A quick update on the market after a historic rally; caution is advised.
VanEck Vectors Gold Miners ETF
Gold miners have retraced 61% of their drop and are also on the old support area from 2019. The next few days will determine whether we can go towards the old highs or if this will cause a selloff from here.
Silver
The silver chart looks almost identical to the gold miners. Having retraced 50% of the drop it too sits a stone’s throw away from old support now turned resistance caution is advised.
S&P500
The S&P500 has now retraced 50% of the historic drop of the last 2 months… this is an area that was support in 2019. Longs should lighten up here and hope to buy a pullback. The more adventurous can build a bearish put spread using the may contract Long 265 put short a 240 put.
Volatility Idex
We noted a falling wedge formation on the VIX. A bullish break from this formation could coincide with a larger scale pullback on equity markets.
*Please note that these trade ideas form part of a larger weekly plan and the value of financial products can increase as well as decrease over time, depending on the value of the underlying securities and market conditions. The risk of loss arising from trading in Contracts for Difference can be substantial. You should carefully consider whether such investments are suitable for you in the light of your circumstances and financial resources.
