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Momentum Wrap – Gold & Silver Crash Tank the Market

Margin calls in crashing gold and silver were likely the reason behind the all-encompassing forced liquidation in equities today. Many of the sectors that led the market rally over the past 6 months are currently leading on the downside. Refiners, transports, homebuilders and many other momentum darlings broke down from their bear flags.

The distribution days in the indexes are piling up. At some point, this will matter. There is no reason to hurry up and buy blindly the dips despite the fact that this approach has worked flowlessly this year. Every big correction starts with a small correction. It is hard to now which one is in the making in advance; therefore playing it safe and raising cash is always the way to proceed. Markets are entering in a capital preservation mode and it is wiser to wait for the storm to pass and new strength to emerge before considering any new positions.

New Highs

4 new all-time highs among stocks that gained 1% or more today: $LIFE $SNY $LAND $TTPH

9 new 52-week highs among stocks that appreciated 1%+ today, most of them drug manufacturers and biotech – $SNY, $GSK

$ACOR is the only one that managed to close near its highs for the day. Biotech could remain in their own world for quite some time. Add this one to your watch list. There were vary clear signs of institutional buying in the name.

All St50 stocks finished in red.

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