Thoughts on Markets

Wednesday, November 12, 2008

Bear in Control of Markets

Here we see the temporary cause of the drop in gold and mining stocks. The US Dollar is flexing its muscle for the time being. It may be receiving some support from abroad as the central banks do not want to see the dollar drop to it real value in relation to other currencies. Only the Japanese Yen is standing tall with the dollar. The carry trade is having an impact upon both.
The mining stocks are taking the strong dollar on the chin. They are being whacked very hard. DROOY was down to the mid 3.20s today. I added to my trading stock. The trading range may have dropped some, but the drop in price was too steep, too rapidly. I believe the mining stocks are temporarily over sold. However, the bear is firmly in control of the general market. That impacts upon the mining stocks,as well. The rest of this week is a very critical time in the markets. Use great caution and exit as much as possible on any upward move.
Gold was really slammed again today. It is not doing well in Asian trading tonight. It is a bit higher to 713.80 on an up tick. Hopefully, it will have another upward bounce tomorrow, so I can take advantage of the move and sell some of my trading DROOY. We must learn to be very patient in these markets. Wild and bear woolly days are in the offing. Expect volatility and extreme moves.
The DJI had another awful day. It is really getting scary. Halloween has passed, but the fright continues. Perhaps, this is just a hang over of the trick or treating that many of you participated in this year. Actually, I celebrate Reformation Day rather that a day for the Devil. However, the DJI did fall farther into the tank today down some 411+ points. That is a another big bashing for the general stock market.
Here is the Wilshire 5000 which is a broader index for the general market, but it looks even more awful. Sorry that it is not as clear as I would have preferred. However, you can see that it is way below any moving average and is in terrible shape. The red move today was awesome. Expect more!

Well, it remains comforting to know that the one true God of all is in control. We take great comfort in His love for His people and His promises to them. The Bible is full of great blessings that God provides and has for the future in the lives of His people. Praise Him daily and be eternally grateful for His word.

Best to each, Doug

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