Big picture on stocks
The S&P 500 (SPX) closed last week at all-time highs, and the move is confirmed by market breadth. The New York Stock Exchange advance-decline line also hit all-time highs, which backs up the price strength in the index. What stands out is that this happened without the "Magnificent 7" mega-cap tech names making new highs. An ETF tracking those seven stocks is consolidating just below its highs. Strength is being driven by wide participation, not by the AI narrative. If the Nasdaq and the Mag 7 join the rest of the market, that adds more fuel. From a trend view the market looks bullish. Small caps are trading near or at record levels. Nvidia (NVDA) earnings are due at the end of next week.
GSG - broad commodities
The iShares S&P GSCI Commodity-Indexed Trust (GSG) gives broad exposure across energy, agriculture, industrial metals, and precious metals. Commodities are now showing up across momentum work. GSG is consolidating right around the levels seen in 2012-2013, all above a rising 40-week moving average, so within a longer-term uptrend.
Commodities are likely still very underowned in strategic portfolios. The old teaching covered three asset classes - stocks, bonds, and commodities. From about 2011 until recently, strategic portfolios held mostly just stocks and bonds. If commodities keep rallying and build on the momentum in the models, there is an opening because the group is underowned.
Commodities matter as a diversifier because they can be far less correlated to stocks than other products. On the chart GSG shows repeated highs near 3450, with highs slightly beyond that just under 35. A downward-sloping trend line and an upward-sloping shorter-term line form a triangle, which narrows the price range and lowers volatility. Low volatility often comes before high volatility when a breakout hits. Price may be starting to push up. The area to watch is 3350, another recent high. On the downside, 3140 and 3040 are notable recent lows. The 5-day EMA near 3241 sits closest to price and lines up with the downward trend line, so old resistance could turn into new support, matching the short-term moving average. RSI is still trending up; a push above 70 plus a break above old relative highs would be more bullish. Volume profile shows a small pocket near 34 and a larger node with two spikes near 31 and 32. On the session GSG was up almost 0.9%.
PHYS - physical gold
The Sprott Physical Gold Trust (PHYS) lets you own gold without storing bars at home. A key point on diversification: what diversifies equities changes over time, and the main driver of shifting correlations is inflation. With CPI above 3%, the bonds in a portfolio may not be diversifying equities the way people assume, which pushes the case for holding commodities.
PHYS is moving higher again after a 38.2% Fibonacci retracement of the 2022-to-2026 rally. It has retaken the 50-day moving average, a first step in rebuilding the uptrend, and now has to deal with its 200-day moving average as it tests it from below. There is work to be done at a key level, but odds favor a continuation higher.
On the chart, a sharp rally came off a repeated low and is now touching resistance. A push above that resistance could set off a cascade of breakout orders. The prior high was 4207. Price recently broke out to the upside and the trend has started to shift. A small gap area marked the recent closing-price lows where price firmed up and bounced. Gaps to watch on the way up: 3140 and 3240 (gap openings that often get filled), 3360 (a gap that closed), then highs after a gap-down at 3475 and 3523. Price broke through the short-term white trend line with no collapse and is sticking to the 5-day EMA at 3323. Three more EMAs - 1 month, one quarter, and one year (2163 and 251 among them) - converge near 32, another key area. RSI is close to 70; a push into overbought is often read as strength in a trending market. Volume profile shows the heaviest activity at lower levels near the point of control at 3043, current action in the 3280-3420 zone, and notable nodes at 35 and 36-37. PHYS was up 1.1% on the day.
GDX - gold miners
The VanEck Gold Miners ETF (GDX) gives operational leverage through owning mining businesses for those who do not want to trade gold directly. Gold miners came off their best Q2 ever with strong profits, even though gold itself had a pullback. After a 40% decline, GDX has resumed higher and has already reclaimed its 200-day moving average, unlike PHYS. There have been multiple upside gaps in August alone.
Two reasons this matters: GDX seems to be rebuilding its longer-term uptrend, and stocks are discounting mechanisms that often move ahead of the physical commodity they are tied to. Gold mining stocks tend to move ahead of gold, so GDX already being above its 200-day raises the odds that PHYS will follow. Nothing is guaranteed, but this uptrend looks more established near-term than PHYS.
On the chart a downward-sloping trend line gives a shape similar to PHYS, with a firming at the lows near 72-73 then a push up, but through a sharper, narrower channel with the two white lines close together. Price broke out above them with no drop, and is pushing up again. Levels: a gap near 94, highs after a gap near 90, relative lows near 87, another gap near 84. On the upside, 99 and 101 stand out as hurdles for the bulls. The 5-day EMA comes in near 90, with a more spaced-out confluence around 80 to 83.50. RSI is the strongest of the three, just below 70; a push above that would be another bullish signal. Volume nodes sit between 95 and 101.50 and between 85.50 and 89. GDX was up more than 2.5% on the session, with gold higher on a weaker dollar.
