Mini-Crash Ahead Or Can We Hold Recent Gains? I Would Be Real Careful Here. In Cash or Short!

Commentary below from Mark Leibovit, TIMER DIGEST’s #1 Intermediate Market Timer for the 10-year period ending in 2007, the #2 Intermediate Market Timer for the 10-year period ending in 2009, AND currently the #1 Market Timer for the six-month period ending June 24, 2011. And, the #3 Gold Timer for the Ten Year Period ending 12/31/10
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TIMER DIGEST SIGNALS:

Stocks – NEUTRAL –

Today is a potential ‘Turnaround Tuesay’, but in overnight trading stocks are once again being taken to the woodshed. If I’m correct, about last week’s top being a bull trap (at last for the short-ter,), there is more pain ahead with risk of a more severe decline if the recent lows (1258-1262) in the SPX do not hold. It’s still ‘Sell May and Go Away’ – Stall until the Fall!

Gold – BULL –

I remain bullish on gold even though I know we could be entering another negative seasonality period sometime this summer. The case for gold gets stronger by the day and surprises could still be to the upside. If we can clear the record 1578 high, we’re probably off and running now versus later. The most recent signal is a Positive Leibovit Volume Reversal in gold on Friday, so that’s where I stand I believe if the troubled country or countries ultimate choose to secede from the EU, that could be a big, big positive, akin to cutting a cancer out from diseased patient. For now, strength in gold (and to much lesser degree silver) is very much related to the default of sovereign debt, much as we saw in Iceland a few years ago. Ultimately, bankruptcy is bankruptcy and it has to be recognized as the only solution – the only truth – instead of covering up and hiding a glaring reality.

Bonds – BEAR –

Money is seeking safety and bonds are rallying. It is as simple as that. If we clear recent highs in the bonds (127 01 in the 30-year bond), I am incorrect in my assessment (for now) that interest rates are upticking. With the likelihood that the rally in stocks into July was merely a short-term bull trap, bonds could very well breakout to the upside (lower interest rates).

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