Bill Cara's Blog for Nov 8, 2012

he S&P 500 dropped 2.4% following the election. There is a lot of handwringing now about the fiscal cliff, but the market could be bottoming any day now. Gold held its own with many miners making gains on the day. Gold often bottoms before stocks so that is a good sign for the equity market especially because it has been rallying as the US Dollar shows strength.
Last Friday I posted the following chart noting that risk assets would decline should the dollar continue to rally:

Here is that chart updated with the Dollar rallying over that resistance:

The US Dollar is up again this morning but that rally is getting long in the tooth. I think Gold is sniffing out a top in the Dollar. Once the Dollar's short-term top is in, gold and stocks will rally and I think Gold should rally hard considering that it has been swimming upstream the last few days - once it is going with the current it will be much easier.
Gold's chart continues to improve but could not close over the resistance line. I believe that it is only a matter of time and the Dollar finding a top.
Gold:

Stocks still need a little work. There was a lot of buying during yesterday's drop so I think we could see one more whoosh lower to mark the low or a slow day or two and then a move higher.
Stocks:

That was quite a selloff in oil yesterday. We could be getting close to a low there as well so be looking at energy names now.
Oil:

Now is not the time to be embracing fear, but the time to be getting your shopping list in order. We did that with Gold and it is working well so far. There are a lot of great stocks on sale and they may be cheaper in the next few days but I think we are close to shopping season.