Here is an update on the stock market and precious metals from one of the greats in the business.

Stock Market & Precious Metals Update
January 15 (King World News) – Here is a portion of what Jason Goepfert at SentimenTrader noted:  Over a shorter time frame, it’s hard to press the upside given the readings we’ve been seeing over the past couple of sessions. If this is any kind of a normal market, then we should see these gains given back in the coming days/weeks. After Friday’s session, with a 1-month high on a 1-month low in volume and a 1-month low in trading range, those signs increased…

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During downtrending markets, it’s very rare for behavior like this to lead to higher short-term prices. So far, buyers are ignoring anything negative and it’s hard to ignore the longer-term message that this is sending. Markets are not doing what they should, and that’s typically a tip off that something has changed. While I’ve been leaning toward the idea that we’re in a longer-term bear market, this kind of price action is making me less confident by the day.

I sold off a part of the U.S. stock exposure I added on December 24 as the rally has led to an increasing number of short-term warnings. I don’t normally pay much attention to such short-term gyrations but in a bear market, I’m much more cautious that way, and tend to be more active. Between that and a cash contribution, my overall allocations dropped and my cash position rose. For now, I’m fine with that.

This rally hasn’t done anything wrong, other than perhaps going too far, too fast. Even that’s a little dicey. On a medium-term time frame, it still looks good so I’m possibly being too cute here by trying to adjust to short- term signals. Hindsight will be 20-20.

Precious Metals
The setup that triggered me to raise precious metals to my largest position in the fall has dissipated and I’m not seeing such a good risk/reward there anymore, so I reduced my position to be more in line with what I typically carry.

Also, here is an important chart from today’s SentimenTrader report (see below).

Fed: Risk Of Recession Spiking

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