With the bearish seasonal headwinds this week, the bulls have done a nice job not giving up any ground so far. In fact, the bulls powered ahead on Tuesday and held firm on Wednesday. It certainly looks like the Dow and Nasdaq 100 want to join the S&P 500 at new highs this week. Although the S&P 400 and Russell 2000 have been laggards, they have certainly led the parade over the past week.
Long dated treasuries continue to trade well and I expect some of the bears to throw in the towel now. And that’s why I am getting a little nervous being so bullish. It’s time to tighten up those stops and contemplate taking some chips off the table. With the Fed continuing the taper and the economy supposedly doing better, the bond market ain’t believin’. Something dark lies ahead.
Gold on the other hand is now falling sharply towards the sub $1200 target I have mentioned of late. Unless the shiny metal immediately reverses course, it’s going to be ugly until the metal hits bottom, probably next quarter.