Market Wrap-Up 2.11.03

FinancialSemseOnline ^ | 2.11.03 | Jim Puplava

[palmer]

Dude, you can start breathing again now! Good summary.

[dtel]

Who originally posted that summary, you or arete or someone else?

[arete]

I originally posted the link. bert then brought the text over.

Richard W.

[headsonpikes]

Bump.

Jeez, that's a lot of hard work and clear thinking.

Kudos.

[steveegg]

Despite a down day, volume was much heavier on the upswings. Nonetheless, the day high completed what looks like a consolidation pattern that from the break out looks like about a 800 target area on the S&P.

If we end there then we would be in what looks like an inverse head-n-shoulders type situation, if it holds. Volume is lower than the last two bottoms making it seem a likely bottom. If it does break thru, look out below.

Nice hedge <VBG>. Personally, I think the S&P will hold around 800 for quite a while, especially if the current earnings forecasts hold (if anyone believed that 20%/quarter growth was possible, even in good times, I've got a bridge for sale).

Of course, I can't discount the likelyhood that there will be at least 2 more downward-revisions of earnings estimates, which would put a nice dent in this "rosy" scenario. Just a friendly note to those that think that this means S&P index funds are safe again; 800 represents another 3.6% drop.

[arete]

Without credit, there is likely to be selling or liquidation to follow this run up, so if you are heavily invested in the yellow metal, be sure you also have plenty of cash reserves.

I think that is exactly what is already happening in the gold market. POG just fell off a cliff again which means to me that someone HAS to raise cash -- probably to support a position in the paper stock market.

Richard W.

[Free Vulcan]

Hahaha, you almost have to hedge a little right now. Iraq is the near term wild card. If we go to war and it goes badly, that 780-800 area on the S&P won't hold for squat, it will be a completely different psychology and many new sellers will enter the market. If however we win quick or don't go at all, then that will be a strong bottom, because the economy itself looks like it is picking up, and earnings held up pretty well this Q4.