The bears will surely fuss over the low volume we saw on Monday. It was the lowest volume since the Friday before Memorial Day, so it does seem quite curious that with all the excitement the market has generated, the volume has fallen off a cliff. But in this market, volume has meant very little. We have had high-volume declines and low-volume rallies since 2009.
So I will simply note we've got very low volume despite all the excitement surrounding the move upward in the market. Perhaps it's a function of the overbought condition. The Russell has not made a higher high in a week. The S&P has been churning in the 2160 area for a few days. And how many of your stocks have really spurted higher in the last week? Admit it, not many.
And despite the hoopla over the move in the semiconductor stocks on the buyout deal of ARM Holdings (ARMH) , the number of stocks making new highs continues to contract.
I think it's because we're overbought and stocks continue to present themselves as tired. Maybe they are just going to consolidate and work off the overbought reading via time, not price, but I will note that the 10-day moving average of the equity put/call ratio did tick up on Monday, the first of these sentiment gauges to do so.
Away from all that, I was asked to check in on gold and silver again. Gold has an unfulfilled upside target of $1,400 and you can see there is a lot of support at $1,300. If I use the SPDR Gold Shares (GLD) ETF, I had a measured target at $128 and another at $132 for many months, so while the ETF has tagged the target zone, the commodity hasn't yet. Keep in mind that the numbers can change as we move months for the commodities. August is shown here.
Silver got to the target I had measured ($20) a few weeks ago and has been moving sideways ever since. I would like to see it come back and tag that uptrend line because I do not have another measured target in mind. If it managed to come to that uptrend line, at least we'd be able to see if there was another pattern to measure.
For the first time in many months, I would call myself neutral on silver and not particularly interested in being long. It has not done anything wrong, but it's gone a bit parabolic and tagged a target, so I suspect at the best it's in for a long consolidation period and at worst it's coming back to retest support.
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