Another day, another record in the Dow. By now you are probably aware that the previously lagging Nasdaq and Russel 2000 have joined their bigger brethren in making new highs for the year. There is just no stopping this money train! I still believe the underpinnings of the US economy is weak, but as Henry To of MarketThoughts.com put it, “many of the major hedge funds out there are underinvested and underexposed to U.S. equities in general“. There is no use fighting the trend! I managed to exit my housing related shorts this week with small profits and is counting my blessings.
Gold and oil stocks are conspicuous by their absence in this feeding frenzy. Since I suggested taking a partial position via GDX here, I want to follow up today. The weakness in the gold stocks relative to the metal in recent days was not encouraging, so although the HUI is still above my “line in the sand” of 315, I trimmed down the weaker names that amount to about 25% of all my PM stocks. FWIW, what I decided to keep were AUY, AEM, SSRI, SLW and others.
As I cautioned before, the gold sector can be extremely volatile even though I’m a long term believer. If you have any doubt, live to fight another day.
The above is not investment advice. Please do your due diligence before making any financial decisions!
