The Dow Jones Industrial Average marched to its 10th straight record close yesterday.
That’s the longest streak of record closes since 1987, MarketWatch notes. And if we aren’t counting all-time highs, the last time we saw 10 straight sessions finish in the green was early 2013.
It’s safe to say investors are feeling giddy as the stock market blasts into uncharted territory. Heck, even the president is retweeting bullish market stories these days:
“In case there was any doubt, the Trump administration sees the stock market as a good barometer of how the economy is doing,” Yahoo Finance notes.
In fact, Treasury Secretary Steven Mnuchin told CNBC yesterday that the administration would look to the stock market as a “report card” for how the economy is performing. Judging by the huge post-election rally we’ve witnessed, it’s no surprise the administration is patting itself on the back.
But if early morning market action is any indication, the streak ends today.
Unlike the Dow, the Nasdaq logged its second day of losses on Thursday. Momentum is beginning to wane. Falling stocks outnumbered the ones finishing higher yesterday. Many popular growth names are starting to get hit with profit taking…
That’s a recipe for a pullback. Markets can’t shoot straight up forever. Now it looks like stocks are going to deliver this friendly reminder to investors via some downside action. Unless Trump signs an executive order banning downticks, some healthy mean reversion is on the way.
I doubt a pullback will change the president’s self-graded “A+” rating on the economy under his watch– no matter how sharp it is. But while every investor in the country remains focused on the record-setting major averages, we’re turning our attention to gold.
As the stock rally loses steam to finish the trading week, gold looks stronger than ever. The Midas metal nearly flunked out to finish off 2016. But the new year helped turn things around in the precious metals world. Thanks to its improved performance to begin the year, gold is well on its way to making the dean’s list in 2017.
Earlier this month, we alerted you to a curious development in gold so far this year: Gold’s advance for the first six weeks of 2017 perfectly mirrored the action we witnessed during the first six weeks of 2016.
Gold had posted gains of 6% through the first week of February for the second year in a row. In both cases, gold bounced off a late December bottom. And in both cases, the gold rally dipped in late January—only to rocket to new highs at the start of February.
Now we’re watching gold extend this rally as we approach the end of the trading month. The metal is streaking higher this morning, rising to new year-to-date highs and prices not seen since early November as world stock markets continue to retreat.
As of Thursday’s close, gold has easily outperformed even the celebrated Dow Industrials so far in 2017. Take a look for yourself:
As you watch the market sink into the red this morning, don’t forget to check out gold’s renewed momentum. If history is any indication, this rally has plenty of room to run.
Courtesy: Greg Guenthner
Please check back for new articles and updates at Commoditytrademantra.com
For More details on Trade & High Accuracy Trading Tips and ideas - Subscribe to our Trade Advisory Plans. : Moneyline