Precious Metals at Key Levels: Technical Analysis

Key Concepts

Oracle Earnings: Disappointing revenue and rapidly rising capital expenditures led to a significant stock price drop.
AI Builders on Time Cover: The appearance of AI builders on Time magazine's "Man of the Year" cover is viewed as a potential "cover curse" indicator, suggesting a peak in public saturation and potential market downturn for related stocks.
Market Performance: The broader market (SPDR) is near lifetime highs, while NASDAQ is affected by Oracle's performance. The Dow Jones Industrial Average (Diamonds) has reached a lifetime high.
Broadcom Earnings: Upcoming earnings report from Broadcom is a key event that could influence the market, particularly the tech sector and the NASDAQ.
Precious Metals Bull Market: Gold, silver, platinum, and palladium are showing strength, with gold approaching its lifetime high and silver and miners reaching new highs.
Gold Price Gap: A significant price gap in gold is identified as a key resistance level that needs to be overcome for further upward movement.
Silver's Performance: Silver has experienced a prolonged period of consolidation followed by a significant rally, with its ETF (SLV) also reaching a lifetime high.
Palladium and Platinum: Palladium is trading below its lifetime highs but shows potential for a catch-up rally, while platinum's ETF is also showing gains.
Bitcoin Performance: Bitcoin is described as "doggy" and underperforming compared to precious metals, with a significant resistance level identified.
Bonds and Interest Rates: Bonds (TLT) are showing bearish signs, suggesting potential weakening and rising interest rates.
Homebuilders (XHP): Homebuilders are presented as a potential short-sale idea if interest rates begin to rise.
Broadcom (AVGO) and SMH: Broadcom's upcoming earnings are a major focus, with its ETF (AVGO) showing strong performance. The Semiconductor ETF (SMH) recently hit a lifetime high.

Market Overview and Oracle's Impact

The market is generally higher, with the exception of the NASDAQ. This is primarily due to Oracle's earnings announcement after the market close yesterday. Oracle reported rapidly rising capital expenditures and slightly disappointing revenue, leading to a significant sell-off in its stock. Oracle has lost nearly half its value from its peak on September 11th. While a biotech company losing half its value might not be a major concern, for a company of Oracle's size, this decline is described as "astonishing." Despite this, the overall market is near or at lifetime highs, and this event is not significantly impacting it. However, it has caused concern within the tech sector and the broader AI space.

The "AI Builders" Cover and the Cover Curse

Adding to the market sentiment, Time magazine announced its "Man of the Year" as AI builders, featuring individuals like Sam Altman, Elon Musk, and Jensen Huang on the cover. The speaker draws a parallel to the "cover curse" in financial history, citing examples like Sam Bankman-Fried and Elizabeth Holmes appearing on Forbes covers at the peak of their careers. The argument is that when a person, fad, or sector reaches public saturation, it often appears on the cover of a major magazine, which can precede a downturn. The AI builders' appearance on Time's cover is seen as a potential bearish signal for hyperscalers, AI-related stocks, and Nvidia. The timing of Oracle's plunge on the same day is noted as ironic.

Broader Market Performance and Key Catalysts

SPDR (SPY)

The SPDR, representing the broader market, is heading towards a lifetime high close. While it has reached a lifetime intraday high on October 29th, a closing record is still within reach.

NASDAQ (QQQ)

The NASDAQ has been weakened by Oracle's performance, although it has also bounced off its intraday lows. A key factor to watch is the unsealed price gap. The speaker suggests that if Broadcom performs well this evening, it could help the market reach new highs and potentially close this gap. Conversely, if Broadcom "pulls an Oracle," the gap could widen, leading to further declines. With limited economic data and the Federal Reserve's actions concluded, earnings reports, particularly Broadcom's, are the primary drivers for market movement.

Dow Jones Industrial Average (DIA)

The Dow Jones Industrial Average (Diamonds) is performing very well, having reached a lifetime high. It has surpassed its previous peak from November 11th, trading up 1.39% to 1.4%.

Precious Metals: A Potential New Leg of the Bull Market

Precious metals are a favored topic, and the speaker believes they are at a critical juncture, potentially starting a new leg of their bull market or experiencing a temporary peak.

Gold (GLD)

Gold is showing significant movement, up $7.21 (1.7%) in the front month. After a period of dullness, it is now vaulting higher, approaching its lifetime high from October 20th. This strength is attributed to a potential weakening of the dollar. The speaker has been bullish on precious metals since the summer of last year, noting the strong performance of silver, gold, platinum, palladium, and miners.

A key technical level for gold is a price gap that was almost touched today. Conquering this gap is crucial for further upward momentum. The speaker also identifies a "cup with handle" pattern, suggesting potential for gold to move higher after being stalled since October. Another gold ETF, UNZ, also shows a similar gap that was not fully sealed, indicating more work is needed.

Miners (GDX, GDXJ)

The precious metals miners are performing exceptionally well. GDX has blasted to lifetime highs, surpassing its previous peak from October 16th. It has completed a "cup with handle" pattern. Junior miners (GDXJ) have also reached lifetime highs. The broader metals and mining ETF, XME, is also having a good day, though not at lifetime highs.

Silver (Futures, SLV, SIL)

Silver is described as a "monster" performer. The speaker recalls being "hung up" on silver last year, noting its prolonged and frustrating base formation. After a breakout in May of last year, it experienced a period of consolidation for nearly 11 months before a significant rally, moving from the mid-20s to approaching $70. The speaker mentions buying silver coins at Costco for $32, which have now more than doubled in value to $75. The silver ETF (SLV) has also reached a lifetime high and shows a continuation pattern. The silver miners ETF (SIL) is also at a lifetime high.

Palladium (PAAL, PALU)

Palladium is up $43.5 (almost 3%). The ETF (PAAL) is showing some nervousness. The speaker expresses concern that if gold and silver start to sell off, palladium could slump back into its trading range. However, if gold breaks past its gap and miners continue to rise, palladium could see a significant breakout. Palladium is trading well below its lifetime highs, and the speaker anticipates it will play catch-up.

Platinum (PPLT)

Platinum's ETF (PPLT) is up 2.27%. It has a price gap acting as support.

Digital Assets and Bonds

Bitcoin

Bitcoin is performing poorly, down $1,545 and trading just above the low 90,000s. Compared to gold and silver, it is described as "stinking" and is at a "rotten time" since its peak on October 6th. The speaker reiterates that 98,000 is a significant resistance level for Bitcoin, even if it rallies.

DeFi Development

DeFi development continues to sink, down about 3% today. This is attributed to a clean right triangle pattern that has consistently slipped.

Bonds (TLT)

The bond ETF (TLT) is down slightly and appears bearish. The speaker anticipates bonds will weaken and interest rates will rise.

Potential Short Sale Idea: Homebuilders (XHP)

If interest rates begin to creep up, homebuilders (XHP) are presented as a potential short-sale idea, despite not having the cleanest chart pattern.

Upcoming Earnings: Broadcom (AVGO)

All eyes are on Broadcom's (AVGO) upcoming earnings report. The speaker admits to having little to say about the chart itself, other than acknowledging its significant rise and robust performance. It is described as an "extraordinary success" and "very stable." The speaker would be surprised by any weakness in Broadcom given its past performance, but it is the key event everyone will be watching.

Semiconductor ETF (SMH)

The Semiconductor ETF (SMH) reached a lifetime high yesterday and is currently showing a "hammer" candlestick pattern, indicating potential indecision. The market is waiting to see what Broadcom's earnings will reveal.