Indigestion Day, TGT Earnings, Gold Miners Find Support

March 3, 2021 at 3:08 am  ·  Category: Fundamental Analysis, Gold, Market Commentary, Stocks, Technical Analysis, Twitter, YouTube

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You know it’s been a tough tape when wizard short term trader and technician Scott Redler calls it “tricky” and says “if you’re having a tough couple weeks, you’re not alone”. Beyond saying it’s been a tough tape, in the above tweet from after the close yesterday Redler says that Tuesday’s low of 3,868 is now the first level of support followed by 3,789-3,805. With the S&P and NASDAQ Futures currently up 0.7% and 0.8%, respectively, it appears that 3,868 will hold for today.

The reason I’m talking about support is because the market was unable to follow through on Monday’s rocket ship higher. In fact, a nasty selloff in the last 50 minutes resulted in a significant down day with the S&P -0.81%, NASDAQ -1.69% and Russell -1.93%.

The NASDAQ, the leading and most important index IMO, closed just 25 points above its 50 DMA.

Technical damage was also done to the S&P which closed below its 21 DMA.

While it appears like today will put the bulls back in charge, there’s a long way to go. Let’s see what happens.

Next, I want to discuss Target (TGT, Market Cap $88 Billion) earnings. TGT reported an excellent quarter Tuesday morning with Comps +20.5% and Adjusted EPS +58% to $2.67.

However, they did not provide guidance about what things will look like in 2021 as we move toward a post-pandemic world and investors sold shares off to the tune of 6.77% on more than 6x three month average volume. As a result, TGT closed well below its 50 DMA and is now in technical no man’s land.

Lastly, I want to discuss the gold miners in which I increased our position by more than half during last Friday’s weakness and which now make up 50% of our portfolios.

Shane Murphy pointed out Monday evening that the main gold miners ETF (GDX) was at prior resistance which should now act as support. And in fact it did yesterday with GDX rallying 3.43% to $31.96 and the junior gold miners ETF (GDXJ) +3.51%.

It’s been a tough 7 months for gold investors with the metal dropping almost 16% from a $2051 close on August 5, 2020 to a a current $1727. Investors, especially younger ones, have shifted into Bitcoin as a hedge against fiat currency devaluation and the “barbarous relic” has faded into the background. However, I’m still a believer in gold as the proven and best store of value in the event of inflation which the Fed’s radical monetary policy is starting to cause and can be seen in rising interest rates and surging commodity prices.

Posted by Greg Feirman  ·  Trackback URL  ·  Link