Markets have stabilized for the time being and have started to rally…Gold, as of 8:30 am Pacific, is down $9 an ounce at $1,615…Silver has lost 53 cents to $29.70…Copper is up a penny to $3.06…Crude Oil has gained $3 to $78.65 while the U.S. Dollar Index is up over one-tenth of a point at 79.23…physical demand has emerged on recent weakness in Gold and Silver according to Barclays Capital…Gold lost ground yesterday but “physical demand has been reinvigorated at these price levels and should provide support for prices, before investment demand and safe-haven interest returns to the driving seat,” Barclays stated…
The public sector is hurting in the U.S. but the private sector added a better-than-expected 91,000 jobs in September even as the amount of expected layoffs hit their highest level in more than two years, according to separate reports this morning…the monthly survey from ADP and Macroeconomic Advisors showed that the service sector added 90,000 positions, goods-producing rose just 1,000 and manufacturing fell by 5,000…economists had expected the ADP report to show 75,000 jobs created…this comes ahead of Friday’s important non-farms payroll report from the Labor Department for September…compounding uncertainty around the jobs market was a report earlier in the morning from a private consulting business (Challenger, Gray and Christmas, Inc.) that showed the number of planned layoffs at U.S. firms in September jumped to its highest in more than two years due to heavy cutbacks by the military and Bank of America…
Highlighting weakness in the global economy, business activity in Germany’s services sector contracted for the first time in more than two years in September…meanwhile, European finance ministers have agreed to safeguard their banks as doubts grew about whether a planned second bailout package for debt-laden Greece would go ahead…the situation in the euro zone is not going to be solved anytime soon and chances are it’ll get worse before it gets better, which means markets are going to be weighed down with this problem for an extended period…Greece is sure to default – the only question is whether it’ll be an orderly default or a disorderly one, and the politics of bringing some sort of necessary fiscal union to the euro zone appear to be very challenging at best…
In Greece today, flights were grounded, schools were shut and government offices were closed in the first nationwide walkout in months…labor leaders call it the start of a campaign to derail emergency austerity steps launched last month by a government that has already imposed two years of tax hikes and wage cuts…thousands of state workers, pensioners and students gathered peacefully, beating drums and waving banners reading “Erase the debt!” and “The rich must pay“…for years the citizens of Greece have demanded programs their government (the taxpayers) can’t afford…they’ve borrowed money and racked up massive debts…and then they demand “the rich” must pay?…something is dreadfully wrong with this world…Greece should have to suffer under austerity for the next decade if necessary…the “entitlement culture” that grips that society (and others) is stunning to say the least…
The CDNX led the markets higher out of the gate this morning, so we’re definitely in the midst of a rally after some crushing days to the downside…as of 8:30 am Pacific, the Index is up 51 points at 1384…one should be careful trying to play this rally, however, and it’s critical to understand that we’re now in a bear market – not a bull market – and in bear markets, rallies should be sold into…below is a long-term CDNX chart from John that shows what a true reversal pattern looks like…
Below is another chart that shows various CDNX support levels…it seems highly unlikely that 1300 will hold given the fact this market is now under pressure from a declining 300-day moving average (SMA) with a 500-day SMA likely to reverse to the downside later this quarter…
hugh – The word normal is in normalcy bias. It is normal for the human brain to think this way. It was not meant as an insult. I phrased my choice of words poorly to you. You have my apology. As for the tsx.v you could say there is a weak band of support at 1050, but it is very weak. Greece is meeting with officials today to try and come up with what I call a band-aid fix to keep them from defualting, thus the green market. They will probably come up with some sort of fix which could create a rally in the markets short term. Hugh – hope all your trades are green. lol
Comment by dave — October 5, 2011 @ 7:54 am
Apology accepted! Thanks for the come back. It just seems that when markets go down out of the closet come the ‘I told you so brigade’. I think most people invested in gold and gold mining stocks know the true mess these markets are in, that’s why we are in PMs no? Some people like to trade penny stocks others do deeper research and try to get embedded in long term winner. I believe that is the aim of BMR. Are all my trades green? – Resounding no. Some are are green, some are covered in deep red paint – Those would be my penny venture trades, show me someone who has a portfolio of green venture stocks right now and Ill send you a free ounce of physical! Its a game of whack a mole with the world economy right now, fix one problem and another appears. The way I see it is that governments everywhere are broke and none of them want to take the short term pain of defaulting and risking contagion so they are eventually going to print print print. There could be some violent movements along the way up and down but PMs are going much higher.
Comment by Hugh — October 5, 2011 @ 10:01 am
BMR
When you say we are in a bear market now, what exactly are you referring to?, the Venture exchange? the dow? the nasdaq? there are alot of very smart people out there that are saying now is one of the best times to buy good quality stocks on the dow and nasdaq.So where or what is the Bull Market you are referring to? Because there is no way that the Bull Market in Gold and Silver are over imo. Thanks
Comment by GREG — October 5, 2011 @ 10:24 am
Hugh
good post and I agree for whatever that is worth. I think the producers are the place to have your money and the jrs that have the high grade gold in the ground are going to do just fine, because gold is going higher imo.
Comment by GREG — October 5, 2011 @ 10:25 am
Well, I am based in Europe and I can tell you people on the ground are dismayed at the bailouts but they don’t really understand the money printing element fully yet. They see the money coming from taxes and they are annoyed at that. The way I see it, there is a lot of talk of Germany leaving the euro and even rumors circulating that they have printed marks. I don’t see that happening, while I wouldn’t rule it out, their exports will be too difficult with a super strong mark and ultra weak euro. It would be better for everyone if they let Greece go. However if they let Greece go then they will need to accept the consequences of the contagion and not just from Greece. A Greece ejection would set the precedent for the next causality, Ireland or worse Spain or Italy. Right now I don’t see the political will to do embrace such a drastic move. There may be tough talk but its all talk. I think we will see an EU TARP. Dexia may be the first to topple – who knows, but they are getting the money printing presses going coupled with lashings of austerity for sure. Then when that fails then Germany can use all those Marks they are likely storing in a warehouse somewhere. Buy shares in Del la Rue!! LOL – GTLA
Comment by Hugh — October 5, 2011 @ 11:53 am
LOOKS LIKE A GREAT FINISH FOR THE CDNX UP 75 PTS…..6% MOVE UP! DOW, TORONTO ALL UP TODAY…1143 ON S&P….
Comment by STEVEN — October 5, 2011 @ 11:58 am
SORRY, 80 PTS ON CDNX TODAY!
Comment by STEVEN — October 5, 2011 @ 12:01 pm