Tonight we focus on just a few key ideas. The first is that the market had a difficult time “correcting” the decline of the past few days. What does that mean? Well, we will know more as trading unfolds over the next few days. But, the path of least resistance is down and there doesn’t really seem to be much to stop the decline. There was some stability in the market for the better part of the day but this is after we have seen some large price declines.
The other idea is the trading for Tuesday. Can the big reports for the month, those being the April housing starts and the April PPI (producer price index) bring some life back to the market? These are reports that could have market moving capabilities especially in this environment. We aren’t going to say that the direction will necessarily be up either.
I think the most stunning move in the past few days is the price of the mining stocks. The index we have been mentioning here, the HUI, has taken a turn for the worse since last Thursday. On Thursday morning the index traded at a new 52 week high (sell morning strength like this) just over 401 and Tuesday it closed at 343. That’s about a 15% move in three days of trading, that is a lot. Gold, which we think follows the price of precious metals, popped to a new high over $730 on Friday morning and has dropped about $55 an ounce in the last two days to $675 even though it closed a little higher than that.
SELL RALLIES…Cash is King
Be careful out there.
Dow Industrials: 11,428.77 +47.78
RYVNX: 20.00
RYAIX: 22.88
TLT: 82.98
BEGBX: 13.53
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