April 15, 2013 at 10:17 AM EDT
ETF Periscope: Gold Gets Smacked Down as Wall Street Continues to Soar
Courtesy of Daniel Sckolnik, Sabrient Systems and Gradient Analytics “Success is not final, failure is not fatal: it is the courage to continue that counts.” — Winston Churchill For the moment, investors continue to see any signs of a sharp market drop as a clear buying opportunity, rather than as a time to panic and exit the market. In other words, greed currently trumps fear on Wall Street. Is this a perfect time for a contrarian play or what? At the moment, the best answer probably falls into the “or what” category, though the slew of this week’s upcoming Q1 earnings reports from multiple key players such as Coca-Cola (KO), American Express (AXP), International Business Machines (IBM), Microsoft (MSFT), Google (GOOG), Intel (INTC) and Yahoo (YHOO) will go a long way towards addressing the question of whether the current full-bodied Bull charge can continue to be sustained. Expect to see earnings results hit expectations in the main, due at least in part to the fact that corporate America has, for the last several years, generally tightened operations across the board, including hiring less, decreasing R&D, hoarding cash, and simply clamping down on any aspects of business that would limit the likelihood of the bottom line turning to red. Whether this short-term mentality proves long-term smart remains to be seen. With overall limitations on new hires, lack of expansion, and corporate infrastructure development having been the watchwords of many corporations since the crash of ‘08, the belt-tightening may end up hitting the U.S. consumer-based economy by keeping unemployment numbers high and consumer sentiment low, ultimately relegating Main Street discretionary spending towards the recessionary end of the spectrum. What is interesting is that Wall Street seems unconcerned by the macroeconomic picture, shrugging off potentially destabilizing events such as North Korea’s irrationality, ripple effects from out of Eurozone-member Cyprus, and currency-war implications emanating from the hot printing presses of Japan. Hard for investors to feel bad during an uptrend, unless, of course, you are a Bear moaning and groaning atop a mountain of short positions. Until, that is, one or more of the previously referenced factors moves from the current low level of concern to a point of high worry. Whether or not the fundamentals of the market really warrant the current chart-topping index highs remains to be seen. It’s always worth keeping in mind the often-repeated refrain of legendary…

Courtesy of Daniel Sckolnik, Sabrient Systems and Gradient Analytics

“Success is not final, failure is not fatal: it is the courage to continue that counts.” — Winston Churchill

For the moment, investors continue to see any signs of a sharp market drop as a clear buying opportunity, rather than as a time to panic and exit the market.

In other words, greed currently trumps fear on Wall Street.

Is this a perfect time for a contrarian play or what?

At the moment, the best answer probably falls into the “or what” category, though the slew of this week’s upcoming Q1 earnings reports from multiple key players such as Coca-Cola (KO), American Express (AXP), International Business Machines (IBM), Microsoft (MSFT), Google (GOOG), Intel (INTC) and Yahoo (YHOO) will go a long way towards addressing the question of whether the current full-bodied Bull charge can continue to be sustained.

Expect to see earnings results hit expectations in the main, due at least in part to the fact that corporate America has, for the last several years, generally tightened operations across the board, including hiring less, decreasing R&D, hoarding cash, and simply clamping down on any aspects of business that would limit the likelihood of the bottom line turning to red.

Whether this short-term mentality proves long-term smart remains to be seen. With overall limitations on new hires, lack of expansion, and corporate infrastructure development having been the watchwords of many corporations since the crash of ‘08, the belt-tightening may end up hitting the U.S. consumer-based economy by keeping unemployment numbers high and consumer sentiment low, ultimately relegating Main Street discretionary spending towards the recessionary end of the spectrum.

What is interesting is that Wall Street seems unconcerned by the macroeconomic picture, shrugging off potentially destabilizing events such as North Korea’s irrationality, ripple effects from out of Eurozone-member Cyprus, and currency-war implications emanating from the hot printing presses of Japan.

Hard for investors to feel bad during an uptrend, unless, of course, you are a Bear moaning and groaning atop a mountain of short positions. Until, that is, one or more of the previously referenced factors moves from the current low level of concern to a point of high worry.

Whether or not the fundamentals of the market really warrant the current chart-topping index highs remains to be seen. It’s always worth keeping in mind the often-repeated refrain of legendary…
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