With the Dow trading near 26,500, the question everyone is asking right now is, do we melt up or melt down? Here is the answer.
“I think the risk right now is that we have a melt up in the equity market while everyone is under-invested, not a meltdown.” — Larry Fink, Blackrock
April 17 (King World News) – Jeff Saut, Chief Investment Strategist at Raymond James: I received a lot of questions about Larry Fink’s (CEO of Blackrock) statement on CNBC yesterday when he said, “I think the risk right now is that we have a melt up in the equity market while everyone is under-invested, not a meltdown.” I also got a lot of questions about my statement that, “In bull markets, most of the surprises come on the upside!”…
To listen to billionaire Eric Sprott discuss his prediction for skyrocketing silver
as well as his top silver pick CLICK HERE OR BELOW:
That said, my short-term energy indicator still suggests the equity markets are out of gas on a trading basis and need time to rebuild their energy. As often stated, my long-term energy indicator remains highly bullish. And yesterday was another “stall session” (just like Monday’s session) with the S&P 500 (SPX/2907.06) up a mere 1.48 points. Regrettably, my short-term timing work continues to show the stall should extend for a few more sessions.
Accordingly, I would not chase stocks right here, yet longer term, I remain highly bullish despite the chants from a number of pundits I saw on CNBC yesterday stating that the stock market is priced for perfection. In my view, nothing could be further from the truth.
Looking at the longer term, I recently received an excellent report from our friends at Federated titled, “2019 Principals for Successful Long-Term Investing.”
1. Plan on living for a long time and save more for it.
2. Cash is not always king, even when, like now, a lot of people are relying on it.
3. Harness the power of dividends and compounding. Investing in risk assets – and reinvesting dividends – can be powerful moves.
4. Avoid emotional biases by sticking to a plan. Don’t let biases – home-country or otherwise – sway your better judgment.
5. Volatility is normal; don’t let it derail you. See through the noise.
6. Diversification works. Time and again, diversification serves its purpose.
7. Staying invested matters. It’s always darkest before the dawn.
As for yesterday, Financials (+1.37%) and Energy (+0.64) were the best performing sectors, which is why we have highlighted them for quite some time. Again, as our pal Leon Tuey writes:
Last week, all the A-D Lines closed at record highs along with the QQEW, XLY, & IYR. What bear market? Today, both the DOW A-D Line and the NYSE A-D Line closed at record highs again. Others will be updated later today. As mentioned, the various market indices, too, will post record highs. Also encouraging is that, globally, the financials are breaking out. Clearly, the bull market has resumed. This sector is not only interest-sensitive, but economy-sensitive. Moreover, next to technology, it’s the second biggest weight on the S&P. The breakout augurs well for the equity market.
And then there was this from the astute Lowry’s Research Organization:
The DJIA and S&P 500 staged mediocre rebounds today after yesterday’s nominal sell-off. Up Volume was 57% of total Up/Down Volume, Advancers were 54% of total Advance/Decline Issues and NY Comp. Volume remained light at 3.3 billion shares. Buying Power and Selling Pressure were both unchanged, while the Short Term Index rose one point. With the market seemingly stuck in neutral, a short-term overbought condition and ongoing signs of selective strength continue to suggest elevated near-term risk.
The Turnaround Tuesday attempt was disappointing, especially when an expiration week tends to have upward bias. When the equity markets fell during the final hour yesterday, a “V” shaped rally developed after the S&P 500 traded with a 2900 handle (low of 2900.71). That makes the 2900 an important support level today. Participants want to make Wednesday an upward squeeze on expiry call options. The time for the expiry squeeze is down to two days. The market is closed on Friday.
For those who missed it…
Brett Heath: “Alamos Gold, a multi-billion dollar market cap and well-respected gold producer, just made an $8 million dollar bet on Metalla Royalty. This shows a high degree of confidence from some of the smartest minds in the mining sector that Metalla will be able to continue to be a top performing royalty company in the future. One of the best ways to make money in the mining sector is to manage risk. Metalla now gives investors exposure to 43 royalties on some of the most exciting gold projects in the world.
This transaction with Alamos Gold will give Metalla one of the most attractive development portfolios in the royalty sector. Billions of dollars will be spent by the underlying operators to bring these projects into production. Metalla’s investors will have the benefit to capitalize on the built-in growth and top-line cash flow that it will generate.” Metalla Royalty is the top performing royalty company in the world in the last 12 months, symbol MTA in Canada and MTAFF in the US.
***Also just released: Trey Reik – Massive Gold Premiums In India As Global Gold Demand Remains Strong CLICK HERE TO READ.
***KWN has released the powerful audio interview with James Turk and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.