Thoughts on Markets

Friday, November 14, 2008

Excitement Reigns - Be at Peace In the Lord

Silver is at 9.46 on an up tick. The graph curve looks suspiciously like the one on Wednesday, but if it turns south strongly like on Thursday, look out! Hopefully, the boyz are beginning to back off in fear of being shut out.
The gold curve seems to be changing the course of the last two or so days. It looks a bit more interesting today. Gold is up 9.20 to 744.10 at this writing. I have sold some of the trading stock of DROOY purchased this week. The trading range seems to be holding fairly firm. The last trade on DROOY was at 3.61. Yesterday's close was 3.49, but it was as low as about 3.25 yesterday ( great time to buy, but my purchases were some higher than that).

elow we see the dead Merrill Lynch Bull which shows also that the bear has the general market firmly in its claws again. Even after the intervention into the market at the end of the day to push it up some 500, it is down 277+ to 8550+at this time. Not looking to good at this point. By the way, we are seeing a decoupling of gold from the general market and the mining stocks have come our cautiously bullish.
From Casey's Daily Resource Plus: A graphic picture of the demise of Merrill Lynch and the bull market, as well. Here is more >> "Lots of gold news today. In a mineweb.com story I noted that South Africa's September gold production fell 17.7% year over year. As I've said before, production could fall 100% and JPMorgan would not allow it to show up in the price...and any rally based on that news would be capped immediately. The usual NY gold commentator had three points of note yesterday: 1) Investment demand...plus gold sales to India...are still extremely high. 2) Last week the European Central Bank reported that there were NO gold sales at all, and inventories actually rose a hair. 3) After twelve consecutive days, GLD has finally shown some activity...down 8,000 ounces! And lastly, I note in commentary over at Bill Murphy's lemetropolecafe.com that at the current price for gold, 90+% of all December gold options would expire out of the money. So much for a squeeze in the December delivery month. I guess the boyz at JPMorgan/HSBC can read too."

From The Standard in Hong Kong: "The mainland is seriously considering a plan to diversify more of its massive foreign exchange reserves into gold, a person familiar with the situation told The Standard." This is a very important read as other central banks and nations may join the exodus from dollars to gold. That would be the beginning of a real GOLD RUSH. Get the article HERE.

From the Daily Pfennig today: "The dollar continued to strengthen yesterday after another round of bad weekly employment figures. Initial jobless claims increased to 516k during the first week of November, and last weeks numbers were revised up to 484k. The employment picture continues to darken here in the US, and it doesn't look like it will improve any time soon. This is just what the US consumers don't need right now. Not only are most consumers living paycheck to paycheck, but now many of those paychecks are being ripped out of their hands.

Personal bankruptcies are heading into record territory, and job losses will only make this worse. While the total size of the consumer credit market is dwarfed by the size of the mortgage market, with home loans there is an underlying asset providing some base from which banks can work. Credit card debt is different, the banks and investors who hold this debt have no underlying assets to fall back on. This fact has not been missed by the current administration, and Treasury Secretary Paulson is now looking to spend some of the bailout package to try and help out the consumer lenders. Unfortunately it looks like we will be taking another step into the deep dark area Chuck has continually talked about.

This morning we got the retail sales numbers here in the US which showed a further deterioration. Retail sales less autos were down 2.2% in October, almost double economist's expectations. This fall is the largest monthly drop ever, and is just one more sign the US economy is heading for a doozy of a recession!

In spite of all the bad news, we can still look up and praise the Lord for His historical blessings and promises to His people. Think back on the many times the Lord has been very faithful in many of your challenging and troublesome times. He was faithful then, even when the result was not exactly that you sought. We do not always seek the best answer or solution, but He knows what is best for us and we learn to rest in His solution and earnestly thank Him every time.

Study the word, make it the major part of you life, and live in obedience to and enjoyment in the Lord King Jesus. He is in control of everything and everybody. Be still and know that He is such a God.

Best to each, Doug

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