Why I think Gold’s pullback isn’t over yet
Gary Kaltbaum is an investment advisor with
over 18 years experience, and a Fox News Channel Business Contributor. Gary
is the author of
>The Investors Edge. Mr. Kaltbaum is also the host of the nationally
syndicated radio show “Investors Edge” on over 50 radio stations. Gary is also
editor and publisher of “Gary Kaltbaum’s Trendwatch”…a weekly and monthly
technical analysis research report for the institutional investor. If you
would like a free trial to Gary’s Daily Market Alerts
click here
or call 888.484.8220 ext. 1.
A few important group notes…starting with GOLD.
We have been telling you that GOLD was due for a pullback. We have been telling
you COMMODITIES were due for a pullback. There was a simple reason why. Just
take a look at the chart of GOLD vs. its
moving averages.
GOLD had been moving into the $725 range with the 50-day
moving average
at $600. Are you kidding? If there is anything we have taught you throughout the
years, it is knowing when risk picks up.
When markets, sectors or stocks are stretched so far away from their moving
averages, it is getting close to the party ending. We would consider what
happened in recent weeks a climax run in GOLD as well as other COMMODITIES. This
occurs when all the dumb money jumps on top of the pile AFTER a move up. Just
remember 1999.
GOLD dropped over $27 on Monday. GOLD STOCKS were smoked along with the metal.
COMMODITIES and their underlying stocks followed suit. This is normal. It is now
time to kick back and wait. We suspect there is even more of a pullback to come.
As we have been telling you, EIFFEL TOWER charts do not last long…and their
corrections are vicious. Whether or not the COMMODITY party is completely over
is another story.
Other thoughts:
Hand in hand with COMMODITIES getting smacked, the DOLLAR bounced nicely on
Monday. The DOLLAR has been very bearish but like GOLD being extended to the
upside, the DOLLAR has been extended to the downside. This is a bounce in the
DOLLAR…and won’t go further than that.
OIL continues to put in a top…but many OIL STOCKS have been breaking down. We
have been taught that the stocks usually lead the commodity, so hopefully, we
will see OIL PRICES finally break down.
We are finding some areas that are turning up here. We are just not thrilled
with them. CONSUMER STAPLES are turning up. Names like
(
KO |
Quote |
Chart |
News |
PowerRating),
(
PEP |
Quote |
Chart |
News |
PowerRating),
(
HNZ |
Quote |
Chart |
News |
PowerRating),
(
BUD |
Quote |
Chart |
News |
PowerRating) and
(
CL |
Quote |
Chart |
News |
PowerRating) are showing good relative strength here. Whether or not it
lasts is another story.
We have been liking BIG BANKS for weeks. Names like
(
WM |
Quote |
Chart |
News |
PowerRating),
(
STI |
Quote |
Chart |
News |
PowerRating),
(
C |
Quote |
Chart |
News |
PowerRating),
(
BAC |
Quote |
Chart |
News |
PowerRating),
(
WFC |
Quote |
Chart |
News |
PowerRating) continue to act bullishly.
We are liking the action in INSURANCE. Names like
(
MET |
Quote |
Chart |
News |
PowerRating),
(
PRU |
Quote |
Chart |
News |
PowerRating),
(
ABK |
Quote |
Chart |
News |
PowerRating),
(
PGR |
Quote |
Chart |
News |
PowerRating) are in very good bases.
Gary Kaltbaum