The bears are in control of the U.S. equities markets, driving values south in almost every sector. For the session, the DJIA has lost 450, S&P 500 is off 40, and the NASDAQ has fallen 130. Simply put, sentiment is negative and traders are beginning to take risk off of the table in large quantities. The result has been a nice rally for gold.

In earlier updates, we alluded to slumping Apple being the biggest story on Wall Street. This phenomenon has continued throughout the trading day. At press time (about 1 PM EST), Apple stock is down -8.4%, prompting analysts to call it the “darkest day in the iPhone era.” The negative action is creeping into the trade of many other stocks as investors are evaluating the potential implications of the U.S./China trade war for 2019.

February Gold Futures: Technical Outlook

In a Live Market Update from Wednesday, I broke down the technical outlook for February GOLD futures. Today has brought the bullish scenario into play, driving price to a test of macro topside resistance.

Given the chaos in equities, bullion has posted nice gains to open 2019. Bids have consistently hit the markets and a rally to 1300.0 appears probable for the near future. Here are the two levels I will be watching closely as we wrap up the trading week:

• Resistance(1): 50% Retracement of 2018’s Range, 1292.9
• Resistance(2): Psyche Level, 1300.0

Overview: Earlier in the session, gold put in a hard test of the 50% Retracement of 2018’s Range. In the event that the current intrasession high holds (1294.3), a position short will be in the offing for tomorrow’s session.

However, gold is showing signs of life and a run toward 1300.0 appears probable at this point. More than likely, this market is going to have to settle down a bit and give a clear signal of trend exhaustion before any short position can be justified.