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Stocks Attempt To Decline, But Fail Miserably

02-24-2017

In a "shocking" development, the stock market was actually about 0.5% lower right out of the blocks today, but then the Bubbleonians remembered that the indices are only meant to go higher, so they spent the rest of the day eradicating the red ink and turning equity prices slightly green.

Away from stocks, green paper was mixed, fixed income was aggressively higher, and the metals gained ground as well, with silver adding about 0.75% to gold's 0.5%. Meanwhile, the mining stocks just continue to mill around.

Rest Stop? Or Rally Top? As I have noted, it is possible, given the big run the miners have had off the lows, that they have been forced to digest those gains while waiting for higher gold prices. However, it is also possible that their stumbling means the gold rally is going to run out of gas, i.e., they are basically signaling that a correction is due. I'm not sure which outcome will prevail, although I lean towards the former (just not with strong conviction).

There is no reason to assume that gold stock buyers know where the gold price is headed, although many observers in the gold stock complex have noticed that the miners do tend to lead gold. But as I said, that is only a tendency, not a slam dunk, as there is no rational reason those buyers would have any special insight into where the gold price is headed.