotation to speak of and see here, move along.

Such were my recent observations:

(…) No denying that the stock market is in a strong uptrend, but it got a bit too stretched vs. its 50-day moving average – a consolidation in short order would be a healthy move. But the CPI readings above expectations don‘t favor one today.

Talking gold prospects early yesterday:

(…) And that's probably what gold is sensing as it grew weak yesterday. The rising yields aren't yet at levels causing issue for the S&P 500, but the commodities' consolidation coupled with nominal yields about to rise, has been sending gold down yesterday – and miners confirmed that weakness by leading lower. This would likely be a daily occurrence only unless and until copper gives in and slides – that‘s because of the inflation expectations having stabilized for now, but Treasury yields not really retreating. Yes, gold misses inflation uptick that would bring real rates down a little again – and is getting one in today‘s CPI as we speak.

CPI inflation is hitting in the moment, and its pressure will get worse in the coming readings. Yet, the market isn't alarmed now as evidenced by the inflation expectations not running hot. The Fed quite successfully sold the transitory story, it seems. Unless you look at lumber, steel or similar, of course. None of the commodities have really corrected, and the copper performance bodes well for the precious metals too.

The stalwart performance in the miners goes on after a daily pause as gold gathers strength and silver outperformed yesterday. Silver miners and gold juniors are pulling ahead reliably as well, not just gold seniors.The run on $1,760 awaits.

Let's move right into the charts (all courtesy of www.stockcharts.com).

Gold And Miners

Gold Daily Chart.
Gold Daily Chart.

Gold isn't in a decline mode anymore, and appears picking up strength, so as to take on the $1,760s. Volume is returning, and the current reprieve in rising yields is welcome.

Gold Daily Chart.
Gold Daily Chart.

Miners returned to the limelight. It's my view they will lead gold by breaking above their recent highs convincingly, as the tide in the metals has turned. Time and desirably, catalysts of such move, are all that are needed. Geopolitics or more unavoidable inflation data bringing down real rates, that is what I am looking for next.

Silver And Miners

Silver Daily Chart.
Silver Daily Chart.

See the gold and silver miners trading in lockstep, remember gold juniors as well, and you get this bullish picture where the whole precious metals sector is slowly coming back to the limelight. In case of silver, the return in volume bedes well for the days ahead – all without the classic signs of bearish isolated silver outperformance.

Summary

S&P 500 and the still elusive consolidation – the Fed speakers won't likely trigger one today. Bulls watch out for some daily downside with little to no warning in your plans.

Gold and miners‘ paths are aligned, and nominal yields trajectory bode well for the days ahead, when patience is still needed before the nearest resistances in both assets are taken out with conviction.

New Day, New All-Time Highs, And Gold In The Wings
 

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New Day, New All-Time Highs, And Gold In The Wings

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Comments (6)
Monica Kingsley
Monica Kingsley Apr 22, 2021 1:50PM ET
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I apologize for being unable to comment earlier. Some server technical issues not on my side, but hopefully I would be appearing here more often as of now again...
Sony Usman
Sony Usman Apr 18, 2021 4:52PM ET
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You are the best Analyst i am following you from last year. Your each and every analysis was sound and markets reacted according to your predicted words. Stay blessed . Keep it up. Keep going dont stop.
Monica Kingsley
Monica Kingsley Apr 18, 2021 4:52PM ET
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Thank you very much Sony Usman! You bet I will be going on, in the service of the people...
George Pichurov
George Pichurov Apr 17, 2021 1:01PM ET
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What corporate credit resolution are you talking about? Junks (and especially investment grade bonds) haven't made a new high since feb (and investments since aug.), yet stonks are 10% higher.  Not to speak good red volume Friday.
Monica Kingsley
Monica Kingsley Apr 17, 2021 1:01PM ET
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Dear George, underperformances can take longer to resolve themselves. Just look how much LQD suffered alongside TLT... HYG was affected too. Right, Friday's omen...
Steven McMaster
Steven McMaster Apr 15, 2021 10:05AM ET
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I see what you are saying, the S&,P will continue to rise in linear fashion in the short to medium term. But as it does the Shiller PE ratio is rapidly overhauling the 2000 dotcom record of 44. What is your perspective on the senario of a new Shiller ratio record?
Monica Kingsley
Monica Kingsley Apr 15, 2021 10:05AM ET
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If you read me between the lines, I am not all that happy about the predictable staircase rally - a breather would be healthy - and we're getting a surprise, headline one today.
Cornel Pod
Cornel Pod Apr 15, 2021 9:10AM ET
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Thanks Monica for a superbly written informative article! I vote that you stay and share with us your expertise which is the straight scoop! SPY ADX(7) di- really is going to meet TINA soon IMO.
Monica Kingsley
Monica Kingsley Apr 15, 2021 9:10AM ET
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Thank you very much dear Cornel, and again my apologies for not being able to comment, but we took it over mail...
Mehdi Captain Music
Mehdi Captain Music Apr 14, 2021 3:50PM ET
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Please call or visit some gold miner companies to consult with them
Monica Kingsley
Monica Kingsley Apr 14, 2021 3:50PM ET
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Gold miners keep doing great, and I had been justifiably going more bullish on miners....
 
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