Silver Channel Sunday Newsletter October 6, 2024

Index (ETF): S&P 500 (SPY)

Time Frame: Weekly Chart

Stock Price Above / Below:

• 33 Week Simple Moving Average: Above

• 60 Week Simple Moving Average: Above

• 200 Week Simple Moving Average: Above

RSI above 50: Yes, 65.80

MACD Positive | Neutral | Negative: Neutral

Comments: S&P 500 (SPY) Seems to have stalled. Just short of all time highs, SPY has run up against resistance. RSI has found resistance as well as has the MACD. I relate behavioral patterns like this to the Three Strikes Your Out rule of baseball. Another week of closes off the weeks high and below the previous week says to me consider walking to the bench to think this through.

Index (ETF): Gold (GLD)

Time Frame: Weekly Chart

Stock Price Above / Below:

• 33 Week Simple Moving Average: Above

• 60 Week Simple Moving Average: Above

• 200 Week Simple Moving Average: Above

RSI above 50: Yes, 77.91

MACD Positive | Neutral | Negative: Positive

Comments: Gold like SP500 closed in a similar range as last week. Actually, a bit more of a “indecision” kind of close for the week. The RSI is still in strong territory yet is “rounding” as well as the MACD, but not as much. Keep an eye on the RSI for strength of the momentum.

Index (ETF): 7-10 year US Treasury’s (IEF)

Time Frame: Weekly Chart

Stock Price Above / Below:

• 33 Week Simple Moving Average: Above

• 60 Week Simple Moving Average: Above

• 200 Week Simple Moving Average: Below

RSI above 50: Yes, 52.82

MACD Positive | Neutral | Negative: Positive, but continuing to weaken

Comments: The 7-10 year US Treasury’s (IEF) had a bad week. RSI, as I said last week, was weakening. This week, it’s face planted! MACD is still positive, yet it is faltering. What happened? Jobs numbers could have played a part, yet this was a negative 1.95% dumpster fire in bond terms. In my opinion, this could be concerning for bonds if this continues this week. Remember, Three Strike Rule.

Index (ETF): 20 year + US Treasury (TLT)

Time Frame: Weekly Chart

Stock Price Above / Below:

• 33 Week Simple Moving Average: Above

• 60 Week Simple Moving Average: Above

• 200 Week Simple Moving Average: Below

RSI above 50: Yes, 50.17

MACD Positive | Neutral | Negative: Neutral

Comments: Similar to 7-10 year US Treasury (IEF), the 20+ year US Treasury (TLT) is behaving similarly. RSI took a dive to that 50 line.  A break below says to me that momentum behind TLT is running out of gas.

Index (ETF): iShares Core US Aggregate Bond ETF (AGG)

Time Frame: Weekly Chart

Stock Price Above / Below:

• 33 Week Simple Moving Average: Above

• 60 Week Simple Moving Average: Above

• 200 Week Simple Moving Average: Below

RSI above 50: Yes, 55.29

MACD Positive | Neutral | Negative: Positive, weakening

Comments: iShares Core US Aggregate Bond ETF (AGG), I’m including AGG because it represents the corporate bond market. Like IEF and TLT, AGG is weakening as well. RSI is feeling the signs of gravity as is the MACD. One week does not make a trend. Three weeks represents a trend with a fourth week to confirm the trend.

Index (ETF): Developed Countries (EFA)

Time Frame: Weekly Chart

Stock Price Above / Below:

• 33 Week Simple Moving Average: Above

• 60 Week Simple Moving Average: Above

• 200 Week Simple Moving Average: Above

RSI above 50: Yes, 57.38

MACD Positive | Neutral | Negative: Neutral

Comments: EFA ETF closed down for the week, $82.55 compared to its open at $83.96. The open was short of the week’s high of $83.97.  RSI was down as well and the MACD was neutral for the week.

Index (ETF): Emerging Markets (EEM)

Time Frame: Weekly Chart

Stock Price Above / Below:

• 33 Week Simple Moving Average: Above

• 60 Week Simple Moving Average: Above

• 200 Week Simple Moving Average: Above

RSI above 50: Yes, 67.70

MACD Positive | Neutral | Negative: Positive

Comments: Emerging Markets close the week up .77% for the week. RSI was positive at 67.70. EEM’s RSI has been here before. The weeks of May 13, 2024 and July 8, 2024 both saw retreats the following weeks but moved higher to the point we are out now. This could be an indicator of a weak week ahead. Possible retest of the 200 week SMA.

Conclusion

We are at a point in time where the Teeter-Totter is evenly weighted.  What direction are we headed next?  Will equities continue their trend higher or will there be a sizable risk off move towards high grade bonds and gold?  Earnings season is upon us and could be the catalyst to determine where markets go.  Guidance will be the key focal point.  Guidance will create confidence or worry.