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Thursday, January 5, 2023

Time to regroup for 2023 - Gold, China, Tech,

I have yet to make a trade during the first 2 trading days of 2023, but I am watching several things. 


1. The first thing the hedge funds did, when they returned from the Christmas holiday, was to pull the rug out on Energy stocks, and that must have been planned, well ahead of time, because they also took down Oil, and Natural Gas down. NatGas on Tuesday, and Oil again yesterday.  

I would definitely be a buyer of Energy stocks here, but I don't see any reason to rush in, and risk catching a falling knife. 

If you want help trading energy, make a hefty donation to my PayPal, and I'll see what I can do... 


 The short squeeze in Chinese Stocks Continues, as yesterday's opening bid on the $HSI (Hang Seng) was raised above the previous high, while several US traded Chinese indexes were driven up nearly 9%. 

Golden Dragon up 12.92%  

It's no wonder US stocks barely move, when all this money is being thrown at the china rally

I think once the powers that be are finished pumping China, that money will flow back into beaten up US equities, but I think it's best to sit on the sidelines.  


  Gold has also been on a tear, and we even saw a little false breakout on Gold, priced in Euros   

 I can also show you a little breakout above the 50 day moving average on the chart below

$XAU (Gold & Silver Index) Little breakout above the 50 day, runs into more res. 

Another reason I don't like metals here, is because the inflation story is dead. This is a reminder of what happened in the 1970's when it seems like everybody and his brother, were betting on runaway inflation - when we went off the gold standard - and before you know it, gold had peaked out. 

It wasn't until 1978 that Gold finally broke out... and had a historic run in 1980. 


Gold: the investment trend of the wild 1970s

Granted, gold has been in an uptrend since a brief retest of the Oct low, but this is simply just a retest of the same pattern it's been trading in for 7 months. 
$GOLD - short term trend continues. 

That goes for gold miners as well. 

$HUI (Gold Bugs Index) makes a new recent highs 

Call me silly, but I don't chase low volume rallies, to lower highs, at key FIB targets. This is a recipe for disaster! 

Speaking of disaster. 

Some bad is bound to happen in India, and probably China as well. 

Could be the latest COVID variant that is reported to have a whole new set of symptoms

Coronavirus: An 'early' COVID symptom may occur in your legs and shoulders

I think it's probably best to wait for some of these trades to unwind, before getting too bullish about a possible sector rotation. 

Couple more Charts 

India has been treading water for nearly a year, and no doubt the powers that be have already loaded up on Puts. 

$INDY - I may be adding this chart to the public charts area 

So watch for a sector rotation out of junk stock, like China, and miners, and back into beaten up US equities, and even energy.

In case you missed the past several updates, the trend - on the broader market - remains higher 

Take Care, AA 

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