A new quarter traditionally starts off on the strong side as reinvested retirement funds pour into investment house coffers. But that was not the case yesterday. Instead stocks opened lower and the selling continued throughout the session.
The broad-based S&P 500 was off 2.85%, and the Dow Jones Industrial Average also took it on the chin, off 1.36%. But the Nasdaq suffered the worst, off 3.29%, as technology and financial stocks were hammered hard. And banks were singled out again with Bank of America (NYSE:BAC) falling 9.6% on new worries over the impact ofEurope’s failure to address their sovereign debt issues.
Despite our economic woes, the world continues to rush to the U.S. dollar as a safe haven. (For more bear market strategies, click here.)
And so with the dollar up it was no surprise thatU.S.stocks sold off again. Here we see the S&P 500 plunging through the bottom of the most recent consolidation and ending the day just 29 points from the midpoint of last summer’s trading range.
But it was surprising to see gold make a weekly high in the face of an advancing dollar. The December delivery for gold futures rose $35.40 to $1,657.70 an ounce, which if applied to other currencies, is an enormous move higher. The rise was attributed to the Greek government’s Sunday announcement that it would not meet its deficit targets for the year.
Conclusion: Although the S&P 500 broke to a new low, the U.S. markets are now very oversold and due for a bounce. Gold, however, turned in a spectacular performance and should be on the buy list of investors and speculators alike. The chart may not look like much when denominated in dollars, but yesterday’s break puts gold back onto our buy list.Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
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