Craig Hemke – Technical Outlook And Macro Thoughts On US Equities, Gold, Silver, And Mining Stocks
Craig Hemke, Editor of TF Metals Report, joins us to review his technical outlook for the US equities markets, as well as for the precious metals, and the macroeconomic factors on his radar. We start off looking at the key technical support levels for the S&P 500 and Craig feels it looks most probable after this weeks action, that it will go down and test the June lows near $3650 again. The concern if that support was to fail is that it could expediate a sharp move downward and liquidity event that would hit most sectors, including the precious metals.
With regards to gold, it did dip below the key support in the $1673-$1675 area last week, but only got down to $1661-$1662 and then reversed back up above the key support, so there were not a large number of sell stops triggered on that move. We also made note of the constructive recent outperformance of silver over gold, and the bullish contrarian reading in the COT reports for silver. In addition, silver and even the mining stocks stabilized this week despite the US dollar continuing to move even higher. Despite the bearish moves in gold, this divergence in silver could present a scenario where it is signaling that it already bottomed and bounced, and that the drop in gold may be more short-lived.
We wrap up with a look at GDX and SIL at proxies for the mining stocks, noting their sideways channel has allowed some of the oversold momentum indicators to cool off some, and the question is poised if this could allow another move lower. Craig’s position is that while this is possible for the mining sector overall, that he encourages investors to do their homework and select quality teams and projects that may still outperform, noting the performance of AbraSilver Resource Corp (ABRA) (ABBRF) over the balance of this year.