Just a quick note this evening.
Despite a modest down day for U.S. Stocks today, on balance, short sellers have to be nervous given the intra-day price action yesterday and today. I personally thought that Monday's slide was the beginning of an extended downturn, but buyers seem willing to step in despite a potentially negative shift in U.S. monetary policy before year-end. While the bearish case for stocks still looks compelling to me, timing is everything, and maybe the bulls still have some ammunition for additional upside fireworks.
In the interest of full disclosure, I exited my entire short position in the S&P 500 today.
Also in the interest of full disclosure, I re-entered the precious metals arena today with long positions in several North American gold and silver stocks, plus the GDX and GDXJ gold mining ETFs.
With an interest rate hike from the Federal Reserve on the near-term horizon, why would anyone want to own gold and silver stocks? I've been asking myself this question several times over the last couple days. I could say that both gold and silver are now "oversold" technically and due for a bounce. This is true, of course, but it's not a good enough reason to buy here. All I really have that's different from everyone else is my computer trading system. While the signals from my system have been less than perfect in the precious metals arena, they have mostly provided me with enough successful trades that I am compelled to take action when buy or sell signals are actually triggered.
A bunch of daily chart buy signals have been triggered this week in this most hated stock group. Here is the latest daily chart of the most popular Gold Stock Mining ETF (symbol GDX):
 |
| Major Gold Mining Stocks ETF (GDX) Daily Chart with Computer-generated Buy & Sell Signals |
