As I was just yesterday yapping about the market showing a sign of topping, it did exactly that. The chart on the Q's clearly shows it breaking near term support as well as featuring ominous divergences. I switched my short term trading positions to short before noon today. Ostensibly, the trigger was the April new home sales figure which showed strong volume at the expense of a large drop in price. But it's hardly news for anyone who followed anyone of the housing blogs. My standard explanation for this type of situation is "if you pile sh*t high enough, it will fall down just from someone walking by it." In all likelihood, today spelled the end of the "Dow will never go down again" rally mode. Although I'm still looking for a final push to new highs later this year, it is a time to tread lightly.
As far as PM stocks are concerned. They took a tumble with the HUI ending at 318.74. I can count 5 waves from its recent 369.69 peak reached on April 16. In addition the $XAU:$GOLD ratio is at 0.203, a hair above the buy zone at 0.19-0.20. We're now in month 13 of the correction that started in May'06. Curiously, the previous rally lasted 13 months. Let's see if this brings any good tidings.