Many have asked me what a bottom looks like. It does look very similar to this. Indecision, high volume, a lot of fear, technicians confused. But, we’re missing those 90% down days where all the volume is down. However, we are getting a welcomed rally today. I think it’ll continue but will probably be another place for us to short into.
I’m suspicious of this rally today because once again money is coming from global growth (steel, agribusiness, coal, energy) and going into financials and beaten down areas. That’s not the recipe. The recipe is for it all to go up. I’ve mentioned this before. Every rally in 2008 that looked like this failed. We don’t need rotation. We need fresh money coming in.
But, the news from Wells Fargo (WFC) was good. They beat estimates and they announced they are raising their dividend. Wow! So, the financials are up big. That got us going this morning. And, it’s bounced around but I imagine we can ride this one for a while.
As for gold, I’d be using the dips to buy more. Not necessarily today, but perhaps around $950 per ounce.
Perhaps more later today.
