Is Risk Back On Again?

Gold is the most intriguing of our representative risk-on markets. In fact, spot gold thrust above its series of lower-highs at $1775.27, which neutralized the minor down-trend off of last Friday's high at $1788.80.

Now what?

As long as spot gold remains above $1762 on any forthcoming weakness, we have to give the benefit of the doubt to a new upleg in progress off of yesterday's low at $1737.17. This projects next towards a full-fledged test of $1800, which, of course, is also important for holders of the SPDR Gold Share (GLD).

By comparison, after several hours of uncertainty in the aftermath of yesterday's test of its lower channel line at 1424, the Emini S&P 500 (e-SPZ) spiked to the upside above 1440, which confirmed the end of the previous corrective leg from the July 14 high at 1468.

Now the question is whether or not a new upleg has started, or an intervening rally phase within a larger, more complex corrective period.

A sustained climb above 1446.50 increases the likelihood of the former.