Wed May 30, 2012
This weekend we wondered looking at this update chart if we would get to buy low again. Notice that buyers came in today after the initial drop in GDXJ and pushed it up, not a great deal but for a 160 point down day in the DOW, not bad.
One, gold made a higher low than on May 16.
Two, note the range today. Gold opened at 1555. then dropped to 1532, then hit a high of 1571 and closed at 1563, whole numbers. Impressive. Remember gold will bottom before stocks. That is likely happening now. one can see it in this daily price action.
Yesterday CEF sold at a discount of some 2%, today it went back to a narrow premium. Again this represents net buying.
Bingo, right back at the December low where we recommended this last time. If like myself you lost a few bucks on SJT or HGT ( am still miffed over that error on my part) the forthcoming rally in CEF or GDXJ should more than make up for a small position in either of those mistakes.
New readers, you can access our archives at the left hand side and read what we said back at the end of December about buying CEF, it worked.
Draw Me Picture Worth a Thousand Words, Well Okay Here it Is
NYSE Summation Index
An alert reader of TMP suggested we look at the multi-year uptrend line of the NYSI, so let's do just that!
NYSI has now matched its lows for the last three years. At bottom notice that it is registering the same oversold levels on CCI that were present at previous market lows.
Bullish Percent - 50 Day Indicator
The 50 day MA is the most sensitive of the bullish percent indicators. This seems ot confirm the previous chart that we are in the kind of oversold territory associated with previous bottoms.
So there you have it. Gold is bottoming. Stocks exhibit the same oversold conditions associated with lows the last four years. Bonds and the Dollar hit new highs. The ten year Treasury yields a mere 1.6%. even less than last October when the market had a 400 Dow Point down day! Fear is rampant! Fear of course is coincident with market lows. Note that we finished this blog without mentioning Greece, rely on what the market tells us not the media.
We hope that TMP has been of help in making your investment decisions. We will attempt to stay more big picture and avoid individual issues like HGT or SJT that are subject to all sorts of vagaries and outcomes. Thanks for reading our blog.