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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Alexa Graham 1 year ago Member's comment

:-)

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Alexa Graham 1 year 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?

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Gus B. 1 year ago Member's comment

I agree Louis Jackson.

Douglas Gammons 1 year ago Author's comment

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

Alexa Graham 1 year ago Member's comment

I thought gold was rebounding today?

David M. Goldstein 1 year ago Member's comment