Is it a good time to have money riding on the markets?
Today we chat with Chris about the markets ability to keep afloat. WE can read plenty of positive and negative news but what are some of the most important aspects to keep in mind?
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If you think the reversal in gold was dramatic, Big Al, you weren’t watching Palladium!
True Professor, I was not watching it.
snip:
“The stock market’s internals look very weak and after peaking in April, the NYSE Advance/Decline Line has now fallen to a multi-month low. Moreover, the number of 52-week NYSE lows is staying stubbornly above the number of 52-week NYSE highs and volume is rising on down days. Last but not least, all the major US indices are now trading under the 200-day moving average and both the Dow Jones Industrial Average and the S&P500 Index have slipped to a multi-month low. Despite this awful price action, many analysts and commentators remain oblivious to the looming danger and they are urging their followers to ‘buy the dips’!”
~Puru Saxena
Does anyone else wonder how GDP gets revised up by so much? If they revise it upwards a few minutes or so later, why didn’t they just get the right number the first time? Isn’t it just an attempt to manipulate the trading algorithms?
FRAUD……………..
Yup. Government cookin’ da books. Got to save face….
Ever notice they typically revise them up and not down. I agree Wiseguy, surely there is a whole team of people working on these number. Why not just spend a few minutes to double check before releasing them…Hmmmmm
Regardless…. personally I’m placing less and less importance on the government stats, and more and more am just focused on the charts for direction, turns, and breakouts/breakdowns.
Good luck everyone in their investing and great editorials lately on KER.
Fundamentals always work, but the problem is often lack of full knowledge.
e.g. after many months of small currency movement in the US dollar/pound exchange rate, all of a sudden:
On Tuesday, the British currency rose to $1.5820, its highest level against the dollar since late June. The rally came as investors sold dollars on diminishing expectations the Federal Reserve would raise interest rates for the first time since 2006 at its September policy meeting.
Shortly after touching the high, however, the pound’s momentum abruptly reversed as dollar bulls—emboldened by strong U.S. economic data and the return of risk appetite—pushed the U.S. currency higher, causing the pound to shed its earlier gains.
And on Thursday, the British currency broke below its 50- and 200-day moving averages to trade below $1.54 for the first time in seven weeks.
(from Marketwatch)
This had an effect on gold/silver prices.
Closed the last of my wine position today
+35% total return
http://stockcharts.com/h-sc/ui?s=ADW%2FA.TO&p=W&yr=2&mn=0&dy=0&id=p37660137927
Now if gold and silver can muster a 40% rally, I’ll be closing my brokerage account for ever.
I’m in wine country at the moment, more indulging in my cellar,than stocks.
In your opinion, what is the best local Zin down there. My vote goes to Segesio.
CFS – I agree on having a nice bottle of wine to indulge in versus indulging in the stocks, but thanks for posting the chart Irwin. Honestly, I probably should invest in some of the winery/brewery stocks as they tend to stay in vogue through all times.
Haven’t had a sip of wine, beer or any other alchy-bev yet this year. With Sept coming up, the excuse for a beer on a hot day is growing weaker; I don’t do Christmas, so no excuse for wine there.
I seem to get a pretty good buzz taking profit occasionally – prolly a gambling problem!
Ha! Well, I’ve been giving my liver a rest lately also (actually I’ve doing a cleanse).
Having said that, I really enjoy a cool refreshing beer after cutting the grass outside, and have always enjoyed having a glass or two of a good wine at dinner.
Yes, the profit buzz is quite a rush…..I’m a bit of a gambler myself….. I was at the grocery store last weekend, and locked in to the scratch off lotto tickets for kicks and was there 2 hours and scratched off hundreds of cards (and ended up netting about $270 in profits). Before I left there was a small crowd asking if I had a “system”. Strangely enough, I was using a system, but I told them it was random chance….. Then I went out to eat with my lady and didn’t even cook any of the groceries, so I may just be bat-crap crazy…..
Good story on the scratch tickets. My track record with lotteries is only slightly worse than my PM investing 🙁
Come the weekend I may post a health video or two – might be a lot of interest in the topic.
Sweet Irwin.
What is oil up to today folks – has it bottomed? Seems that oil and oil related stocks are up strongly?
I thought we were going to mid 30s? Shouldn’t oil go down as the USD goes up? What am I missing?
Can’t answer your exact question, but without a doubt, there’s enormous short covering taking place.
Let er rip! As usual everyone was on the same side of the boat.
That is interesting Silverdollar – so you reckon this is someone short covering? Presumably they think that oil is going to turn if they are covering shorts in oil?
I don’t play that game myself, but put yourself in their shoes. They sold all the way down in the low 40″s through $39 into $38 and then while they were congratulating themselves, someone else started buying (maybe for the reason you mentioned). Then the shorts began buying to protect those profits. I’d bet many didn’t make it and had losing trades. JMO.
Good analysis Silverdollar. I do agree with A Listener that in general the dollar has been falling, and a falling dollar is typically not going to hold commodities back. There is not always an inverse correlation between Oil/USD but they have more of a correlation than Gold/USD in general. As noted on Mon/Tue/Wed and today, there was strong support at $38 (that we’d been waiting on all year as a potential bottom) and Oil definitely bounced there. Whether it may go down and retest that level for a dip into the mid-$30’s remains to be seen. $38 may well have been the Major bottom though….. I want to see the Friday close and Monday open in Oil for more confirmation, but if this is the bottom, then I expect a gradual climb back up over time.
Chris:
Thanks for mentioning FCX yesterday. You said you wouldn’t buy it yet but a lot of people did today, including myself. Thanks again.
Both Freeport and Teck took the elevator ride up today.
It is a coinflip as to whether they actually have hit bottom but my instincts are these are two stocks we don’t need to worry much about. They were both so close to their long term bottoms it hardly matters one way or another.
Agree. Doesn’t really matter.
Agreed. It really looks like between Oil, the soft Agricultural commodities, and some of the commodity conglomerates that we are getting very close to the bottoming process in the whole basket. Obviously they won’t all bottom at the exact same time, but I’m likewise watching RJA and JJA for more clues.
JJA has strong support at $33.44 from Dec of 2008 trough. We’re dang close right now.
Venezuela has asked OPEC for an emergency meeting about a production cut – that is why oil is up so massively today.
http://www.kitco.com/charts/popup/au24hr3day.html
Please note country differences.
Recently typically London has been selling gold, and when that selling stops, US buying picks up the price a bit.