thank you Randy

Nice observation. Here’s my daily chart with XLF rolling off the 31ish resistance level following a divergent high & overbought conditions. Potential downside target around 28.50 if the financials start to get some traction to the downside & can take out that 31ish resistance.

Thx for sharing the setup, I agree. Best of luck on the trade.

There have been & probably always will be periods where the correlation between two asset classes, such as stocks & gold, experiences a temporary disconnect. Back in 2008, what was going on was the largest unwinding of a credit bubble in history… without a close second. The big banks were technically insolvent & gaming the stock market while loaded to the gills on just about everything with a ticker (stocks, bonds, gold, etc..) using insane amounts of leverage in addition to individual & other institutional investors being leveraged to the hit (as evidenced in the charts of total outstanding margin debt, which I’ve posted here in the past). As such, just about everything came under selling pressure due to forced liquidations from margin calls as selling beget more selling in a vicious cycle during the meltdown in 2008.

While we currently have very high levels of margin, checks & balances put in place after the financial crisis have lessened the risk of another 2008-type meltdown. While anything is possible, my guess is that gold goes the other way (up) during the next major correction or bear market but I’ll let the charts be my guide & try to adjust accordingly if that does not prove to be the case.

I’m long FSM silver miner in the potential inverse HS

Also check out the banking sector… Citi has broken down from channel support and definite weakness in the sector today