Rok-n-Dan's Market and Sector Analysis with Fidelity Select Sector Funds

Dan Caldwell

7/24/17: Have been getting a lot of emails re: gold/silver mining. The sector is oversold and IMO is consolidating getting ready for a fall seasonal rally. COT gold and silver futures short interest is at a level last seen in Dec. 2015, from which gold rallied 30% and PM mining shares doubled or more. Also, in terms of PM mining demand/supply, recently released data shows that over the past 3 yrs. the US has been exporting about 30% more gold than it imports, scraps, and mines, and this deficit cannot continue. HOWEVER - markets can remain overbought (Gold Miners Bullish % Index, p.3) and oversold for extended periods, so stay away from margin and be patient. On the plus side the US dollar is weakening (p.3) and my FED INFLATION/DEFLATION chart (bottom, p.3) is also weakening suggesting that the economy is returning to deflationary mode, therefore the FED is likely to continue to be accommodative, good for gold and silver. Also, keep in mind that 35% of mining expense is the cost of fuel, that's been dropping, and those costs saving move straight to the miner's bottom line.

00000 Shanghai Stock Exchange Composite Index (EOD) ($SSEC)

0000a1 XAU Index to Price of Gold Ratio ($XAU:$SILVER)

0000a1a Gold & Silver Index - Philadelphia/Gold - Continuous Contract (EOD) ($XAU:$GOLD)

a01 NYSE Summation Index (Ratio Adjusted) ($nysi)

a01a NASDAQ Summation Index (Ratio Adjusted) ($nasi)

a02 S&P 500 to Volatility Index ($spx:$vix)

a03 Russell 2000 Small Cap Index ($RUT)

a03 Russell 2000 Small Cap Index/Russell 1000 Index ($rut:$rui)

Added 2/10/06. When small caps start to lag larger cap stocks it usually signals a market correction. When the small caps start to lead large caps then buy with gusto!

a06 Copper Futures - COMEX ($copper)

3/20/08 It's interesting to note that LME copper inventories are falling to record lows as we enter the strongest demand period leading up to the summer months, even as copper prices retreat (source Kitco Base Metals. com) and copper prices remain in backwardization (source Metalprices. com), typically a bullish indicator. Could it be that we're seeing a 'takedown' in commodity prices to allow big money, like Calpers, to buy in at lower prices?

AAb Gold - Continuous Contract (EOD) ($gold)

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