We Are Crushing the Gold Trade & Laying Out the Week

The world is lining up to support Ukraine and punish Russia

Technical Edge

• NYSE Breadth: 80.9% Upside Volume (!)

• NASDAQ Breadth: 77% Upside Volume

What a powerful two days it has been. The S&P 500 has gained 6.6% from Thursday’s low, while the Nasdaq has jumped 8.8%. The move in the futures has been slightly more extreme. What’s unfolding in Eastern Europe is sad, scary and so incredibly unfortunate. 

I am not a geopolitical expert by any means, but we can see what happens when egos get in the way of rational decision making. Our hope here is that we can go back to simply worrying about inflation, rate hikes, supply chains and Covid. 

Until then, the world is collectively backing Ukraine, support the country and its leaders and raining sanctions down left and right on Russia’s banking system, economy and oligarchs.

Game Plan

We had a nasty gap-down in U.S. equities overnight and a huge gap-up in crude oil. So far, those moves are relaxing a bit, with the ES and NQ futures down about 1% and oil up 4.5% (vs. up 8.2% at the high) and fading from ~$100. 

With a wide range already set, we need to see where the momentum rests. Does February get one last day of “oomph” on the upside? 

Gold

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Even if we exclude everything else in this newsletter, the trades we’ve had in gold make it all worth the price of admission, IMO. The rejection off ~$1961 resistance, then support at ~$1880 and the 10-day have played out beautifully. 

From here, I want to see