/GC (gold futures contract) has gone a bit parabolic recently while at the 85ish extreme overbought reading & looks susceptible to a pullback if the stock market rallies to regain some of last night’s losses on the stock futures. With /GC up over 7% since the buy signal highlighted just 10-days ago (less than 5 trading sessions on GLD) on the breakout above 1580, this might be a good time for active traders to either book partial or full profits and/or raise stops to protect gains. Feb 14th & updated 60-minute charts below.


/SI (silver) has also rallied about 7% since the previously highlighted breakout/buy signal back on Feb 14th. A solid break below this minor uptrend line coupled with a snapback rally in the stock market would likely bring /SI back down to at least this second (lower-most) trendline & possibly as low as the 18.138 former resistance, now support level, should that lower trendline give way. Also, note the negative divergences on the PPO & RSI below as silver makes a test of its January major reaction high. Feb 14th & updated 60-minute charts below.

Of course, the possibility & even probability of a much larger drop in the stock market, especially if these supports don’t hold, is very real & decent. This market has been dangerously shrugging off both fundamentals (over-valuation metrics) and technicals (overbought conditions, divergences, bearish chart formations, etc..) as FOMO (fear of missing out) has kept a steady bid beneath equities for months now, which is exactly the type of conditions in which some of the steepest & most swift corrections often arise from. As such, stay flexible & don’t be married to any one scenario in which the stock market, gold, bonds, etc. must do this or that. I’ll wait to see how the market & precious metals trade once all the players have stepped onto the field at 9:30 am & follow up with some additional analysis & comments from there.