Could be the last time over 10,500 for a long time.
The NASDAQ COMP now has eight straight up days in a row with almost a 100 point move in that time, about 5%. To me, it seems like a lot more than that. The market is plain and simple over bought at this point. You can't inhale forever and neither can the market go in one direction forever. The rally has been keeping many bullish but now is the time to unload some unwanted stocks that have not participated in the rally.
The market has given most of you a very nice gift here in the form of higher prices so those of you who STILL have not sold can have one more chance. This price high is lower than the price high of early March and that in itself is a bad sign. We are looking at the end of the month and wondering if the usual strength can show up again due to the previous week's strength. We think not. But, we recommend selling long positions by next Friday the first Friday of the month which is...you guessed it, Unemployment Report Friday.
We don't think this market can hold up that long but it is possible with the end of the month and the Unemployment Report due out. Either way, you can feel good about getting out at these prices and then you will be ready for a 25% rout in the major market indexes, we think by October with a lot of it coming in this first drop out of the high we are at now.
Our purchase of BGEIX on Monday has given us a good move in one day from 9.71 to 10.00. Today gold was virtually flat but the HUI was up over 4 points to 181.35, up ten percent in six days. In that same time gold has barely budged and we are fairly confident in our call. We recommend buying these stocks on ANY dips. The big move we have seen in this short a period is bound to be corrected somewhat, giving you ample opportunity to get into some of these stocks.
CNN Money published an article called "The Kevlar Housing Bubble". How appropriate for us contrarians! Today saw record existing home sales in April and Wednesday we get new home sales. It looks like Kevlar is the word to describe the housing "bubble". Wednesday also brings April durable goods which have been down for a couple of months, so expectations are for a 1.0% improvement.
Look for the Wednesday Update email tomorrow.
Dow Industrials: 10503.68 -19.88