Thursday November 8 2012
Top to bototm June 1 was a 284 point day. Wednesday November 7 was a 352 point day.
The markets have been falling since our exit September 14-18. While technicians like to say that there is always a fundamental to validate the technicals, at the moment uncertainty abounds. In the past six weeks we had not only the election called a dead heat but two option expirations, an end of quarter window dressing, a literal hurricane on the Jersey Shore and now a snowstorm in the same place.
John Boehner remarked that a solution to the fiscal cliff is not likely in a lame duck Congress. So here we go again. This may well mean a series of up down market moves with no clear resolution until next year. That would suggest the end of Januaary 2013 given that hte inauguaration is not until January 21!
Yesterday GDXJ actually managed to close up for the day. It bottomed mid morming, found buyers and then closed up on the day. This is a remarkable accomplishment on a 352 point down day for the Dow.
GDXJ
The four fibonacci based exponential moving averages have come together.
GDXJ managed to close above all of them yesterday.
In the bottom panel Average Directional Movement has not given a buy signal. That would require a move of the green line over the red line. The overall downtrend has not reversed but looks to be bottoming.
Other major stocks we have mentioned CAT DD MCD had a terrible day. Every one of the 30 Dow Stocks was down with J P Morgan hit the hardest.
This seems to be a significant enough low to engineer a bounce for the next week in the overall stock market. We will be watching to see if commodities continue to outperform stocks.
Reuters CRB versus SPX
This is a ratio chart of the CCI versus the SPX. When the ratio advances commodity prices are outpacing stock prices. That was a nice jump to the upside yesterday. Now it needs to continue over the 200 day MA.
Our overall position is at least 75% cash. We have positions in COPX GDXJ XES XME. I have no more orders in at this time.
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