As we make the turn into the final trading week of the year the major market indexes remain in a bear market. The S&P 500 Index spent all of last week trading below its 50-day moving average and closed there today.
The
NASDAQ Composite continues to test its bear market lows. We continue to see no reason why anyone in their right mind would consider this market to be little more than an "uptrend under pressure." This borders on the absurd. Leadership is virtually non-existent as PE-contractions overtake almost every sector in the market, particularly higher-PE tech.
Precious metals remain the most coherent thematic trade as both gold and silver continue to trend higher in steady uptrend channels. At this stage we would only be buyers of silver on pullbacks to the 20-dema. For now, the
iShares Silver Trust (SLV) remains extended from any near-term support.
Silver leads, as is obvious from the chart of the
iShares Silver Trust (SLV), above, while the
SPDR Gold Shares (GLD) has recently moved above the 200-dma as it trends higher. We would look for opportunistic pullbacks to the 200-day moving average as the better, lower-risk entries using the 200-dma as a selling guide.
The Market Direction Model (MDM) remains on a SELL signal.
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