Apr. 8th
Stocks:
I don’t have a lot to add today. So far the swing high is still intact and all short term indicators are again overbought. Meanwhile breadth is starting to deteriorate again. New highs – new lows fell big today despite the positive close. The McClellan oscillator also dropped despite the rally. Quite often these small little moves in the NYMO precede a big move in the market. Another minimal move again tomorrow will most likely lead to a big surge in volatility next week as we entering earnings season. Returns have been fairly poor anytime the market enters earnings season at new highs. The average maximum loss is almost -5.5%. I know this market is trying our patience, but everything continues to suggest that our patience will be rewarded with a much better buying opportunity and we should avoid a potentially very hairy moment sometime in the next week or two. Gold: I’m not sure if this is a warning or not but I’m getting countless emails from investors freaking out that the miners are going to get away from them or we should have just held. Folks it’s easy to say in hindsight we should have done this or that. Trust me though we don’t want to hold through a nasty D-wave if we can help it. So it’s easy to say we should have done this or that but I think we are positioned just fine. We managed to lock in some profits if that was the extent of the C-wave. We have plenty of cash on hand so we can enter once the market corrects and if there is going to be another leg up we’ll catch it. If we re-enter and this is an A-wave then we are just going to have to be patient till fall and endure the ups and downs thru the summer. Going back to all those emails freaking out about missing the move I’m going to again remind you of the big gap on GDX and also point out that other than yesterday volume has been painfully light so far during this rally. As a matter of fact this is the lowest volume since last September when gold broke out of the triangle consolidation. I certainly wouldn’t be willing to bet against the gap getting filled during a volatile stock market correction. As a matter of fact I’ll probably use a fill of the gap as my entry. Gary Investing in the financial markets can involve considerable risk. Past performance is not necessarily an indication of future performance. The information included in The Smart Money Tracker and The SMT subscribers daily updates is prepared for educational purposes and is not a solicitation, or an offer to buy or sell any security or use any particular system. Information is based on historical research using data believed to be reliable, but there is no guarantee as to its accuracy. G.D.S L.L.C., nor Gary Savage, do not represent themselves as acting in the position of an investment adviser or investment manager for funds that are not under their direct control and fiduciary responsibility. GDS L.L.C., Gary Savage, will not provide you with personally tailored advice concerning the nature, potential, value or suitability of any particular security, portfolio or securities, transaction, investment strategy or other matter. From time to time, GDS L.L.C., Gary Savage, may hold positions in securities mentioned, but are under no obligation to hold such position
