GOLD FALLS TO EARTH, STOCKS RALLY AGAIN: Here's What You Need To Know

TBI ^ | 8-24-2011 | Gus Lubin

[blam]

GOLD FALLS TO EARTH, STOCKS RALLY AGAIN: Here's What You Need To Know

Gus Lubin
Aug. 24, 2011, 4:00 PM

Image: en.wikipedia.org

Three up days in a row, and two days until Bernanke's big speech.

But first, the scoreboard:

Dow: +131
NASDAQ: +21
S&P 500: +15

And now the top stories:

* Japan suffered a credit downgrade from Moody's and the country announced a $100 billion plan to curb the strengthening yen. Hilariously the yen withstood both events (though it did weaken against the surging dollar later in the day). The Nikkei ended down 1% with similar losses around Asia.

* European markets traded up over 1% in another waiting day for the debt crisis, which saw Finland consider butting heads with Merkel and France introduce new austerity measures.

* The U.S. received mixed data, with a beat on durable good and a miss on crude inventories, but market laggard Bank of America roared back to a seven-handle. The bank received more relief late after the antagonistic New York AG was kicked off a foreclosure panel. The rally picked up in the afternoon, and everyone is still counting on a gift from Bernanke on Friday.

* Gold fell back to earth from a record $1913 an ounce on Monday to $1756. Read a fascinating guide to what moves gold >

* There was also a bigger earthquake than yesterday, scary talk from Dick Cheney, and a new twist in Will Smith's breakup.

[blam]

[sickoflibs]

Sell stocks buy gold???

[Errant]

This is only the beginning of the coming volatility in the markets and in the world.

[blam]

Dick Cheney: "There Are Gonna Be Heads Exploding All Over Washington" After Memoir Is Published

[mlocher]

That light at the end of the tunnel is really an oncoming train.

[Errant]

Sell stocks buy gold???

In normal times, it would be better to wait until gold starts climbing back up the chart. IMO, we're going to start seeing violent swings in every market so that rule may not apply now.

I'm long gold/silver.

[blam]

[qam1]

Let’s see

Gold was ~$1500 on July 1st, it’s now ~$1700 a 13% gain in about 2 months

The Dow was ~12600 on July 1st, it’s now ~11000 a 13% loss in about 2 months

And yet they are reporting that it’s Gold which is losing while Stocks are rallying

Yeah sure, Oooooooooooooooooooooookkkkk

[blam]

GOLD – AVOIDING A DEATH WOBBLE?

It’s no secret by now that gold prices have been on a near parabolic rise for the last few weeks. This can be disconcerting for obvious reasons. When an asset price rises upward like a rocket ship, you inevitably experience a situation where the asset becomes distorted from its real value. In other words, a bubble is generated and an ensuing disequilibrium develops that leads to an unstable environment which eventually collapses on itself. We’ve seen it time and time again in markets. I personally think this is inevitable in the gold market, but I don’t think we’re quite there yet. And I think the current correction may be a positive sign that the market has just avoided a near bubble event.

[UB355]

Here is my advice opposite of before . Sell,buy,sell,buy,sell,buy.

[blam]

And There's Your Perfectly Leaked Explanation: CME Hikes Gold Margins, Again, This Time By 27%

[Errant]

Nice support for silver around $40. It may take the lead again while gold takes a break. Was looking to trade PM for a value property. Still looking...

If I had bought in at the high or for insurance, I'd just sit tight. If trading, I would have already sold (maybe even shorted) and looking for the time to get back in.

[Errant]

This chart puts it in perspective.

Fear Sets In, Panic Begins, Ruin Perceived, Prepare for Gold $2100

[editor-surveyor]

Sell stocks while you can,

Buy gold if you can!