I’ve looked over the “live charts” in the last WSW posting and I’m not seeing anything exciting. On this composite assets class race, only Gold and Silver look interesting, and of them Gold is a bit long in the tooth for a trade.
Please remember the mantra “Early Out, Late In”. It is better to exit a rising market a bit early, rather than overstay for the crash, and it’s better to get onto a rising trend after it is clearly established, rather than hop onto a “one day wonder” and then get your clock cleaned.
So we’ve got gold approaching a ‘resistance level’ in that the high is about the same as the last high and the dollar showing a bit of weakness. US Stocks took a good day and the Asia / Europe open looks positive as well. OK, a nice positive day trade, but not a change of overall market sentiment.
This is a news driven market, so I’m continuing to be be cautious and largely sidelined as we find what the news this week will bring. I’ll make a new WSW posting in a day or three, but for now I’m not seeing a ‘sea change’ just a bit of ‘chop’ on top of a falling wave.
Frankly, a lot of the movement just looks like big players taking off short positions preparing for the Labor Day weekend ahead.
We are still in a series of ‘lower highs and lower lows’ in US stocks (and many others too). So watch the charts for signs of a reversal, but for now buying a daily rise in a falling market is a losing strategy. Better is to raise cash to buy a short at the top of the rise. It is best to have the bulk of your ‘position’ be in the direction of the major trend.
The best and worst of last week are:
10 Best Performing Industries Industry Name Percent Change (over time selected) DJ US Platinum & Precious Metals In... 10.90% DJ US Water Index 3.31% DJ US Gold Mining Index 3.28% DJ US Diversified REITs Index 2.75% DJ US Retail REITs Index 2.25% DJ US Multiutilities Index 2.20% DJ US Home Construction Index 2.17% DJ US Home Improvement Retailers In... 2.10% DJ US Industrial & Office REITs Ind... 2.07% DJ US Gas, Water & Multiutilities I... 1.93% 10 Worst Performing Industries Industry Name Percent Change (over time selected) DJ US Coal Index -5.82% DJ US Brewers Index -4.59% DJ US Medical Equipment Index -3.85% DJ U.S. Iron & Steel Index -3.62% DJ US Forestry & Paper Index -3.26% DJ US Paper Index -3.26% DJ US Electronic Office Equipment I... -2.95% DJ US Computer Hardware Index -2.85% DJ US Investment Services Index -2.85% DJ US Telecommunications Equipment... -2.83%
Looks to me like some “gold money” spilling over into platinum and other precious metals along with a bit of run away from industrial base stocks and into things like water and utilities. It also looks like some ‘short covering’ in the REITS, so they might be OK to nibble at now too.