A Reversal Day Often Marks The Short-Term Bottom

A reversal day often marks the short-term bottom. Now we watch tomorrow to see if the new 52-week lows drop down to a harmless level.

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Feeling a little bit better about stocks? I am hoping that we see market consolidation in this sideways range. The consolidation could last for a number of months. My guess is that before the market can challenge for new highs, it needs to re-test the 2600 level.

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There was no flight into gold stocks during this market sell off. I don't really know why, but I think it may be because of the weak M2 growth rate. I am open to other explanations.

Of the 45 ETFs I monitor each day, GDX was the weakest today.

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The challenge now is to figure out what the best performing sectors will be over the next few months. At the moment, I honestly don't know. But here are some candidates.

The China large-caps didn't even touch the 50-day average. Very bullish.

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Large cap US retailers, also looking very strong.

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Biotech retraced to the break out level, and then hung in there quite well. Bullish looking to me.

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Home Construction could be a broken chart, maybe done in by the higher long-term interest rates? I am avoiding this group.

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Emerging market stocks look healthy.

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Outlook Summary:

Higher inflation and higher rates are now a headwind for US stocks.

The long-term outlook is positive.
The medium-term trend is down.
The short-term trend is down.

Disclaimer: I am not a registered investment advisor. My comments above reflect my view of the market, and what I am doing with my accounts. The analysis is not a recommendation to buy, ...

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Louis Jackson 6 years ago Member's comment

I'd like to see Dennis Gartman come out and announce he's buying dollars right as it approaches overhead resistance, and I'd like to see him say "I shall be selling gold." Then I can load up on $GLD and $GDX again.

Alexa Graham 6 years ago Member's comment


Louis Jackson 6 years ago Member's comment

$GDX loks terrible. I wouldn't be surprised to see gold make a return to the 1200's soon.

Alexa Graham 6 years ago Member's comment

I've read that some investors have been abandoning their positions in #preciousmetals to help fund their move to #crytocurrencies. Any truth to that?

Louis Jackson 6 years ago Member's comment

I've heard that, but I'm not sure if that's really having any effect. Gold has had every chance to rally with the weakness in crypto, the dollar, and the equities, yet it has been headed downward.

Gus B. 6 years ago Member's comment

I agree @[Louis Jackson](user:25529).

Douglas Gammons 6 years ago Contributor's comment

I would love to know why gold is so weak. I am open to all suggestions.

Alexa Graham 6 years ago Member's comment

I thought gold was rebounding today?

David M. Goldstein 6 years ago Member's comment

Check out @[Michael Kahn](user:5052)'s 3 Reasons To Be Chearful:


And @[Frank Holmes](user:27728)'s "Fear Creeps Back Into Stocks, Shining A Light On Gold"


Louis Jackson 6 years ago Member's comment

I'm not sure overall, but I'm guessing the dead cat bounce in the $ is pushing it down. And $ looks like it could bounce to the $92 area.