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Today, we started out with a look at precious metals as the rally continues to extend. Gold is trading up at some important resistance levels carved out during 2016 along the 2011 trend-line, but looks poised to continue moving higher within a bullish channel. Silver recently broke above a key trend-line extending back to last summer and higher prices look likely ahead. We’ve been discussing the distinct possibility that the US dollar has reached a tradable low, and while at first this may seem likely to undermine a rally in precious metals, the two can trade together. We’re operating off the technical outlook for each at this time and not overthinking the inverted relationship.
Copper continues to trend strongly, but is in need of a pullback to pique interest from the long-side. Crude oil is a tough one for both sides of the tape, with volatile swings dominating trade. This is likely to continue, but the overall big-picture technical structure smacks more bearish than bullish. On that, we look for rallies to fail.
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Equity indices are shaking off the most recent threat from North Korea; bullish responses continue to underpin good risk appetite. The DAX is working on breaking above the June trend-line and making a move on major resistance surrounding 12300. It will require a strong daily close well into the 12300s, though, before we can become too bullish. The CAC may be on the verge of ending a multi-month correction if it can trade above the top trend-line of a channel it’s been developing since the elections. The S&P 500 is likely to gap lower this morning after being closed for Labor Day yesterday, but looks likely to shake off the most recent NK threat. New record highs look to be around the corner.
For full technical considerations, please see the video above…
---Written by Paul Robinson, Market Analyst
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