Fallondpicks: Weekend update

Markets spent the week digesting their big October and November gains. The attempted break of late November resistance failed in all markets, but the swift decline which often follows such reversals ('bull traps') never materialized. It will have been apparent to my subscribers that my suggested short plays for the last couple of weeks have drawn a blank; never short a dull market and this looks to be holding true. So is an intermediate term (3-9 month) top in place? Given the lackluster performance in the short plays, and continued strength in the tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] the answer would look to be 'No'. The 20-day MAs have held as support in the NASDAQ, NASDAQ 100, and S&P with the previously underperforming small caps lingering close to major resistance, and well above its 20-day MA. Only the Dow looks to be struggling but even here there is major support at 10,708. At this stage another leg up can't be excluded. Gold and Silver continued their strong runs, pushing past psychological $500 resistance. The next pullback in these metals will likely be a great buying opportunity. Watch the 20- and 50-day MAs; the latter MA should provide the better buying opportunity. We are about 4-years into a 20-35 year commodity bull cycle. This first 4-year cycle is close to an end (the parabolic runs in the two metals would look to suggest an important top will be in place soon), but the following 4-year cycle will be the one for the investors to climb aboard as the speculators move to the next hot market. In the precious metal sector the silver stocks look better value: SSRI and SIL should be watched for buying opportunities. For the record, I have been dollar-cost averaging (investing) into GFI, and copper producer PCU.