The past week flew by, as all vacations tend to do, but it also feels good to get back to business again.
Without a doubt, the market has been strongly in Bull mode – and as we have said many times, the trend is your friend until it no longer is. And when the trend is as strong as we have seen recently, fundamentals matter less than the trend. There is little doubt that the market is extended and in need of some consolidation, but there has been little to show that the momentum is slowing. Putting money to work has been more and more difficult because, simply, there have not been pullbacks and consolidation.
But we do believe that the market is increasingly becoming more vulnerable. We are not trusting, and will continue our stance of making tiny moves to the upside – taking some profits as they occur in order to protect profits. While it is possible that the excesses can be worked off over time, our sense is that there will come a time of the kind of entry points that we look for.
Some of our other thoughts are that there may still be some room to the upside in precious metals. But, should gold move to $1,000 an ounce, we will, at least for a brief time, become sellers.
It is good to be back at our desks, and we will spend today getting caught up on reading.
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