Published on April 19, 2017 @ 4:00am
If you watched trading activity across the major indices yesterday, you saw a microcosm of what has continued to take place for weeks - markets showing weakness only to be saved at the last minute. Yet again, the NASDAQ Composite looked as if it might crack the previous day's low, but the plunge protection team wasn't going to let it happen. Hence, why we still have so many more bullish trades open vs. bearish ones.
At this point, it's all about context of time. Meaning, if you're far less active than the hyperactive swing traders out there right now - who continue to get pin balled back and forth - you're simply going to sit it out and wait for these markets to do whatever it is they're going to do before moving much higher again.
If you're a swing trader exercising some patience looking for a far more opportune time to get long or short these markets, you might just get that any day now. But, to which side of the trade really remains a big question right now, despite all of the financial talking heads out there who continue to come up with every argument for either side.
As it stands right now, these markets literally could go either way. The fact trading lately has favored utilities and consumer staples is a bit of a concern, but let's face it - we've seen this picture so many times before it's really starting to remind me of the little boy who cried wolf. Meaning, at some point these markets are actually going to do what so many have expected, and they're not going to believe it until it's too late.
Oil and gold both continue to pull back now following some pretty nice runs, which is to be expected. Nothing really out of the ordinary there. Oil has run into a very key confluence area, but even it's trying to fight back.
Gold, however, still continues to be among the best sector performers on the year. Although we're still convinced at some point gold could trap bulls, it's looking like a move to $120 and change on GLD is probably in order for the time being - with a much bigger selloff being far more speculative right now.
The bottom line is if equities can find their footing and melt-up, we'll probably get that selloff in gold. However, should the major indices only manage to find their way just short of their recent highs - and break down from there - we're probably looking at higher levels ahead for GLD once it pulls back to that $120 and change level.