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Market bulls and bears are at a standoff as the global economic recovery struggles — but not all stocks are in danger of slipping.

Major U.S. stock indexes inched higher as optimism that companies will report higher second-quarter profits outweighed fears that job growth is crashing.

Breadth has been the hallmark of the recent advance, but last Friday was a terrible day — losers outpaced gainers by a four-to-one margin. Stocks drifted in a range so narrow at midweek that if you turned it sideways, you couldn't see it.

The bears had a chance to knock sentiment down once Moody's credit-rating service kicked Portugal's sovereign debt down under the counter, below the sink, and into the basement, and a fairly nasty report on the U.S. service economy followed.

But bulls found a way to pump a few more molecules of helium into their uptrend, and the major indexes ended in the green.

And now we have a standoff, the bulls and bears looking at each other over the barricades with a gleam in their eyes — each knowing without a doubt that they are about to take down the other.

I would love to be optimistic, but the data that I see suggests the world has entered into a cyclical industrial slowdown that has crippled business confidence and job growth. So even if second-quarter earnings are good, outlooks will likely be poor. And ultimately, that means stock prices will peak.

As for the situation in Europe, industrial growth is also probably peaking, so the next quarter-point interest-rate hike by the European Central Bank will likely be the last for a while. Capital Economics analysts expected German industrial production data to show a decline of 0.6 per cent in the latest reporting period, sinking to the lowest level in nine months.

The European Community index of industrial sentiment, the IFO manufacturing index, and the region's manufacturing PMI survey have also all fallen recently. Some recovery, huh?

So what worked best in the market when it was rising? Whatever was messed up the most in the prior month. Real estate. Tech. The junky Chinese IPOs. Energy. The worst shall be first.

But that's not all. If that's what it was all about, we could easily get smug about the rebound and expect it to be very short-lived.

The fact is, though, that a lot of very good stocks have been finding favour as well. Like electronic-medical-records standout Cerner.

And Caterpillar, FedEx, DuPont, Apple and, dare I say it, Google.

And select exchange traded funds beat the market like a steel drum, led by iShares S&P MidCap 400 Growth, and iShares Dow Jones U.S. Health Care. These are your leaders.

And let's not forget to go for the gold.

Gold futures have been shooting higher over the past week, in contravention of the usual seasonal pattern in which they normally move higher at the end of the summer. Part of the reason may be the downgrade of Portugal, combined with turmoil in the Italian and Spanish stock markets, the widening of the spreads on Italian and Spanish credit, and rumours of a coming downgrade of Irish debt.

A lot of people seem to think that the next round of downgrades and piling-on will wait until the Europeans complete their August vacations, but I really doubt they will wait.

Right now, gold is within an inch of its all-time high — yet shares of gold miners are down, as benchmarked by the Market Vectors Gold Miners, which is still 15 per cent off from its high.

We made very good money in the gold miners last year in the late summer, and I have been planning to wait again. There is no rule that says the miners' stocks have to follow the metal; in fact, many large South African miners are being hit by a wave of selling due to rumours of a potential nationalization.

Gold shares are certainly inexpensive now, and could become even cheaper in the next few weeks. Seasonally, they usually start moving up in August, but two years ago they began to rise in July, and last year it was mid-July.

A new all-time high in the yellow metal may mean it's time to buy some GDX, even if the calendar says it's still a little early.

Jon Markman is editor of Trader's Advantage

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