Don here...
Gold just went parabolic while the dollar stayed flat.
That shouldn't be possible.
It's making me nervous.
Everyone's focused on the government shutdown...they're watching Tesla explode higher on 2.5 million option contracts…they're celebrating the S&P grinding toward new highs.
Meanwhile, gold is screaming something completely different.
We're talking about a move from $3,400 to $3,900 in six weeks. That's a 45% gain year-to-date.
And here's what makes this truly alarming: the dollar isn't getting crushed. It's relatively flat.
When gold moves like this independent of dollar weakness, it's not an inflation play. It's a risk hedge.
A duck and cover trade.
Gold is rarely wrong.
I break down the specific divergences flashing warning signs right now:
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Financials getting hammered while markets rally
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JP Morgan showing precipitous sell-side activity
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Consumer staples (Walmart, Costco, Target) all taking hits
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Volatility refusing to back down despite markets up 25 handles
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Advance-decline line negative while indexes grind higher
The psychological impact of the shutdown is bleeding through to specific sectors.
But the AI trade? It doesn't care.
Nvidia spending money on Core Weave. Core Weave spending money on Nvidia. The circle of life continues while traditional market indicators flash red.
If you own the S&P 500 in any form right now, you need to see what gold is telling us. Whether you hold individual stocks, ETFs, or have a Vanguard 500 in your 401k, this parabolic move in gold demands attention.
The SPX expected move sits at $87 this week. We're just a hop, skip, and jump from the upper edge at 6730. But with these divergences piling up, that technical level might be the least of our concerns.
I also spotted something unusual in Alibaba. Four consecutive weeks of breaching expected moves. The options market has gotten it wrong four times in a row. Plus, the implied volatility skew is completely inverted. This could set up for a wild trade in the next couple of days.
👉 Click here to watch me break down why gold's move should have you on high alert
To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE
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