Last month we wrote that we had no interest in playing even an “oversold bounce” in the precious metals, and our view hasn’t changed. Crude oil has already fallen to its long-term, inflation-adjusted mean; if gold does the same, its downside extends below 700.
Industry groups and stocks continue to set records with performance correlations. Defensive groups have seen the largest percentage gain to current correlations relative to the last five years. There truly has been no place to hide in this market.