$WTIC has just moved below a 10 year relative strength trendline. Gold, Copper*, and the CRB all have broken below. Gold and oil are still at a level that if they reversed the downtrend and rocketed higher, we could say the uptrend is intact.
So the $TSX, Gold and Oil have to start outperforming the $SPX right here and now. My belief is that the highs are already in for oil in this business cycle and this next move will be a move back up to around $100. The real important thing is if oil continues to lose this relative strength trendline. The money has left the oil patch and usually starts reinvesting in early July. It is critical that this restarts over the next 3-4 weeks..
The largest oil show of the year hits Calgary this week. After a $25 move off the highs in one month, there is more than a little trepidation in the air. We'll see if the bulls can start a move higher.
Continue to watch this purple SPURS line and see if $WTIC can get back above the trendline. SPURS = SP500 relative strength.
So many interesting things to watch. Gold made a breakout move, then had a tough finish to the week after the Fed chairman reduced the immediate belief of more QE.
$natgas would appear to be ready to form the right shoulder of a H/S bottom.
The Aluminum index looks very interesting here.
Copper looks like like water running out of a pipe, pouring straight down with lower lows at the end of the week.
The $TSX had a very mediocre Thursday/ Friday compared to the US bullishness.
Gold/ gold stocks need a stop under here as any move to the downside could be severe below $1525 and that could happen in a day.
Good Trading,
Greg Schnell, CMT
