Take a look at this chart on gold:  Apparently gold is at an important point.  If it breaks below the green line, it is expected to drop substantially.  But, what if it doesn’t?  Is this uptrend sustainable?  The chart covers only the last eleven years, omitting its $800 high some twenty years ago. Gold could … Continue reading A Beneficiary of Political Indecision?

The third quarter ends today . . . Good!  It was awful, with the S&P losing about 12.5%.  That’s the good news.  The bad news is that October is usually the worst month of the year!  At 5AM, futures indicate the Dow will open about 90 to the downside, a fitting end to an awful month and … Continue reading Good Riddance!

Realizing that the linkage between the economy and the stock market can sometimes be tenuous, it was good to see the latest economic releases this morning.  I’ve been saying the underlying economy was weak but not as weak as most people think.  Today, the final GDP growth rate for the second quarter was released.  It … Continue reading The Underlying Economy

The market is often described as panic-depressive, because it over-reacts to most everything.  Maybe, it is just a matter of degree, but I have never seen it so headline-dependent.  (Of course, everthing is different in the face of a financial crisis, which is entirely different and much worse than a standard recession.) Fortunately, the German … Continue reading Headlines, Theories and The Market

The market “prices in” various risks.  For example, as the market worried increasingly about the European crisis, it continued to discount the value of stocks lower and lower.  It would stay low until worry about that risk subsided.  Yesterday, there was a surprise CNBC report, that seemed to come out of left field, saying there … Continue reading Out of Left Field . . . A Miracle?

History is more interesting than instructive, unfortunately!  If you re-read Friday’s blog, you’ll recall the observation by the revered Art Cashin of the Thursday/Monday syndrome, whereby Thursday is very bad, Friday is choppy and Monday is terrible (reflecting “capitulation”).  Then, a long bull market begins on Tuesday. On Friday, I predicted this is unlikely without some … Continue reading The Market Will Open Higher . . . Darn It!

My frustration with the Tea Party has been their simplistic focus on spending, without making the critical distinction between entitlements (which consume the vast majority of government spending) and discretionary spending (which is a far smaller problem).  I’ve discussed in this space before that a 100% elimination of discretionary spending would not eliminate our deficit … Continue reading A Society of Fear?

This was a miserable week for Wall Street, with the Dow down 6.4%.  That was the worst week in almost three years.  It was like investors collectively but suddenly realized the whole world has a leadership vacuum.  In addition, a lot of other things were happening beneath the headlines. World markets got hammered worse than the … Continue reading Are You Ready For Some Football?

One of my favorite commentators is Art Cashin of UBS, who has been on the floor of the New York Stock Exchange for over fifty years . . . literally . . . 50 years! This morning he spoke about the “Thursday/Monday” syndrome, which sets the stage for a strong bull rally.  On Thursday, the … Continue reading A Historical Precedent?

Yesterday was ugly, with the Dow dropping almost 400 points.  Earlier this morning, the futures market indicated the Dow would open up over 100 points but has been drifting down since then.  It looks like it will open slightly down right now. Traders, especially high-frequency traders, are driving the market now.  (Investors try to pick good … Continue reading TGIF . . . Not

As a lifelong student of the investment markets, I usually take comfort in understanding both it’s cyclical behavior and its tendency to over-react to news.  When I don’t understand, I get worried. I’m worried!  The Dow lost over 100 points at closing yesterday, for no ascertainable reason.  It was certainly not the usual over-reaction to yesterday’s meaningless … Continue reading One-Two Punch?

I was raised as an Eisenhower Republican, i.e., distrustful of both big government AND big business, as well as deeply suspicious of foreign entanglements.  (Undoubtedly, the latter has fueled my lifelong interest in globalization.) On Monday, I gladly attended a fundraiser for George Allen, whom I have supported in the past.  However, it was not about … Continue reading Going To Extremes