Precious Metals and Miners Are Ready to Rally
2023.05.31 04:29
In , we were looking for a correction to around $1940 an ounce.
The June contract fell to $1932.
Now, it closed on the exchange at $1958.
Plus, it had a new 60-day low and potential reversal pattern.
The GLD (NYSE:) ETF has begun this week trading inside the range of Friday and with a very narrow trading range at that. That means a pause and uncertainty.
Our Real Motion Indicator shows support at its blueline or 50-DMA.
Is it time to get in or buy more if already in?
The gold miners ETF GDX (NYSE:) is a holding in 2 of our quant models-Sector Rotation and GEMS.
Sector Rotation entered in March. This model uses our trend strength indicator to measure performance and gives it a ranking.
Currently the conservative model has the ETF ranked number 5.
The GEMS model uses a component of sector rotation. Similarly, GDX is ranked number 5.
On the daily chart, our Real Motion indicator sits right on its 50-DMA.
Furthermore, the price of GDX is above 50-DMA.
Momentum needs to catch up, and the price, ultimately, needs to return over the 200-DMA (green line).
Silver SLV ETF is in our GEMS model as part of the global Macro algo.
That, too, had an inside and narrow range trading day. SLV’s momentum sits on support while the price is above it.
Based on our quant models (pure math) and our discretionary read of these charts (math and art), it appears the correction in all 3 (GLD, GDX, SLV) could be done.
That means the risk is super tight, as these recent support levels should hold.
It also means that should they get follow through to the upside, it is possible to see a much bigger rally than the one in early April.
ETF Summary
- S&P 500 (SPY) 23-month MA 420-the dance
- Russell 2000 (IWM) 170 support – 180 resistance
- Dow (DIA) 327-333 trading range for the week to hold or break
- Nasdaq (QQQ) Opened on the highs, closed on the intraday low-needs to hold 348.50 to prevent a reversal top.
- Regional banks (KRE) Did the initial damage now sidelining
- Semiconductors (SMH) No doubt-she is showing expansion
- Transportation (IYT) Like to see this hold 220 this week
- Biotechnology (IBB) 121-135 range
- Retail (XRT) 56.00 the 80-month MA while momentum is at least flatlining
