The futures are up in the morning and possibly we will see a gap-up opening. But I do not think we should jump back in the markets yet. Most likely this rally will be short lived. It is more of a dead cat bounce after a big sell off week. The EU has not yet come up with any definitive solutions and we can expect the volatility to continue well in October. I think SPX will have trouble going past 1150.
Corrections in Gold and Silver continue. Silver can reach around $22 level or below. I am not sure about Gold and hence staying away from it for now. The funny thing is, historically, gold has performed better in a deflationary environment. If anyone cares to remember that gold was in a 20 year bear market when the stock markets were going up and inflation was much higher than it is today. So if we see a yearend rally from end of October, we might see a sharp selloff of gold.
For now, it is better to be in cash and wait for a good low in October before any buying opportunity comes up.
P.S; The markets opened gap up but now some are in red and some are struggling to keep the opening gain. In the mean time, I hear Cramer in CNBC that he is buying gold. Hmmmm. If the snake oil salesman is now pushing gold, may be it is time to seriously short gold.
This one is from Kitco at 10.45 AM on 26th Sept. 2011;
P.S; The markets opened gap up but now some are in red and some are struggling to keep the opening gain. In the mean time, I hear Cramer in CNBC that he is buying gold. Hmmmm. If the snake oil salesman is now pushing gold, may be it is time to seriously short gold.
This one is from Kitco at 10.45 AM on 26th Sept. 2011;
Did gold really go down 62.90?
Yes. The stronger US Dollar was responsible for 3.50 of that drop.
Gold price Change due to Strengthening of USD
-3.50
Gold price Change due to Predominant Sellers
-59.40
Gold Price: Total Change
-62.90
