Unusual trading for a Monday, with the major indexes all being down, at least a little. Normally, we see a fairly strong start to the week but not Monday. The NASDAQ just dropped into the first hour of trading but then stabilized the rest of the day. The question is “Can the market start its descent now?”
The stock market has been overbought for several weeks now and is certainly due for a correction. This correction could take a couple of different paths, one which would basically trade flat for a few weeks or two which would mean a good drop in prices. With the Dow Industrials meeting some significant resistance in the 10,950 area and now rolling over about a hundred points, there hasn’t been much in the way of relieving the overbought condition. I vote for a decline in prices just because Monday’s trading showed some weakness in the market without much in the way of buying to bring prices back higher.
The stock market is currently a dangerous place to store your funds. We continue to advise selling any strength. The market looks tired and in need of some price declines to alleviate this unusually bullish period of time. We remind you to take a look at your portfolio to see if it is giving you a good run along side this “rally” or is it lagging?
Gold keeps pushing higher without much in the way of support from the mining stocks. This should be a warning signal to most traders and is to us. We don’t like missing out on a good run but we really haven’t been impressed by the mining stocks’ move. The HUI was up about a buck on a five dollar move in gold, not a good ratio.
Not much else to report this evening and our posts have been fairly long the last few days so we will keep this one short.
Dow Industrials: 10,835.01 -42.50 (Time to head back to 10,500?)
RYVNX: 18.54
TLT: 89.10
BGEIX: 13.90
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