Santa Arrives on Time... Precious Metals Bide Time
As blog readers know, the bottom in the Semiconductors, tech stocks and broad market was nailed in this space and taken advantage of in anticipation of Santa. This occurred even as some respected and highly visible analysts began calling "bear". And I respect their call, because at this point there is no evidence that what we have here is anything other than a fine, plump Santa come a callin'. A couple notes are due here; I told the blog I would not tout the Santa bottom feeding call in any public articles because I am a guy who has been calling for an airline rally for the last 20% decline. There are no geniuses in this business. Just hard working people who try to get it right and when they don't, adjust and evaluate why they were wrong. We are all wrong at times. So there is my disclaimer.
I do have a soft spot for technology companies with little or no debt that do not depend on fossil fuels and help enable an increasingly information-connected global economy. So I do not necessarily see an across the board bear market as a given at this time. Macro fundamentals, sentiment and of course the charts will tell us all we need to know going forward.
Here are charts of the Dow and SOX, showing room to run for Santa.
Another theme we have been carrying forward on the blog is the bullish status of gold in all time frames - Goldman's wacky TA call on gold's downward turning long term momentum indicators aside. The short term (daily) froth has been all but wrung out of the precious metals and the weekly charts are now much less frothy. Monthly charts are very bullish in mockery of Goldman Sachs' TA analysts.
Both gold and silver look very healthy and on daily charts appear to be simply biding time and bleeding off the excess. I love confluence and with gold we have a daily target of 920 or so off of the forming symmetrical triangle in concert with the same target off of the weekly triangle we have been following. Sentiment has gone from euphoric (bearish) to angst ridden (bullish). We should not ask why more people do not get this dynamic because if they did, we would not be able to take advantage. Greed-Fear, Greed-Fear... wash, rinse repeat.