As is often the case, the stock market bears jump on the bandwagon well after the fact; nevertheless, there are some technical reasons that would suggest we are in for more downward activity. This is a wait-and-see situation as far as I am concerned.
The VIX is coming into resistance and the SPY into support. For all the bearish sentiment out there, we should take notice that we are still above the lows set in March. As well, the S&P 500 has managed to stay inside the outer band of the moving average envelope (second chart). A breakdown there and the situation will have to be re-assessed, though a trend line would provide some support.
The resource-dependent TSX has also faltered, but when comparing that to the US S&P 500 (an index top-heavy in completely unprofitable US banks), it leaves one to wonder why.
Physical gold remains as one of the few healthy sectors.
The same cannot be said about gold stocks, however. The US GDX (a basket of blue chip gold exploration companies) continues to shadow the market's performance.
Silver and silver stocks continue to be extremely volatile.
Perhaps an indication of the power of all the ETF's in the investment world ..... US housing remains afloat, despite the fact there are close to 20 million vacant homes (more than half the total population of Canada) in the US.
The US Dollar
And once again, I am left to remind people about the evils of "juiced" ETF's. HGU.TO (a double ETF that trades gold stocks) continues to lose ground to GDX (a one-to-one ETF). If you don't have the time to monitor stocks on a daily basis, juiced ETF's are not for you.
