It is very interesting that gold is now leading silver, whereas for the last few weeks it has been the other way around. Some would point to manipulation of the silver markets as the reason, or perhaps the shorts have simply reasserted themselves earlier because silver has broken out before gold. The dollar getting hammered this morning bodes well for the PM’s this week and should in theory boost stock prices as well.
Remember the POMO schedule for this week 17.5 billion – 24.5 billion released this week. How long will people keep buying US dollars in the face of this? It will be interesting to see what stocks do. So far the dip buyers seem to be making an appearance, but as it is early who knows. One thing is for sure, and that is Ben Bernanke was watching the futures and is hard at work cranking the printing presses and loading up the POMOcopter.
PM’s are preforming very well, although we are seeing some selling as I type this. The trend however, is undeniably up. Fighting the primary trend is like picking a fight with the 300 pound guy at the bar, sure you might win, but who cares? Oil and gas – and that sector in the S&P500) are also up on this Libya instability. There is really no reason to rehash that, sufficient to say that monarchies are outdated and have no place in todays world – I much prefer our system of shadowy autocratic/oligarchic rule passed off as democracy.
There is no reason to assume that this is the start of a broad market selloff at this point. We are still in an uptrend. Some might point to various technical indicators pointing to overbought – I respond with “so what, who cares?” We have been overbought for the better part of this rally. In the end all you need to know is the trend is still up, and inflation is present and boosts the price of everything, stocks included (who cares about the economy anyways, or incidentally the meaningless “data” released by the US government).
Remember the number 1 job is risk management, and shorting this market at this point is just guess work – yes things are bad: again, yes, things are bad, who cares they have been for a while now?
Protect your neck.