IGNORE REALITIES...BEN BERTANKIE KNOWS BEST: Not a fun day with the Dow Jones being down a-nother 277 points -- after some pretty big givebacks already this year. And it ain't over yet. (The slide, that is/see "tomorrow morning".)
But despite how the rest of the world is reacting to the global economy...remember...market realities don't mean squat. Ben Bernakie has been correct all along, and please ignore the global slide into recession and the biggest market decline since the great depression of the '30's. Ben has been checking his Princeton charts and is figuring out what to do.
WHY GOLD WENT DOWN TODAY? No, not because it was at record levels. "Commodities King" Dennis Gartman had a good explanation as to what may have happened today. He says, that if you noticed, gold was up at the start of the day. Then, as stocks took a HUGE dive (one too many this year), people had to meet margin calls, and the only thing in the portfolio with a profit to take is gold.
AND -- you may have had some additional "forced/artificial deflation" of gold today. One market insider tells Strategy Update that you have some people in the mid-east that were selling off gold like crazy, trying to make it drop -- before the market tanks to 0.00 and there is nothing left.
BUSH TRIES TO BRING DOWN OIL PRICE: And you saw crude oil drop today, too. But don't look for George Bush's plea to have oil sheiks up production so as to help deflate the price of oil, too. Unfortunately...FIRST OF ALL...it's not like these people can just pull all this oil out of their ass at a moments notice. It's not gonna be that easy...who says they have so much extra oil hanging around? Experts say they do not.
Secondly, the oil producers say, "Well gee, we can up production, but who says the U.S. will be there to fill the demand? The world is scared that the U.S. will be cutting back on consumption even if they raise production levels. AND -- they are not expecting a pull back on demand, anyway. China and other emerging world markets will keep demand pumping along.
So long term, gold and oil should be going back up...a lot! WAIT UNTIL EVERYONE STARTS DEFAULTING ON THEIR CREDIT PAYMENTS AND THE DERIVATIVE MARKET SENDS THE MARKET SINKING LIKE A LEAD ANVIL IN QUICKSAND.
The market is going to tank again at the opening bell on Wednesday...and I think come February, March...people will wish they sold all stocks and took whatever losses they incurred.
But people are overly hopeful and optimistic. We will see the Dow hit 11,500 before 13,500.
THE PROBLEM WITH MORNING STAR & STOCK RATERS: I recently told someone who I didn't want to see lose money that their stock was toast and that even though it is way down -- sell now and take the losses. And added that they never should have let the stock drop 50% in the first place. They were quick to respond with, "What about the five star rating with Morning Star?" Well, that's all well and good, except these ratings don't take into account that the Dow Jones is going to drop from 13,500 to 12,500 in only thirteen trading days due to factors that had nothing to do with the fantastic company. Oh well.
Who the hell am I? The guy who blogged in May '07 about the subprime crisis that would trigger a year long recession starting in November. Then, told everyone to sell Apple at $200, even though no one did, because they felt the stock was called, "infinity", not "apple".
AND, when I sent out notices to family and friends in October, November and December urging them to "sell all stocks and mutual funds by Dec 31, 2007 -- in advance of January '08...
WELL...no one wanted to do that, because people don't like to only make 4% interest. They would rather lose 50% of their portfolio value. But that's o.k., because it's always about to skyrocket back up. (At least that's what they told me about Starbucks at $28, $26, $23, $20...they're still holding on -- even though they bought it at $36 and today it's at 18.84.
And to everyone I told sell Apple when it worked it's way back up to $180. Well that wasn't good enough, cause it was at $200 a few weeks ago. (Exactly. This ain't a few weeks ago anymore. HOW IS APPLE GOING TO HIT $200 ANYTIME SOON, WHEN THE MARKET IS COMPLETELY DIFFERENT THAN IT WAS WHEN IT HIT $200. (That goes for all you "record high" stock holders who didn't take profits.)
Yes, I'm bitter. So I started this blog so I can put it all down for the record and my friends and family can just look here to see what to do, instead of me having to beg and plea with them.
strategyupdate.com
Disclousre: AUY, KGC
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