Cycles along with geopolitical conflict suggest Gold strength

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US Equity markets technically look to have bottomed and are slowly progressing off early October lows.  Both US Dollar along with Treasury yields have backed off in recent days following last weekend’s attack on Israel.  The expansion in breadth and broad-based nature of many lagging sectors turning higher to break out of 1-3 month downtrends in recent days looks constructive technically, and lends support to a further October rally. 

Treasury yields and US Dollar have continued their recent descent this week, which given recent correlation trends should further fuel a stock rally in US stocks.  Many formerly deteriorating sectors have begun to stabilize and turn higher in a fashion that makes some mean reversion likely this month.

Notably, Regional Banks, Transportation stocks, Consumer Discretionary as well as Small and Mid-cap issues look likely to show absolute strength in October following a difficult period in August and September.

Technically it’s not wrong to say that the pattern and breadth of this recent advance has been bullish over the past few days.  The impulsive manner of this week’s advance managed to exceed former August lows at 4336 and has done so on an expansion...
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