Friday's jobs report was stellar, which spiked the US dollar, tanked the stock market and crushed precious metals. It's becoming clear that the US economy has recovered from the Great Recession and appears to be picking up steam. The claim by the naysayers and gold bugs was the economy was going to have an L shaped recovery (no recovery). For a while they seemed to be correct, but students of economics know that recovery from recessions caused by financial crises simply require more time and stimulus than normal recessions. The proof is in the pudding – had it not been for the massive stimulus by both government and the Fed, we could easily have slid into another Great Depression. Bernanke must feel vindicated.

The reason stocks and gold went down Friday is that it now looks like we are in for a cycle of Fed tightening. The stock market likes easy money, and gold desperately needs it. Historically stocks have done well in the early stages of Fed tightening, so I believe the general market is still OK on an intermediate term basis. Gold, however, is in great danger of a long term decline, or at best just bouncing around at current levels. Gold needs either easy money or a major crisis, and the easy money appears to be drying up. So barring a crisis or at least a large pullback in the US dollar, gold is probably not a good investment in the intermediate term. Regarding the stocks, GDX has broken down and looks destined to once again test last year's lows. Seasonality is no longer positive, so there are better places to be for now.

Personally, I've reduced my PM stocks but still holding small positions in rare earths and uranium. But my main focus right now is solar stocks – TAN (the solar ETF) has broken a year long downtrend. The downtrend looks to me like an extended bull flag. If I'm right, the solars are headed much higher. They are still down 80% from their peaks, so they have a lot of room to move. Currently overbought, they could pull back short term. If they do, I will consider it a buying opportunity.