Last week I suggested that gold developer De Grey Mining [ASX:DEG] could be a good bounce back stock after the June tax-loss selling season was over.
I also had a look at Weebit Nano [ASX:WBT] but said it needs to have a weekly close above $2.78 before the odds of more upside increase.
De Grey opened the week at $1.14 and shot to $1.22 by Thursday, so hopefully you managed to grab a few early in the week.
It’s still a case of searching for needles in a haystack at the moment with stocks drifting sideways for months on end.
Oil, copper and gold have been performing well, with rumours of Chinese stimulus once again doing the rounds.
I kick off today’s Closing Bell video by looking at a comparison of the S&P 500 and the S&P 500 equal weighted index over the last 10 years.
It will make it very clear for you how much impact a few of the biggest stocks are having on this rally.
The equal weighted index is flatlining at the moment and is still trading near the high reached in 2022. The S&P 500, on the other hand, is powering ahead and well above the 2022 high.
A lack of market breadth is a classic sign of a market that may be getting close to a major high, so it is something we need to keep in the back of our mind as we move forward.
The long-term trend remains up so I am positioned for more upside, but I have a clear line in the sand below current trading levels where I will become more risk averse.
As I show you in today’s update, a monthly close in the S&P/ASX 200 below 7,500 (4% below current levels), is when the odds of a correction increase. But until then I’ve got the fingers and toes crossed the market can break out to a new all-time high and continue rallying.
I show you the situation in oil and gold after the recent rally and finish with a look at a former lithium market darling that is showing signs of life after spending the last two years on the canvas.
Regards,
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Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps
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