Bull Market Just Beginning, and Great Week for Gold

by JDH on May 13, 2017

So there was a story last week that said that a life changing rally is shaping up in the stock market.  Hard to believe, right?  The markets are at or near all time highs, so how is it possible that the bull market is just getting started?

The theory is that, if you look at the Nasdaq, it peaked in 1999, crashed with the dot com bubble, and didn’t regain it’s previous highs until July 2016, 17 years later.  So, now that we have made new highs, our low interest rate environment will fuel economic growth, and we are in for a few great years on the stock market.

I don’t believe it, but it is a plausible theory.  If Donald Trump actually does cut business regulations and taxes, and brings jobs and capital back to America, the markets could go higher.  It’s also likely that, as with most bull markets, the end comes in the form of a “blow off top”.  So we shall wait and see.

Gold – A Good Week

Of more interest to me is gold, which finally had a good week.

As you can see from the chart of NUGT – Direxion Daily Gold Miners Bull 3x Shares NYSE + BATS, a nice bottom formation is forming.  The $35 level puts it back to where it was around April 25, so the next resistance level is around $40.  Fortunately for me I was buying in the high 20’s, so I have already placed my sell orders at $38.  Take the money and run, hopefully next week.

The juniors did well this week as well, but I’ve got my sell orders in on them in anticipation of the GDXJ re-balancing.  I’ll want to be in cash when that happens.

That’s the report, short and sweet.

See you next week.