Wednesday March 19 2014
Gold collpsed over $24 today. Call it the FED tapering or what you will but the rally since early January may be ending.
GDX dropped out of its rectangle formation. Huge volume on the move down, no doubt takin gout lot of sell stop orders. But that makes three days in a row down hard.
Dow Industrials
Recall our analogy to 1973-74. Back then the Dow Industrials were quoted more often than the S & P is today. The Dow made its high in very late December. While the rest of the indexes have made higher highs, the Dow made a lower high. RSI, the Dow, and the MACD are all trending lower. This is the same ay markets topped in 2007*08. Quietly.
Remember the smart money will run markets up to sell more stock at higher prices to the late comers. One can make the case this that is just what has beenhappening.
Transports
The Transports should be making new highs, there is literally a shortage of rail cars to haul all the freight for fracking wells. But at best this is a double top. And note that RSI and MACD are also fading here from their previous highs.
Meanwhile all are partying on CNBC. We featured quotes this past weekend from advisors who have clients who have been out of the market for the last five years, now wanting in. This is all part of the topping process.
Be on guard.
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