Thoughts on Markets

Monday, September 29, 2008

DJI Off 777.68 - Biggest One Day Drop Ever

There we have it! The DJI off 777.68. That is nasty, nasty, nasty! This is a new low in recent times. Now move to the Transportations.
This, too, is nasty, nasty, nasty! This is confirmation with the DJI in this move. The general market looks very bad. It is not a nice place to be these days. I wish I had more puts in place, but that is hind sight. I did unload Financials puts today for some profit. Now let's move to the gold miners.
The mining stocks were down, but not nearly as much. And the dollar was a little stronger today. I added some more DROOY at 4.88. It closed at 4.60. My purchases always seem to drop immediately upon purchase. It is like buying a new car and losing on the deal as you drive away. However, most often the stocks have bounced back rather soon after. Cars do not!
The AMEX Gold Bugs Index shows a drop, as well, but like the GDX nothing like the general market. Both the miners and gold bugs (MACD) seem to indicate a turn downward.

Gold held up pretty well and is now $904.10. Silver is 13.09 with a lack luster showing for the day. Silver continues to lag behind gold. Its day will come.

The Royal Canadian Mint does have gold and silver coins for sale. The premium is high, but the coins are new and available. One can also check with Kitco, Investment Rarities, and Franklin Sanders for pricing many coins. Delivery may be a bit slow, because the demand is very high.

It seems that the bail out (now "Rescue Package") is on it way to passage. More, rather, greatly increased inflation is on the way.

Wachovia went under today, but was bought by Citicorp after much persuasion by FDIC. That is better than a take over by the government, but not a lot better. Soon all financial institutions may be under control of our socialistic/totalitarian government. Then watch the expansion of big government.

The Fortis Dutch Belgian Bank (from the 1800s) is in big trouble and a "Rescue Package" is being discussed by Belgium, Luxembourg, and the Netherlands.

The continued financing of our deficit spending seems to be more in question these days. Were that to stop, we would simply issue more dollars for more inflation. Welcome to the 3rd World. It is really time to get out of debt. To have some cash on hand. A corrolary to that is check the health of your bank. More are in line for problems.

Let us keep our eyes, prayers, and hopes solely on the Lord Jesus Christ in whom we may have the sure hope of His promises to His people. We can rest in peace amid all kinds of storms with Him. He is in control whether one acknowleges that or not. Our individual and church beliefs do not change facts, but have a tremendous impact upon our lives and well being.

Best to each, Doug

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