Precious Metals Turn to Stone

On Thursday morning we were trying to figure out why the market just took off after a half hour of trading.  Then we realized that the Leading Indicators were supposed to be released at that time.  We rationalized that the LEI must have been less than expected thereby allowing the “Fed is Done” trade that has been so popular recently.  While we searched a little bit for the number, we did find it but it was not easily found.  And, as reasoned, the number was below expectations.  Yippee, the economy is not as strong.  Yes, it is twisted.

The Dow sprinted up over a hundred points to a new high for the last six years, since the highs set in early 2001.  You know that the market sees the old highs as a challenge and really wants to tackle them, for the Dow anyway.  Meanwhile, the Russell 2000 goes on making actual new highs, although it was down today, which has given those small cap players a lot of confidence in the market.

We continue to be amazed at the lack of concern on the part of the tech world.  INTC’s numbers were just terrible but the stock moves up.  INTC has been weak for quite a while now and we figure it will continue to lead the market down but for now, the market thinks the worst is behind it, or something.  Maybe the Fed will bail out INTC too.

After the market closed this evening, GOOG reported earnings and revenue which were substantial according to the media.  That stock soared about 8% in after hours trading, so the big speculation continues.  Hope you are all enjoying the wildness.  

Speaking of wildness, the precious metals decided to drop like a non-precious stone as silver went down about $2 on Thursday and looking at the over night markets silver is down another 50 cents.  Gold dropped about $30 during the trading day.  These are big numbers and we would not be surprised if this rout continued for a few days or weeks.  This may give us another opportunity to get in.  This speculation in gold, oil and the stock market will Not last forever.  

We don’t know think the market has much left in it as the momentum has not followed it.  The indicators that we follow are showing weak or toppy.  We would definitely not chase these prices—we suggest selling into strength and that is what we have seen in some of the big speculative names.   What are your stocks doing?

Be Very Careful out there…

Dow Industrials:  11,342.89  +64.12
RYVNX:   17.81
RYAIX:  21.56
TLT:  84.31
BEGBX:  13.05