Headlines
- Massive Gains for Precious Metals ETFs
- Gold and Silver Surge, Yet Again
- Gold and Silver Miners Go Parabolic
- Copper and Base Metals are in Uptrends
- SRUUF Bounces off Retracement Zone as URA Surges
- Bitcoin ETF Consolidates above Breakout Zone
The next report will be the Friday Chart Fix (24 Oct).
The next Premium report/video will be on Tuesday, October 28th.
Today’s report starts with bonds because these safe haven assets are trending higher. Bonds have yet to start outperforming stocks, but traders should watch this relationship for clues on the risk appetite for stocks. Precious metals were rocked this week as gold, silver and their respective miners fell sharply. While impossible to time, the warning signs were there with parabolic moves since August. Copper and Base Metals remain in uptrends with CPER forming a short-term bullish continuation pattern. Uranium ETFs are following the precious metals playbook and Bitcoin hit a make or break zone.
7-10Yr TBond ETF Extends on Breakout
The 7-10Yr TBond ETF (IEF) is in a long-term uptrend and taking the lead as it recorded a new high for 2025 this week. ETFs hitting new highs are stronger than ETFs not hitting new highs. Note that this is also a 52-week high because it exceeded the high on October 21, 2024. Long-term support is set in the 95-95.5 area. The most recent short-term signal is the Raff Regression Channel breakout on October 10th.
The bottom window shows the IEF/RSP ratio crossing below its 200-day SMA in May and remaining in a downtrend the last five months. This means bonds are underperforming stocks. Put another way, stocks (risk assets) are outperforming bonds (safe haven assets). This is bullish for stocks, but we should watch this relationship closely because the ratio edged higher in October and a breakout at .528 would signal relative strength in bonds (safe haven assets). This would be negative for stocks (risk assets).
The next chart shows the 20+Yr TBond ETF (TLT) reversing its downtrend with a big breakout in early September. TLT broke the summer highs and the 200-day SMA. The ETF consolidated above the breakout with a pennant and broke the pennant line on October 10th. Follow through was strong with a 2.85% gain the last nine days. The bottom window shows the TLT/RSP ratio falling from May to August and edging higher since early September. A breakout at .50 would show TLT (bonds) outperforming RSP (stocks).
Gold and Silver Enter Correction Phase
The Gold SPDR (GLD) finally got its pullback with a 6.43% decline on Tuesday. Even though this is the largest one day decline since April 15th 2013, it is not enough to reverse the long-term uptrend. GLD is still well above its rising 200-day SMA. However, this outsized decline destabilized the uptrend and likely signaled the start of a corrective period. Notice that GLD advanced 32% in 82 days at the beginning of the year and a correction started after the blow-off top on April 21st (+15% in 9 days). GLD was clearly overextended after a 32% run in 43 days, and a 10% 7-day surge (October 9th to 20th). Again, the long-term trend is still up and GLD is leading. This means that a correction or pullback could lead to the next opportunity. It is time to monitor price action and patiently wait for the next setup.
The Silver ETF (SLV) ended its parabolic advance with a 10.76% decline the last four days, and wiped out the gains from October 6th to 16th. Parabolic advances typically end with sharp declines. As with GLD, the long-term trend is up, but this decline destabilized the uptrend and triggered the Chandelier Exit (22,3). SLV is now entering a corrective period – and it may take some time for a tradable setup to emerge. Even though %B and RSI have yet to become oversold, the ETF is short-term oversold after a 4-day 10% decline. This condition could give way to a bounce. Personally, I will let the dust settle and wait for a tradable setup to emerge on the price chart.
Gold and Silver Miners Trigger Stops
The Gold Miners ETF (GDX) and Silver Miners ETF (SIL) went parabolic from August to October and ended these parabolic moves with double-digit declines the last four days. These declines wiped out the gains from October 1st to 12th, and both are now negative for the month. They are short-term oversold and ripe for an oversold bounce, but these declines destabilized the uptrends and triggered the Chandelier Exits. GDX and SIL are in correction mode so I will wait for the next tradable setups to emerge.
Copper and Base Metals are in Uptrends
The Copper ETF (CPER) formed a short-term bullish continuation pattern with eight inside days. First and foremost, CPER is in a long-term uptrend with higher lows this year (dash line) and price above the rising 200-day SMA. After a surge from late August to early October, the ETF fell sharply on October 10th with a 4.42% decline and again on October 14th with a 2.34% decline. The ETF then stabilized with a pennant taking shape the last two days. This is a short-term bullish continuation pattern and a breakout at 31.5 would signal a continuation higher.
The DB Base Metals ETF (DBB) remains in a strong uptrend as it quickly recovered from sharp drops on October 10th and 14th. These declines were news induced and did not affect the long-term uptrends. More importantly, DBB quickly recovered with a surge to 21.35 on Thursday, which is very close to a 52-week high. The last signal was the pennant breakout on September 2nd with this breakout zone turning first support in the 19.75-20 area. I do not see a setup on this chart right now, which means DBB is in the trend-monitoring phase. Time to wait for the next setup, manage any positions and analyze price action.
Correction Extends for SRUUF as URA Takes a Hit
The Sprott Physical Uranium (SRUUF) extended its correction with a decline this week. SRUUF is now down 11.50% in October, but still in an uptrend and just above the Chandelier Exit (65,5). This exit is 5 ATR(65) values below the 65 day high. Even though the 65-day high is unchanged since late September, volatility is rising (ATR) and this is pushing the Chandelier Exit lower (currently 17.22).
SRUUF is at a make or break area now. The ETF surged in August-September and returned to the breakout zone with the decline in October. The pink-blue shading marks broken resistance turning support. SRUUF also retraced around 61.8% of the August-September advance. “Normal” corrections after big moves should find support near the prior breakout and 61.8% retracement. A close below 17.22 would exceed these norms and trigger an exit. The falling channel defines this pullback with resistance marked at 19. A breakout here would be bullish.
The next chart shows the Uranium ETF (URA) falling 8% the last three days and triggering the Chandelier Exit (65,5). URA is still positive for the month, but this decline wiped out the gains from October 2nd to 15th. Note that OKLO accounts for 15% of the ETF and this stock fell 31% the last six days. Mr Market is punishing the meme stocks. This outsized decline in URA destabilized the long-term uptrend. Yes, the long-term trend is still up with price well above the rising 200-day SMA. With the outsize decline, URA is entering corrective mode. It is time to exercise some patience and wait for the next setup to emerge.
Bitcoin ETF Tests Breakout Zone
The Bitcoin ETF (IBIT) remains in an uptrend, but is lagging with two failed breakouts since August. IBIT is down 9.75% the last three months, which makes it one of the worst performing assets over this timeframe. Perhaps this is a correction, but IBIT would not make the cut if using a momentum ranking for selection.
Despite lackluster performance, IBIT is trading at long-term support and the ETF became short-term oversold on Monday. The chart below shows a resistance zone from December to June (pink shading). IBIT broke out in July with new highs in August and October. Despite two failed breakouts along the way, the broken resistance zone turns support in the 60-63 area (blue shading). IBIT fell to this support zone and RSI(10) became oversold with a move to 30.40 on Friday. The ETF bounced on Monday-Tuesday, but fell back on Wednesday. Short-term resistance is at 65 and a breakout here would be bullish. A close below 60 would break support and call for a re-evaluation.
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