Technician: Bear Market Rally; Gold Gets a Buy Signal

Interview with Louise Yamada of Louise Yamada Technical Research Advisors, LLC. Full audio podcast can be heard Saturday on the Newshour page here and on iTunes here along with our weekly market wrap-up and Big Picture.

Still Looks Like a Bear Market Rally

“Until proven otherwise, to us it's a bear market rally and it looks very similar to what happened back in September-October of last year with the rally into November. And we had suggested we could see something similar and now we're seeing a hesitation—our targets were 2000, possibly 2050 on the S&P and 17,000, maybe 17,500 on the Dow—and it's stalling right at the declining 200-day moving average—not just for the Dow and the S&P, but all the US indices except for the utilities really. And I think that it's conceivable here—it's very interesting that this morning's rally couldn't hold—that we might be turning down once again. Our long-term momentum sell signals are still in place so until we see something a little bit more definitive in terms of maybe new highs or something of that sort, we are still confined under these declining 200-day moving averages and the declining downtrends that have been put in place since the peak in May. So I think we need to see a number of things reverse before we could say that this is anything more than a bear market rally.”

Eighth Year Presidential Cycle Generally Negative

“One interesting statistic is that when you have a two-term president, the eighth year is generally a negative year and that's another statistic that we're dealing with here that doesn't get pointed out too often.”


Source: AlmanacTrader.com

Long-Term Buy Signal on Gold

“The lift through 00 on gold was a breakout...it broke out through the 2013 downtrend and it lifted above one or two of the prior lower highs and it clearly breached those levels on the upside suggesting that something in the supply-demand chain had shifted. We also got a long-term momentum buy signal on gold which doesn't necessarily mean it's initiating a new bull market but it does suggest that there is further to go for gold and I think that you could see a rally over time, perhaps toward 00, which is where the 2011 downtrend comes in and intersects.”

Listen to this full interview with esteemed market technician Louise Yamada on Saturday along with our weekly market wrap-up on the Newshour page here or on iTunes here. Subscribe to our weekly premium podcast by clicking here.

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