The market is acting as if things have changed. The market is saying that we are in a recovery and that the risk of financial oblivion is in the past now. It is claiming that the banks are safe again. Gold is less needed than before, the market is saying by pummeling the gold and the metal stocks. Is it over the longer term? It would seem not, given the fact that the Euro solution was to print massive amounts of Euros to save the Euro. So be on alert for a market timing reversal in gold, other metals, and metal stocks. It may not come for weeks or months, but unless the central banks change the game, it will come. Just be sure to demand real strength prior to making those purchases. Corrections often go deeper than we think possible.
The other weak market is Treasuries that have declared a down trend. If the stock markets correct, will Treasuries benefit this time? Or is the Treasury sell-off wagging the dog (the stock markets)? (added 4-10-2012: apparently yes as we saw yesterday!)
Finally, small cap stocks and foreign markets are also pointing down at the moment. (added 4-10-2012: yes, kept falling yesterday)
Even the stronger markets are already showing signs of topping on a market timing basis. My take is the same as last week. The market is ready to pull back on less than spectacular earnings and/or forward expectations. But is it true that the economy actually still slowing after GDP peaked in Dec. 2010? Earnings season begins this week, so we’ll finally get the answer.
Have a look at the charts from this week as well. They are listed on my “feed page” here:
Market Timing Chart Links Here
Enjoy your week!
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