Dollar intervention efforts by global central bankers and jawboning about support for Greece proved to be the secret sauce to get the major market indexes moving higher during the past five trading days.
If all-around efforts continue to assist Europe, we might even see a break out the current 6 week trading range. However, there will be headline risk, depending on the outcome of the Fed’s 2-day meeting, as well as a speech by the Greek prime minister after the IMF/World Bank gathering.
It promises to be a week with a lot of potential fireworks. As one analyst said “there will be rallies like we had this week but until the trend changes, they should be sold into.”
In regards to the ETF Master Cutline, last week’s rally had some effect in that there are now 51 ETFs positioned above the line (up from 34), while 345 ETFs still hover below it and in bear market territory (down from 362).
Despite its pullback this week, gold ETFs still remain in the top spot followed by various government bond funds, which continue their moves to higher ground as lower interest rates support upward momentum.
Take a look the latest report:
[If you are not familiar with some of the terminology used, please see the Glossary of Terms.]
As I have said repeatedly, this is not the time to be a hero and engage in equity bottom fishing below the cutline, as the trends clearly point down. Right now, you need to step back and let this situation play out until better opportunities present themselves. Remember these timeless words of wisdom: “Cash is a position too.”
Disclosure: Holdings in GLD