Testing investor’s resolve shows buyers still engaged

The start was sluggish, the sellers pushed the indexes lower, but the buyers were still willing to push them back into positive territory. The economic reports were all positive on the day with most telling being the leading economic indicators projecting 0.5% growth… not exactly what the Fed said, but then the economist are just basing the projections on interviews with businesses. The Philly Fed jumped to the highest reading since last September and that was positive, my view. The Philly numbers did support the Fed projections of the economy picking up in the second half of the year.

Japan was one of the leaders in Asia today with a gain of 1.6% and follow through to the break higher yesterday. We have discussed prior the positive moves in Japan. Peru was also higher gaining 1.6% getting bump from the move in metals the last couple of days. Australia was up 1.1% for the same reasons. If the metals continue to move watch for the countries that are supported by the mining efforts to benefit.

Celgene (CELG) jumped 4.5% on the day breaking from consolidation near the $162 mark to help the biotech sector attempt to break free from the two week consolidation near the current highs.

Starbucks (SBUX) gained 2.2% on the day as well breaking free of similar consolidation to continue the uptrend. The next level to move through is the $77.50 mark which is the March high. This has been a nagging level for the NASDAQ Index to clear.

Still in the business of managing the risk and taking what the markets give.

Practice patience.

Notes to Note:

  • Volatility?¬†Again holding steady at the 10.6 level with no real challenge on the day, even with the early selling.
  • Gold jumped 3.4% on the day to follow through on the cup and handle move higher. Gapped at the open and never looked back. Closed at $126.94 for GLD. $1314 on the metal.
  • Silver move up 4.5% above all resistance points and looks ready to move higher on the current speculation.
  • Interest rates on the thirty-year bond¬†moved higher after the brief move lower on Wednesday follow Yellen’s comments. Expectation remains for yields to rise if the economy is truly improving looking forward. TBT worth our attention?
  • Energy back on the upside and leading the broad sectors for the S&P 500 index.
  • MLPs bounced back from the drift lower on Wednesday with solid gain in AMLP of 1.4% and hitting a new high.

Chart Notes:

The chart below is a comparison chart of the commodity asset class. The June 4th start date is when the movement to the upside currently found some momentum. You can see the advancement in Gold, Silver, Base Metals and Gasoline. If the trend continues higher in the sector the opportunities short term are obvious.

Commodity

Gold miners (GDX) return to the upside on Thursday. Gold gapped higher on the day and the miners followed suit on the upside. Higher gold prices are better for the miners profits and the stocks jumped higher. The entry signal on Wednesday at $24.50 played out well today on the upside. The sector has done well on the bottom reversal break to the upside. Breaking the downtrend line and the 200 DMA has also added to the validity of the move higher.

GDX

Silver (SLV) didn’t want to be outshined by gold today and put on a upside display of its own gaining 4.5% in the metal. The miners (SIL) were up 6.8% as they benefited from the move in the metal just like gold above. If the fear of inflation and a weaker dollar remain the upside may very well continue.

SLV

Choppy is still in play as it rotates among the sectors.¬†Precious metals were the winner today as the worries globally rise to surface.¬†Reaction to news can be short lived and something to watch in tomorrows trading. We have to take what the market delivers short term and manage the risk of our longer term positions as well. Don’t let the short term volatility confuse the uptrend in play longer term. Manage your¬†risk relative to your time frame and remain patient.