The Day the Streak Died

It was a fierce fight into the closing bell. But all streaks must eventually come to an end. Wednesday June 5th, 2013     The Day the Streak Died   Another streak bites the dust… "Turnaround Tuesdays" and buying climaxes Plus: Another scenario for gold's long-term prospects   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner It was a fierce fight into the closing bell. But all streaks must eventually come to an end. The Dow's latest march to new heights has been nothing short of impressive this year. The Big Index closed higher for 20 consecutive Tuesdays. Yesterday was almost 21. Almost… "People have been calling these up days 'Turnaround Tuesdays,'" writes Jason Zweig over at the Wall Street Journal's Total Return blog. "We think they should be called 'Booby Tuesdays,' because anyone who believes there's any predictive power in them is foolish. And we can't wait to say good riddance to them." Can't argue with that. I wouldn't advocate buying Monday's close in an effort to play the Tuesday bounce—even if it would have worked for the past five months. I doubt anyone would… But that's not the point. The Tuesday streak wasn't interesting because it was used as a timing tool. Instead, it was a market quirk that demonstrated just how orderly this recent rally has been. Don't overthink it. Back to the day that broke the streak. What did we see? Gold? Down Stocks? Down. Bonds? Down. Red across the board... There was also a lot of selling under the surface. Breadth continues to weaken—fewer stocks are rallying. That's a red flag. No need to sound any alarms just yet. But it's a good worry to keep in your back pocket. Speaking of worries, it looks like you've been doing your homework… "In the week ending May 24th there were 864 buying climaxes, the second highest in nine years," writes an observant reader. "This level of data usually appears around tops. Can it go higher? Yes, but the second highest in nine years is certainly a warning sign." True. Buying climaxes (stocks hitting 52-week highs, then closing lower the same week) are hitting in clusters. There's obviously some profit taking happening out there. Something else to keep in mind as we watch stocks slowly inch lower this week. Here's the rub: a rising market feels idiot-proof. For most of 2013, throwing darts netted more winners than losers. But these conditions weren't going to last forever. It's getting more difficult to squeeze a buck out of stocks—and that's panicking everyone who's gotten a little too comfortable over the past six months. However, the market isn't signaling us to drop everything and head for the bunker just yet. What you need to do right now is watch where the money lands as it flows out utilities and other underperforming names. Sectors that outperform the S&P on the down days during this pullback have a good shot at becoming new market leaders…     Rude Numbers Targets, Predictions and Wild Guesses   520 Zynga staffers are now looking for work. The troubled social gaming provider cut 18% of its workforce earlier this week $1,395 is where you'll find gold futures this morning. Meanwhile… $22.33 marks the price of silver futures right now. Holding steady for now… 518 points dropped from the Nikkei today. That takes the Japanese index down to 13,014—one step closer to official bear territory (20% off its highs). 7 quick points fell off S&P futures early this morning, pointing toward a lower open for U.S. stocks…     Rude Trends When to Buy... When to Sell   Once again, gold futures are having trouble holding $1,400. I suspect more choppy action (and lower prices) in its immediate future. But there's another scenario for gold's prospects—one that involves the physical metal breaking away from the spot price. "Why?" Addision asked in yesterday's Daily Reckoning. "Because people no longer trust the paper-backed metals and instead want to hold the physical thing." To learn how this event could unfold (and how you could profit from its aftermath) you need to watch this extremely urgent interview with commodities expert Jim Rogers and general manager of Hard Assets Alliance Ed D'Agostino. This FREE online video event airs June 11. Sign up today to reserve your spot. P.S. Don't forget to try the Rude Pro for free. Click here to get started... [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]     Ignore At Your Own Peril Today's Must Read Links   The Day You'll Remember Forever WARNING: You might not know it -- yet -- but Obama's White House and Congressional Republicans just sold you up river... Is "Big Oil" Scared of This Breakthrough?     BE SURE TO ADD dr@dailyreckoning.com to your address book.       Additional Articles & Commentary:         To end The Daily Reckoning's Rude Awakening e-mail subscription and associated external offers sent from The Daily Reckoning and The Rude Awakening, cancel your free subscription here. Please Note: If you unsubscribe from The Rude Awakening, you will also be unsubscribed from The Daily Reckoning. The Daily Reckoning's Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Agora Financial delivering daily email issues and advertisements. Please read our Privacy Statement. For any further comments or concerns please email us at dr@dailyreckoning.com. If you are you having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by whitelisting the Daily Reckoning's Rude Awakening. © 2013 Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. A lthough our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security they personally recommend to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation.Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.