| Hello, Fellow ChartWatchers! |
Uncertainty persists, and it’s leaving its mark all over the stock market. While the recent Fed meeting offered little in the way of market-shaking news, investors remain on high alert, with their focus shifting from global trade concerns to developments in the Middle East. This evolving landscape is creating new market dynamics that investors should not ignore.
A quick glance at the Intermarket Analysis panel, which you can find in the Market Summary page, shows that commodities, oil, and gold boast the highest StockCharts Technical Rank (SCTR) scores. The performance chart of the components of the Intermarket Analysis panel shows gold in the lead. Note that TLT, DBC, and UUP are hidden from view.
 But here’s what’s interesting. Gold’s recent upward momentum has stalled after repeatedly hitting a +44% performance. In times of geopolitical tensions, trade disputes, and the potential for inflation — factors all in play right now — you’d expect gold to soar. What’s holding it back? It’s possible we’re seeing some profit-taking as investors sell off recent gold gains. But if the Middle East conflict escalates, gold’s performance could see gains well beyond +44%.
Looking at charts like Gold Continuous Contracts ($GOLD) or the SPDR Gold Shares ETF (GLD), you’ll notice that gold prices are trending higher. However, momentum is somewhat subdued. This could be due to investors waiting for greater clarity on the extent of U.S. involvement in the Middle East.
Meanwhile, oil’s performance has been on a strong upward trajectory, with a +4.75% one-year performance. It’s not close to gold’s 42.16% gain, but oil’s move into positive territory, after spending most of the year in the red, is noteworthy. After hitting a low in May, oil prices started to recover, and the rise accelerated sharply with the news of the Israel-Iran conflict.
As for equities, they’ve delivered a respectable 10.35% over the past year, well ahead of oil’s performance. But equities have been moving sideways recently.
Despite the shifting market dynamics, we’re not seeing strong conviction in any asset group. During periods of heightened uncertainty, it’s difficult to make significant investment decisions. You might consider taking some of your profits off the table and preparing for different scenarios that could play out.
And while you’re navigating the market, why not sharpen some of your investing skills? Tony Zhang of OptionsPlay will be hosting a webinar, "How I Find High-Probability Reversal Setups,” at noon ET on June 24th. This is a great opportunity to learn new strategies for identifying potential market shifts. Be sure to register — you might discover some fresh perspectives on how to approach the market. |
| Have a great weekend! |
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