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February 01, 2022 13:01:17

The Rally Keeps on Grinding

02-01-2022

After spending the morning chopping around on both sides of unchanged, that's about where the indices were at midday. In the afternoon though the market gained strength finishing about 0.75% higher.

Away from stocks, green paper was a little weaker, fixed income was not too heavy, except at the long end. Meanwhile, the metals experienced a small bounce, and the miners had a modest up day.

Time to Throw Its Weight Around GLD took in more tonnes yesterday and it's beginning to look a bit like a pattern, with a decent amount of metal taken in over the last nine trading sessions. This roughly coincides with a Goldman Sachs buy report on gold where they discuss their price target of $2,200 and change. Of course, that report came out just before gold took about a $70 swoon. Nonetheless, there's a chance that we're finally seeing some accumulation of the metal by U.S. investors. If that continues, it will be a very big deal.

As far as the stock market itself, and following up on my discussion yesterday, it's obviously too early to tell whether this is going to be a meaningful rally or just an interlude before we head lower again. Perhaps we'll have some solid information in the next handful of days. My rules for short selling would allow me to get seriously short, though it'd be better if the Fed were actually tightening rather than just printing less. Either way, I'm going to defer to Milton Berg's statistics and data to help me decide if it's time and potentially how big to get on the short side. Whatever I do, I will share it with readers, for whatever it's worth.

Housekeeping There will be no Rap Wednesday through Monday, as I will be traveling. Ask Fleck will run as usual and the Rap will return next Tuesday, February 8.

Positions in stocks mentioned: none.

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