Gold Seasonals Wreaking Havoc


September 27, 2020

Weekly Market Outlook

By Keith Schneider

US equity markets mostly retreated, with the NASDAQ 100 bucking the sell off and closing +1.76% on the week. Meanwhile, Small Caps fell with Grandpa Russell (IWM) closing -4.48%, erasing much of the improvement over key US equity benchmarks. Globally stocks retreated with no exceptions.

The leadership shifts we saw over the past few weeks reversed with Growth closing strong on Friday.

However, one exception, was precious metals which broke down hard and remained weak although the longer-term trend is still intact.


This week’s highlights are:

  • Risk Gauges improved to a weak neutral reading
  • NASDAQ 100 closed strong on Friday but is still under pressure, closing under the 50 DMA
  • Market Internals are still weak
  • Sentiment Indicators bounced off oversold levels short term
  • Clean energy plays performed well with Solar the leading performer for the week
  • Transports (IYT) has the strongest TSI (Trend Strength Indicator)
  • Gold, Silver, and Metal Miners retreated in alignment with seasonal trends
  • The Dollar is running rich on a short-term basis and corrected to long term support and is still down YTD

On a short-term basis, equities were oversold as the number of stocks above their 10-day moving average dropped to less than 10% on Thursday. Our Real Motion indicators were also hitting oversold levels and this combination often leads to a decent bounce which started on Friday. We still need some added confirmation of strength to move all the key indexes above their 50 DMA’s and resume bull phases to change our outlook.

Best wishes for your trading!

Keith Schneider



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    Thomas Leong

    I'm thinking the solar up, coal/oil down reflects that Biden is leading in presidential polls.

    - Reply
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      Keith Schneider

      That makes sense Thomas...risk controls critical as this market has not followed logic

      - Reply

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