Markets Down, Oil Up
Crude closed at an all time high yesterday at 78.21. That is nearly a dollar more than the previous high. This is an unusual event as oil is usually down at this time of year. At the same time most markets were down.
The Japanese Yen rose against all of the other major paper currencies. There has been an active carry trade. The folks involved, borrowed Yen at almost no cost exchanged the Yen for bonds in other currencies which paid very high interest. With the Yen increasing in value, more funds will be required to pay back the borrowed Yen. Thus, we should see much of the carry trade dropping by the wayside.
Gold has been staying above 660 for the most part of the last two days. It is now at 663.60 and is still bouncing around quite vigorously. The mining stocks are still offering the courageous an opportunity to buy at bargain prices. If you buy, be sure to us trailing stops for protection.
It seems that we are in a period when caution is very important. The markets remain overpriced, but have "corrected" some. The real question is whether this is the end of the bull market for stocks or just another set back on the way to higher prices. I do not believe we have seen the tremendous serge of buying which is typical of the 3rd phase of most markets in the past. Therefore, it seems that this may well be just a temporary set back. The market will reveal the true direction as time passes. Until then, all is just speculation and guess work.
The housing bubble appears to still have along way to go. The sub-prime loan fiasco has yet to reveal the extent of its impact upon the economy and the markets. It has brought about a large set back for mortgage companies and banks which are heavily involved in the business. Several of the brokerage firms have already been hit with some damage. There is more to come, regardless of what the government people tell us. Bankruptcies and foreclosures are climbing throughout America.
We must rejoice in the Sovereign Ruler of all. He is in control and works all things for the eventual good of His people.
Best to each, Doug
The Japanese Yen rose against all of the other major paper currencies. There has been an active carry trade. The folks involved, borrowed Yen at almost no cost exchanged the Yen for bonds in other currencies which paid very high interest. With the Yen increasing in value, more funds will be required to pay back the borrowed Yen. Thus, we should see much of the carry trade dropping by the wayside.
Gold has been staying above 660 for the most part of the last two days. It is now at 663.60 and is still bouncing around quite vigorously. The mining stocks are still offering the courageous an opportunity to buy at bargain prices. If you buy, be sure to us trailing stops for protection.
It seems that we are in a period when caution is very important. The markets remain overpriced, but have "corrected" some. The real question is whether this is the end of the bull market for stocks or just another set back on the way to higher prices. I do not believe we have seen the tremendous serge of buying which is typical of the 3rd phase of most markets in the past. Therefore, it seems that this may well be just a temporary set back. The market will reveal the true direction as time passes. Until then, all is just speculation and guess work.
The housing bubble appears to still have along way to go. The sub-prime loan fiasco has yet to reveal the extent of its impact upon the economy and the markets. It has brought about a large set back for mortgage companies and banks which are heavily involved in the business. Several of the brokerage firms have already been hit with some damage. There is more to come, regardless of what the government people tell us. Bankruptcies and foreclosures are climbing throughout America.
We must rejoice in the Sovereign Ruler of all. He is in control and works all things for the eventual good of His people.
Best to each, Doug
posted by Doug @ 1:08 PM
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