A good point raised. Found under the Gold commentary
S&P 500 STRATEGY: STAND ASIDE (for definitions of terms see end of report)
Our thoughts that we might see an up week because of huge put option positions in strikes just below levels we were at last week turned out to be prescient. The S&P had a sharp 2.7 per cent gain. The bulls were elated, but now we note that the consensus of newsletter writers (like us) has turned decidedly bullish.
As a result of this past week’s rally we are now right up into major resistance (the 40-week MA is at 1,425 and the 200-day MA is at 1,428). We have numerous negative divergences popping up in the indicators, particularly the dailies. But the bullish consensus reports are a sign that we may be reaching the end of this run. There is the old “sell in May and go away” adage; we are now halfway through May and we have been going up. [read more…]
TSX INDICES
Once again propelled by energy, golds, materials and the metals and mining and adding a dabble from industrials, financials and the income trusts the TSX Composite leaped another 3.2 per cent and broke out to new all-time highs. In theory this now set us on our way to targets as high as 17,300. But if we are to do that we must have participation from more than just energy, gold, materials and metals. Of course financials, industrials, real estate, telecommunications, utilities all jumped this past week as well. Only Health Care and Consumer Discretionary were down on the week. But many of them are now very close to resistance at the 40 week MA. We need to break and close over that level to confirm buy signals on sectors.
Groups like the Consumers (Discretionary and Staples) remain well below their 40 week MA so we remain out of these groups although there may be select stocks. The Financials remain below its 40 week MA as well so we don’t want to be in the sector. But Gold after a three week foray below its 40 week MA has now rebounded and closed above it this week giving us a buy signal. Ones like Health Care are at resistance as is Real Estate. If both could close above the 40 week MA next week again we would issue buy signals. Industrials have been strong propelled by Bombardier which is in our portfolio below. Information Technology is now above its 40 week MA for the past three weeks so reluctantly we would be long. But it is making what looks like a bigger topping pattern. [read more…]
WHAT’S WRONG WITH THE JUNIOR GOLD (PM) STOCKS?
What is wrong with junior precious metals (PM) stocks, and especially the junior producers and junior exploration stocks? In looking at scores of junior mining stocks that trade on the TSX Venture Exchange (CDNX), it seems to be mostly the junior gold miners that have taken a beating over the past six months.
Normally the CDNX follows the major metals indices such as the TSX Gold Index and the Amex Gold Bugs Index (HUI), although there are sometimes lags. Since lows seen last August at the bottom of the first wave of the credit crisis, the TSX Gold Index is up about 27 per cent, the HUI is up about 38 per cent and gold itself is up about 34 per cent. [read more…]