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

Dan Caldwell

4/30/16: Have been getting a lot of emails re: gold/silver mining. The sector is overbought and has made significant gains, and a ST correction would be healthy, but the sector is coming off of a 3 yr. very oversold market condition, and is now experiencing a strong snap-back rally. Can it go higher? My technical analysis suggests 10-15% more before a correction, but markets can remain overbought and oversold for extended periods, so buying PUT insurance may be prudent. On the plus side the US Dollar rally is correcting, with an 88 target on the index, and my FED INFLATION/DEFLATION chart indicates we are moving from deflation towards inflation, i.e. accommodative policies. Also, it took longer than expected, but 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. Third, as the USD falls, gold rises in terms of foreign currencies, and gold is experiencing a bullish breakout in Chinese, Indian, Russian, British, Euro currencies, etc. 4th, multiple bullish golden crosses are popping up all across the materials sectors, so the rally could definitely extend further.

aad US Dollar Index - Monthly (EOD) ($USD)

aad US Dollar Index Weekly

acb $TYX:$TNX- Ratio

acc 30-Year T-Bond Yield ($TYX)

acc 60 min 10 Year $TNX

acd Monthly 30-Year US Bond Price ($USB)

acv - Inflation / 30Y Bond Price Ratio (vipsx:$usb)

AUA Gold Miners Bullish Percent Index ($BPGDM)

aua2 Silver (EOD) / Gold (EOD) Ratio ($silver:$gold)

aub $HUI vs. US Treasury Bond ($hui:$usb)

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