In the short term, it appears that several markets may reverse directions.
I have been saying that I believe the general stock markets will go up since end of March. I’m changing my short-term stand now. I believe that there are too many clouds in front, and the forward picture is simply not clear at all. Most likely there will be a short pull-back if not already. But more importantly after that, the markets need to decide whether to resume upward or downward move. Right now, that is not clear at all. There are simply too much uncertainties.
While I believe that the more likely resolution is for markets to trade in a range between January/March low to probably with SPY less than 150, I must admit that both breaking new lows and breaking out above 150 are distinct non-zero possibilities. I am moving to the sideline cash again on my general stock market bets.
Definitely the shorts have been hurting, but I think the longs may have gotten too gleeful and ahead of themselves.
On the other hand for precious metals, if it pulls back, I would say buy. If it breaks new low, I would say double your bets. Why? HUI has shown significant correction, on daily, weekly, and monthly charts. That should be very sufficient. Again, it’s likely that precious metals will pull back from current level. But due to the its nature of extreme volatility, the probabilities for both breaking new lows and breaking out are even more significant non-zero. Certainly, I will not want to take a bet on that, but simply staying my current course on my asset allocation.