There is little I'm watching more closely these days than precious metals. My view – – and this is an extraordinarily unpopular one – – is that precious metals are topping out and are at the cusp of turning lower. The charts below – GDX, GLD, and SLV (respectively) are ones I am keeping a very close eye upon.
Now, please, I'm begging, don't start the religious drumbeat about why gold is going straight to $5,000. I know that 99.9% of the public is crazy about precious metals right now. I was looking through a widely-respected newsletter on technology stocks last night, and 30% of it was about gold and why he's ga-ga over owning it. And I know about Paul Tudor Jones. And India. And all the rest of it.
But I'm a contrarian at heart, and when everyone on the planet just knows gold is heading straight up, I'm inclined to look the other direction. Appropriately enough, the front page of MarketWatch this afternoon featured an article on why gold was going to triple in price (in the midst of all kinds of other optimistic stories).
In any case, I've got bearish positions on gold and silver right now, and I'm also monitoring their behavior as a sign of equities rolling over. Friday – – and its pre-opening jobs report – – is bound to be interesting for traders.