Markets Update: Precious Metals Consolidation, Stock Market Bear Action
David Tablish | Mar 15, 2022 02:12AM ET
Last week I mentioned that it might be time for the PM stocks—S&P/TSX Venture Composite (CDNX), ARCA Gold Bugs (HUI), VanEck Gold Miners ETF (NYSE:GDX), VanEck Junior Gold Miners ETF (NYSE:GDXJ), ARCA Gold Miners GDM), SPDR® Gold Shares (NYSE:GLD), iShares Silver Trust (NYSE:SLV), Silver futures (SIL), ETFMG Prime Junior Silver Miners ETF (NYSE:SILJ), and iShares S&P/TSX Global Gold (TSX:XGD)—to start consolidating their gains from the last reversal point in the blue 5 point triangle reversal patterns. It looks like it has now started after last weeks high.
Next is the daily line chart—ProShares UltraShort Yen (NYSE:YCS)—which shows Monday's move lower left a small double top suggesting the consolidation phase is beginning. I also added the Fib retracements to get a feel for where reversal point #2 may show up with the recent high being reversal point #1.
I also mentioned last week that we shouldn’t be surprised to see a backtest to the top rail of the August 2020 trading range. This weekly chart shows three areas to look for possible support. First is the top rail of the 2020 trading range. Second is the black dashed S&R line with the 3rd area being the 30 week EMA.
This short term daily line chart for the US stock markets—S&P 500, Dow Jones Transportation, NYSE Composite, Philadelphia Semiconductor Index, iShares Russell 2000 ETF (NYSE:IWM), NASDAQ 100, iShares Micro-Cap ETF (NYSE:IWC), and the NASDAQ Composite (COMPQ)—show the H&S tops which are trying to finish up the backtesting process.
The IWM is attempting to breakout from its blue triangle which will either be a halfway pattern to the downside, or if things get really nasty, it could be the first of several consolidation patterns that create the impulse move lower.
Several of the indexes are showing a lower low which is what we want to see to help confirm the new downtrend.
This last chart for today is the longer term daily line chart. What stands out the most for me is the rally leading into the H&S tops. If there was ever a place to look for some reverse symmetry to the downside these charts show that possibility. One step at a time.
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