Bullish for Gold Miners if this is a “Head & Shoulders Top!”

 

CLICK ON CHART TO ENLARGE

The above chart compares the New York Stock Exchange Index (NYSE) to the Junior Miners ETF (GDXJ). The ratio has created a strong move up over the past few years, as the stock market has performed tons better than the miners ETF.

The ratio may have created a head & shoulders topping pattern. Even if the pattern read is incorrect, the ratio does find itself at the bottom of a rising channel, as it test support.

What takes place at this support line could be very important for miners and where they will be at the end of the year!!!

-

-

So Goes a HOG, So Goes the S&P 500?

 

CLICK ON CHART TO ENLARGE

Is it true that "So Goes Harley-Davidson (HOG) So Goes the S&P 500?"  In my opinion, that is a stretch.  Could HOG tell us something about consumption or lack of, by a certain class of baby boomers? Possible!

HOG remained above a key support line for 10-years. Once support broke at (1) above, HOG lost over 75% of its value and the S&P 500 shrank as well. The chart above reflects a support line that is at the same angle as prior 10-year support that could be giving way.

I don't feel we should make major allocation adjustments based on the action of one stock. I am of the opinion its worth keeping track of stocks like HOG for a potential sense of consumption and how certain consumers are acting/feeling.

-

Bond players don’t seem to believe that the Fed will taper at this time!

 

CLICK ON CHART TO ENLARGE

Coming into 2014, yields had just experienced the largest 18-month rally in 30 years! On Jan the 24th, the Power of the Pattern said their was a two-thirds chance bond prices would rally and yields would fall. (see post here)  

Did the rally in yields get overdone over the past year and a half? The Power of the Pattern believed so at the first of this year and this has caused members to be long TLT for months.

The above chart highlights that TLT is reflecting relative strength compared to the S&P 500 this year and could be breaking above a 2-year falling resistance line above. 

It appears many people at the first of this year thought the Fed would start a taper program, pushing rates higher. What's happened instead? Rates have fallen and TLT could be breaking out.  What might happen to TLT if the S&P 500 would happen to break steep support dating back a few years? Could that impact Janet's plans???

-

-