Thoughts on Markets

Friday, September 10, 2010

Mutual Funds Losing Investors - Gold Silver - Uncertainty - Fear

There remains a great deal of uneasiness in all markets. The volatility is high and, as one of the articles reports, retail investors are leaving the markets. The specter of Iran hangs heavily over all. We certainly do not want to expand the war in the mid-East. Also, it seems that we are facing a large tax increase next year compliments of Obama and Congress. This would be a disaster. Perhaps, it is time to replace the incumbents both  Democrats and Republicans. The good ones, can be counted on one hand.

I daily praise the Lord for being in control of all and working all things to His glory and the eventual good of His people.

Both silver and gold are having a difficult job climbing to higher levels. Silver seems blocked out at $20.00. Both are overbought, but neither seems to want to correct significantly at present. I believe a correction is due, but it should not be of long duration, because this is the season which is normally positive for the precious metals. We shall see. I did not sell any FVITF (Fortuna) yesterday. 


Retail Capitulation: Stock Outflows Surge By Over $7.5 Billion In 18th Consecutive Week Of Record Stock Market Boycott
This is getting really ridiculous. In the week ended September 1, domestic equity mutual funds saw $7.5 billion in outflows: the biggest one week outflow in 2010 since the $13.4 billion redeemed in the Flash Crash week. The trend developing is simple: retail investors withdraw increasingly greater numbers in weeks in which the market is down even a little, and withdraw just a little in weeks in which the low-volume melt up presents them with an opportunity to get out at a better price level. Of course, the common thread is that as we have said for 18 consecutive weeks, retail just wants out.  The article is readable and the graphs are very good.  HERE.


Deutsche Bank Said to Weigh Share Sale of Up to $11.4 Billion
Deutsche Bank AG is considering a stock sale of as much as 9 billion euros ($11.4 billion) to boost its stake in Deutsche Postbank AG and meet stricter capital rules, said three people with knowledge of the talks.
Germany’s largest bank approached securities firms to assess their interest in managing the sale, which may take place as early as next week, said the people, who declined to be identified because the plans are confidential. Whether it carries out the offering will depend on the financing commitment it gets from the banks, one of the people said. A potential move to shore up financial status in view of the junk on hand. HERE.


Bangladesh buys 10 tonnes of IMF gold for $403m
The IMF said it sold 10 tonnes of gold to Bangladesh at Tuesday's market price as part of its ongoing program to sell 403.3 tonnes


An argument against adding to your gold portfolio
While no one can say for certain what is likely to happen in the future, at least one analyst believes the risks involved in adding more gold to a portfolio could be too high. While I disagree with this, I provide it for your own consideration. None of us knows the future, because God has reserved it for His glory and will work all out according to His will. HERE.


Kitco Metals Roundup: Comex Gold Steady-Firm Early; Traders Await Fresh News
Comex gold futures prices are trading steady to slightly higher in quieter trading early Thursday, as traders await fresh, market-moving fundamental inputs to drive the market. December gold last traded up $1.50 an ounce at $1,259.00. Spot gold was last quoted up $1.70 at $1,257.50.
As the month of September progresses, the U.S. and European stock markets are not suffering from serious selling pressure, as many market watchers had anticipated. The months of September and October have been historically bearish months for the stock market. The stability of the stock markets has somewhat limited buying interest in gold recently, as gold is viewed by investors has a safe-haven asset. However, it's still just early September and some stock market turbulence could surface quickly during the next six weeks. HERE.

Miners from

Currencies from

Some Prices: FVITF 2.66; SILA 0.73; TBT (Ultra Short on 20+ year Treasuries) 33.53 (up slightly today); DOW up 28 to 10443.50; SPX up 4.56 to 1108.71; Gold up 2.00 to 1246; Silver up 0.26 to 20.00 (Still flirting with the $20 barrier).

Best to each, Doug


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