Leading and Divergent IndicatorsA couple of things that I look for have been very strong the last week.
The first is that the Venture exchange is a leading indicator. When the Venture was going crazy last autumn, it was up before the TSX or the S and P started going up. The last two months, the Venture has once again been a leading indicator with big drops while the TSX and S and P were putting in highs.
The last three days while the s and p and TSX have once again been brutal, the Venture has posted much stronger days. Not great up days, but certainly stronger days, so the Venture is not confirming the negative sentiment elsewhere, and it would.
The other indicator is a very bullish one for gold. It was Dennis Gartman who commented on this yesterday as well in his Gartman Letter. Gold acts on a US dollar up/Gold down trajectory pretty much all the time. The last two days, a divergent path has been taken where the euro continued to plunge and gold did a U turn and went up. Very bullish for metals. Silver has followed suit. Copper also has not confirmed a sell off in metals.
A second indicator that speaks of some strength that remains hidden, but should reveal itself to be a stronger market than many are feeling.
One final note and it is again one should consider as bullish for the commodity sector. Goldman Sachs reiterated this afternoon a much higher oil price based on demand side dynamics. A call of an upside of 20 bucks in oil from here is not just an upside for oil, but for the stock market with oil trading often in lock step with S and P sentiment. What Goldman wants, Goldman gets.
So my take is beyond the action of today, we can look at those three strong indicators and believe that CRE will get a stock market bid as well as a stock specific bid at these levels.
(look I just did a post without mentioning Joe) (darn, almost)