Gold shines | stockbee

1/03/2008

Gold shines

Not at all surprised by the bearish action yesterday

If you were following the Market Monitor methodology, you were already ahead of the market in anticipating a rally failure and on 26 th December you had a clear signal of possible rally failure.

The 65 days ratio is bearish. We still have small pocket of momentum. Leading stocks like GOOG, AAPL, GS, BIDU, ICE, etc had down day. The bearish move on all indexes today means the IBD number of distribution days model is firmly in bearish territory on all indices. All have 5 plus distribution days. If you see the IBD Big Picture today, it is also telling the same thing.

January is often an uncertain time for the market. Given that history, along with 299 stocks down 4% plus was almost a 300 day. The small rally in last 10 days has given back all its gain. stocks’ recent jitters, it’s a good idea to switch to a conservative approach. Avoid new buys. Cut losses short. If you own a leading stock that’s starting to waver, consider taking partial profits.
Implication of this for IBD 200 and DT is , chances of follow through post breakouts are low and the swing size is smaller. So one needs to have very low per trade profit expectations or stay on sideline till things improve.Market conditions are not ideal for any aggressive position building. Everything indicates high risk zone. Selling often feeds on itself and even the strongest sectors and stocks can quickly give up 10 to 20% in matter of day or two.

But this market has time and again recovered from such selling. So current hypothesis still is that the market is essentially been stuck in a small range for last 4-5 weeks. A 300 plus positive day on Market Monitor here might change this view. Ideally a 500 plus day on 4% breakout would be ideal. Any 300 plus day on downside will accelerate selling. But a reflex bounce in a day or two is a possibility.

One sector which attracted buy interest yesterday was Gold. It was a broad based breakout in the sector. Some of the gold stocks worth looking at are :

ABX,Barrick Gold Corp (Google  Yahoo  Earnings  Chart
AU,Anglogold Ashanti Ltd (Google  Yahoo  Earnings  Chart
AUY,Yamana Gold Inc (Google  Yahoo  Earnings  Chart
AZK,Aurizon Mines Ltd (Google  Yahoo  Earnings  Chart
BQI,Oilsands Quest Inc (Google  Yahoo  Earnings  Chart
BVN,Compania De Minas Buena (Google  Yahoo  Earnings  Chart
CGR,Claude Resources Inc (Google  Yahoo  Earnings  Chart
EGO,El Dorado Gold Corp (Google  Yahoo  Earnings  Chart
EXK,Endeavour Silver Corp (Google  Yahoo  Earnings  Chart
GBN,Great Basin Gold (Google  Yahoo  Earnings  Chart
GFI,Gold Fields Ltd Adr (Google  Yahoo  Earnings  Chart
GG,Goldcorp Inc (Google  Yahoo  Earnings  Chart
GRS,Gammon Lake Resources (Google  Yahoo  Earnings  Chart
GRZ,Gold Reserve Inc (Google  Yahoo  Earnings  Chart
GSS,Golden Star Resources (Google  Yahoo  Earnings  Chart
HMY,Harmony Gold Mining Co (Google  Yahoo  Earnings  Chart
IAG,Iamgold Corp (Google  Yahoo  Earnings  Chart
KGC,Kinross Gold Corp (Google  Yahoo  Earnings  Chart
KRY,Crystallex Internat Corp (Google  Yahoo  Earnings  Chart
LIHR,Lihir Gold` Limited ADS (Google  Yahoo  Earnings  Chart
MFN,Minefinders Corp (Google  Yahoo  Earnings  Chart
MGN,Mines Management Inc (Google  Yahoo  Earnings  Chart
NEM,Newmont Mining Corp (Google  Yahoo  Earnings  Chart
PAAS,Pan Amer Silver Cp (Google  Yahoo  Earnings  Chart
PVR,Penn Va Resource Partners Lp (Google  Yahoo  Earnings  Chart
RGLD,Royal Gold Inc (Google  Yahoo  Earnings  Chart
RIC,Richmont Mines Inc (Google  Yahoo  Earnings  Chart
SLW,Silver Wheaton Corp (Google  Yahoo  Earnings  Chart
SSRI,Silver Standard Resource (Google  Yahoo  Earnings  Chart
VGZ,Vista Gold Corp (Google  Yahoo  Earnings  Chart

6 comments:

Raj said...

Hi Pradeep,
I am following your blog for quite sometime. Thanks for sharing your knowledge through this blog.
What is the formula you use to get "299 stocks down 4% plus" in your posting and also how do you calculate and arrive at 65 days ratio being bearish versus bullish.
I also use Telecharts.

Thanks much
Raj

Jack said...

Pradeep,

Were u able to tell your members that the market monitor was ready to turn up?

thanks,
Jack

Jack said...

Pradeep,

I guess what I'm asking... do u offer some analysis when you're a member?

thxs
Jack

hs1935 said...

Pradeep, when you say that the Market Monitor gave a specific indication of bearish bias on 12/26/07, what were you referring to?

Pradeep Bonde said...

Raj
( 100 * (C - C1) / C1) <= ( - 4) AND V >= 1000 AND V > V1
65 days ratio is ratio of number stocks up 25% in 65 days to number of stocks down 25%.

Jack
Yes. And once they understand the methodology, they can make that judgment themselves looking at the numbers.
On 18th December in my morning analysis on Market Monitor I indicated a snapback rally lasting few days or weeks.
------------------
18th December Morning (from Members Only Site)
However with 5 days of selling behind us (as indicated by Market Monitor) a reflex bounce might be a possible scenario here.
A snapback rally is such a distinct possibility that shorting here will result in a scramble to cover in my thinking.
---------------------------
On 26 th there was stark warning
"However the stocks up 50% plus in a month reading are already in 20 plus territory, which indicate a possibility of a correction in next shorter time frame. Current readings of 38 are at the extreme end of readings for this . Which means if you are in profitable positions, you should either sell in strength or move stops to lock in bulk of profit. This level of momentum on narrow set of stocks historically leads to reversal in next 2 to 5 days time frame."

hs1935
Stocks up 50% plus in a month were at extreme readings.

Jack said...

Pradeep

thxs