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Open-Ended Rally in Gold, Silver, and Stocks?


Even though the expectation for stimulus was already priced in to a certain degree, precious metals went on a binge.

The analysis of any market is strengthened if different proxies for a given asset lead to the same outcome. In this case, for confirmation (or invalidation of the above) let's now have a look at the Dow Jones Industrial Average's proxy: The DIA ETF (NYSEARCA:DIA).

In the short-term DIA chart, we see the confirmation of the reverse head-and-shoulders pattern – a bullish phenomenon and an indication that stocks will trade higher in a few weeks. This chart, however, does not tell us if the short-term consolidation is over or not. It could be the case that we've seen enough to verify the breakout and have the rally resume, or we could see a short-term decline from here, especially if the USD Index moves higher.
No positions in stocks mentioned.
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