Thursday November 15 2012
Major stock indexes and commodity shares broke their 200 day MAs yesterday closing down. This caused a compuer generated wave of selling in both. While this duplicates the drop below the 200 day MAs in June, the internal indicators show no sign of a bottom as I have been reporting. While gold and silver have not fallen out of bed, neither have they advanced to new highs, gold over 1739 for example. That is needed to turn the gold trend higher.
The SPX VIX ratio fell back to recent lows on the sell off. GDXJ followed lower at bottom. Years ago mining share action led the metal but these days they seem to go their own way.
Neither the dollar nor bonds made new highs which seems a bit divergent given the across the board collapse in equities. My entire page of internal indicators are solidly red, down. No bottom in sight there yet.
Where are we?
The decision to sell September 18 was one of the best calls of the year for TMP.
The decision to start buying again was at best too early and at the moment, a terrible idea, I ignored the fact that the internal indicators like the summation index had not bottomed. This points up the danger of not sticking to the game plan. I have promised to be forthright and admit my errors. This was an error. But no point in selling here, let's see if this is a re play of June 1. For those of you new to reading about investments, the vast majority of writers never ever admit an error choosing to ignore or gloss over mistakes.
At the moment probably not! News is uniformly negative all over the world, I expect grand standing not compromise on the Fiscal Cliff tomorrow, gold is not rallying which suggests my original target of 1650 will come in before we see a low, stocks are oversold, are there sufficient numbers of short sellers to keep driving the averages down, for now probably.
Recall my observation on Sept 18, it's easy to sell when things are calm. In the midst of a selling panic, it is too late to go short and too early to be buying.
I have no orders to buy or sell anything at this time. If this were easy, we could all invest from the couch and skip our day jobs. This ain't easy.
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