Hawks vs. Doves

Ahead of the big FOMC decision whether to raise rates to stand pat, along with plenty of rhetoric as a side dish, precious metals and miners are rallying. Perhaps this may very well be a sign that "someone knows something." But is could just as easily be setting up a "sell the news" reaction. 

So, gamesmanship is typically a fallacy for these types of situations. 

What we do know is that the precious metals and miners have largely been consolidating since July, frustrating bulls and bear alike during that time as summer wound down. 

In reality, this complex often features multiple head-fakes and whipsaws on "Fed Days" which we often see in equities, fixed income, and currencies. So, again, gaming The Fed seems to be a bit of an exercise in futility. 

With this in mind, pulling back for some perspective makes sense. 

On the weekly chart for the silver ETF, below, note how the metal has been basing under its declining 200-period weekly moving average (yellow line). All things considered, this has been a fairly constructive consolidation off the explosive winter rally from potential multi-year bear market lows. 

After giving the complex some space to pause since July, I suspect we will finally get the next big move before the holidays to conclude 2016. Bulls have the ball, overall, in terms of the intermediate-term initiative. But they ought not waste too much more time from here on out, regardless of the FOMC's actual decision and bias. A move back over $20, specifically, should set in motion the next leg higher for silver, while losing $17 below would be a sign of caution. 

More on all markets in my usual Midday Video for Members.