After scaring the pants off the market in his Jackson Hole speech held in August, US Fed Chairman Jerome Powell has changed his tune slightly in a speech made on Wednesday that sparked what could be a Santa rally.
He was still talking tough and saying they aren’t done raising rates yet, but his tone was less hawkish than Jackson Hole, so the markets took that as a buy signal.
The long-term downtrend remains, but the short-term uptrend is starting to morph into a medium-term uptrend, with a monthly buy pivot confirmed in the S&P 500 last month.
So the bias is still to the upside, with plenty of stiff resistance above.
I have been mentioning recently that gold was starting to look more constructive. I feared a huge fall in gold could take place if major support didn’t hold a month ago.
But gold managed to hold above the key level and has staged an impressive bounce, confirming the first monthly buy pivot in more than a year.
In the ‘Closing Bell’ video on 12 November, I told you that Newcrest Mining [ASX:NCM] was looking interesting, and it has had a good run since then and could head a lot higher.
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I ended up liking the setup so much that I sent a trade alert to buy NCM to members of one of my services on 24 November.
I show you two other gold stocks today that have similar setups to the one I showed you in Newcrest Mining.
I also analyse the gold price now that it has confirmed a monthly buy pivot and show you the reasoning behind my Newcrest Mining tip.
I still think there is more volatility to come in equity markets over the next six months, but while the short-term uptrend remains, I have to lean bullish, with an eye on the exits at the first sign of trouble.
Until next week,
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Murray Dawes,
Editor, Money Weekend
