The Brains Trust, page-12193

I felt yesterday that New York was getting oversold and should have a bounce – and bounce it has done led by tech. Banks were better but for this rally to last, I need the sector to participate a little bit more aggressively so we have an important few days coming up. As I have mentioned a number of times, the S&P needs to get a move on or it runs the risk of forming a head and shoulders top pattern. Wasn’t all that happy to see most things close off their highs either.

Stronger US dollar which once more pressured commodities across the boards. Crude was again one of the features but that is looking like it needs a correction. Metals all weaker. Sentiment on gold always has to reach a point where everyone gives up before it can reverse. Have that we reached that stage? The problem I have, as I mention each day, is that our Gold Index which did look so good, has reached very overbought thanks to the weaker Australian dollar. As well I note that the volume in the GLD/GDX (gold versus stocks) was the highest in about five years – that sounds climatic to me. In fact both GDX and GDXJ finished positive overnight. Makes it hard to work out how everything in the gold market is going to come back into sync.

Also looks like the LIT ETF could be getting ready for a rally. The problem I have with it however, that it might just rally up to the first resistance level and run out of steam. Any support in this sector would be welcome.

Finally, June is almost out of the way. Hopefully the new financial year will bring a clearer picture in a number of areas.