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Critical Juncture and Implications for PM Sector

Source: Clive Maund

May 22, 2023 ( Newswire) Technical analyst Clive Maund reviews the 1-year chart for the Dow Jones Industrials and the 1-year chart for the S&P500 index to show you where he believes the precious metals sector is headed.

The broad stock market continues to look like it is topping out here following a bear market rally, and it is easy to see how it could drop if the Fed maintained rates at their current relatively high level or even raised them in accordance with the plan to wipe out all the smaller banks and consolidate their assets into the biggest banks to facilitate the implementation of the CBDC (Central Bank Digital Currency) banking system.

On the 1-year chart for the Dow Jones Industrials, we can see how the market has formed a line of descending tops beneath the resistance level shown in recent months and looks set to drop from the latest peak.

Any significant decline from here would quickly roll the moving averages over from their current modestly positive alignment into a bearish alignment. The bearish implications of this chart would be mitigated if it should succeed in breaking above the key resistance, which is viewed as unlikely.

While the 1-year chart for the S&P500 index looks somewhat better than that for the DJIA, it doesn't exactly look great either.

After what is believed to be a bear market rally from the October low, the market looks like it is rolling over in readiness to drop, with upside momentum fizzling.

Note that trading volume and the Accumulation lines have been omitted from both these charts because the volume is next to useless on these index charts, and the Accumulation line is notoriously unreliable, and it is suspected that it may be rigged somehow.

We have observed over the past couple of weeks how the precious metals sector is set up to correct hard, and if the broad stock market does drop steeply going forward we can expect the PM sector to get dragged down with it, but such a correction in no way detracts from the stellar prospects for the sector once this immediate corrective phase is done.

More Info: Newswire

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