SPX Triggers ST Trend Model BUY Signal By Erin Heim | May 22, 2017
I received some very important alerts this afternoon. Gold triggered a new IT Trend Model BUY signal as the 20-EMA crossed above the 50-EMA. In addition, Gold also saw a new PMO BUY signal; and, like the SPX, a new Short-Term Trend Model (STTM) BUY signal was triggered as the 5-EMA crossed above the 20-EMA. STTM signals can whipsaw quite a bit, but they can clarify the significance of short-term breakouts or breakdowns. The new signals on Gold suggest some important areas of resistance could be broken this time around.
First let's look at the new STTM BUY signal on SPX. It is great to see that declining tops resistance held through the short-term correction last week. Price has now entered April's consolidation zone. We don't have a PMO BUY signal just yet, so I'm hesitant to say that all-time highs will be broken soon, but if the PMO can get back above its signal line, I would then look for new all-time highs.
Conclusion: The Dollar is struggling and that is helping Gold resume its rally. Last week saw a jump in the VIX and short-term corrections which will typically help Gold. These new signals could be representative of caution or concern with a bear market. However, with the SPX generating a new STTM BUY signal, new optimism may have arrived. If investors become less nervous, Gold could lose favor as it is widely considered a "safe haven" in rough markets.
Technical Analysis is a windsock, not a crystal ball.
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