Indexes Rolling Over, Momentum Waning, Prepare For a Bear Market
Right now I am urging all readers to raise mental stops and to protect themselves. Major volatility is apparent which is a sign of bear markets and major trend changes.
I am still bullish on gold and silver but am bearish on the overall market.
There are signs of waning momentum and convincing distribution. Although I expect the market to have a brief rally due to the oversold nature of the market, it would be prudent to sell on a rally.
My recommendation is to hold gold and silver and move any non gold or silver equity to cash. I am fearful another global liquidity and de-leveraging of bad debt will negatively affect copper and industrial commodities.
According to my analysis I see a rounding top trend which means that as the rally continued momentum decreased and buying was a lot less evident. Volume dried up during this rally and the air is being let out of the bag. Many fear that the worst is not behind us and banks are tightening again like pre Lehman. I expect the DIA to have a few more down days before an impressive rally up to 10,500. At that point shorting will be an interesting opportunity.