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Stocks & Gold: Our SA Articles on Where the S&P 500 & Gold Are Headed

S&P 500: The Bull Market Is Back

Summary

  • S&P 500 has rallied more than 13% since February 11.
  • Market internals and risk appetites indicate that the correction is over.
  • After an absence, the “Fed put” is back in play.
The stock market has had an incredible rally from an extremely oversold state since bottoming on February 11. The SPDR S&P 500 ETF (NYSEARCA:SPY) has rallied more than 13%, regaining all losses from the early weeks in 2016. Besides excesses in bearish sentiment and investors being underexposed to stocks, one of the primary factors behind the rally has been the Federal Reserve's shift towards a more dovish tone. This is somewhat contrary to expectations after it raised rates in December of 2015.

It looks like gold's move higher is running out of steam.

The critical question for investors and traders at this juncture is whether or not the stock market correction is over. A compelling case can be made that the bull market is resuming and that a "buy the dip" environment has returned. Of course, there are some very good reasons such as an "earnings recession" and valuations to be less enthusiastic about this possibility... READ MORE



Lower Prices Ahead For Gold

Summary
  • Gold has seen inflows as a result of the falling dollar, recession fears and a more dovish Fed.
  • Despite some hiccups, the US economy continues to grow with hints of acceleration.
  • The market is now underpricing the risk of rate hikes in 2016.
After being mired in a prolonged bear market, gold prices have aggressively moved higher from their low in mid-December around $1050 to a high of $1285 in mid-March. This has led to a resurgence of interest in precious metals and hope that the bear market has ended.

Such extreme moves out of oversold conditions typically begin as short squeezes. If fundamentals improve, there is the potential for a change in trend; otherwise, the primary trend will reassert itself. This article will examine some of the reasons behind gold's move higher, and why these are not enough to sustain a change in trend.

Despite the rise in gold prices, the balance of evidence favors that this is a short squeeze. Traders and investors should take advantage of this opportunity to sell precious metals positions at these elevated prices... READ MORE

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