Last week we covered our hedges a few days too early as the selling continued faster and farther than I had anticipated. While equities are moving up approximately 1% this afternoon, I have added a new round of hedges as I suspect this bounce is temporary.
The trading action over the past two weeks has been very different from anything witnessed after the March low. There is no longer the fear of missing a train leaving the station, plus we have a strong move in gold today that could be negative harbinger in the Middle East.
And while my indicators are no longer stretched to extreme levels as they were two weeks ago, we have yet to see any climactic selling and that has me worried. We’ve only seen relatively mild selling thus far and typically a good market bottom is put into place by fear and forced selling.
Regarding gold, we have finally added a new round of buys into the metal as a double bottom may be in place. The U.S. dollar has had a nice run at the expense of the metal and if the dollar runs out of gas, or if people start getting trigger happy in the Middle East, gold will be of relative value to us.
Be Careful Out There
Brad
Long Gold