The market quickly erased a early gap up and drifted lower most of the day before closing narrowly off the lows. The market was weak again today, but still remains within the current wedge pattern that is forming. A wedge pattern is a pattern of indecision, and the bulls and the bears seem to be posturing for an upcoming showdown. The prevailing direction of the market over the last two years, and especially within the last 6 months, has been higher, but the headwinds are getting stronger in the opposite direction. Oil continues to be the main drag, and is weighing on the economy just as the recovery has begun to take hold.
Precious metals gapped up big this morning, led once again by silver, but started to act a little toppy. Gold filled its entire gap to the downside while silver filled only a portion of its gap. The banks showed relative weakness, with Goldman Sachs Group Inc. (GS)) breaking down through the neckline of its head and shoulder pattern. The ags also continued their period of recent volatility, with leader PotashCorp./Saskatchewan (POT) breaking below its recent consolidation.
For more market and stock commentary, watch Scott Redler’s Daily Recap video below
*DISCLOSURE: Scott is long NFLX, AAPL, INVE, GLD; Short SPY, SLV, GS
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