Opening VUE

Good Morning Everyone...
I've spent several days in a row pruning the Raspberries and helping with Onion planting.  It is a wonderful break from the norm, but I'm very sore.  I'm also reminded that I can no longer work physically at the same level I did even 5 years ago. 

Opening VUE

1. The stock market and the Gold market were in a reaction (to the upside) mode yesterday.  Observing the markets over the years, this is a normal occurance after a large "volume" day with a large price move (not choppy).  In general, value investors are looking to buy after Monday's drop, and the pressures (such as margin calls) have subsided a bit.  Every sector settled in the black yesterday.
2. I would caution, however, that whatever happens today (up or down) does not indicate the stock market or the gold market has stabilized yet.  Follow my advice on looking at the Gold and Stockmarket's P&F chart for Buy and Sell position. When they turn positive again, look for a strong upmove.  On a seasonal basis, Gold will enter a buying signal in May.  
3. The S&P rebound buying interest this morning is lacking.  The DOW and the S&P will open down.  Watch the opening to observe if the market's will close the gap created by overnight trading in Asia and Europe. If it does not do that within 15 minutes of opening, the probability is high the market will drop with Monday's low being support.
4. Sentiment over night has shifted to the negative in Europe.  Most of what is causing the angst is rumor as follows:
1. The sovereign debt of France could soon be downgraded.  It is even rumored Germany could be downgraded.
2. An Financial Times article highlights a view from a Chinese official that local government debt (in China) has spiraled out of control.  The article suggests the official  believes that things could end up worse than the fallout from the USA subprime mortgage fiasco.  
3. Renewed selling in Copper is being perceived as a potential signal that the global economy is not expanding, but contracting. Copper declined 3.3% in the futures market.
4. Earning reports are indicated there is relatively weak demand for goods (commodities and manufacturing) across the world.
5. Bank of America is one of the few in the financial sector who have not met expectations for 1st quarter earnings.  
6. Basically, though, most top-line growth is weak for most companies (Goldman Sachs and other investment banks are the exceptions).
7. When we look under the covers at the reports, the bottom line is being improved - not by sales - by cost cuts, share buybacks, lower tax rates and so-on.  That does not bode well for growth.

Boston

What was the point of this horrific attack on innocents?  Did you feel as I did when I first heard this, that hopefully few people were hurt?  Well, I know now that whoever did this was more interested in maiming people than killing.  That is considerably different than the bombing attacks in Pakistan yesterday.  

Oh the sorrow we feel for the people who were hurt and lives destroyed.  

I vowed after yesterday to not look at the photos of the carnage. I felt that if it was not my job to look at those pictures, that I would not look. The photos were not helping me, and I don't believe they are helping the people (hurt and not hurt) in Boston.

I will keep despair in check, but it does not change my feeling that it is getting more and more dangerous to leave my house. 

Did you hug your teenager today?  I don't have any teenagers, but I would hug everyone I could.  I would kiss my wife and hug my family.  None the less, I want love to remind me to love: not death and descuction to remind me to love.   

These unspeakable horrors do not happen just here in the USA.  In the last few years, Spain, UK, Ireland and so-on in Europe have had similar events with at least as much pain and suffering as the people in Boston.  Pakistan, Afghanistan, India and even China have experienced the agony of such events.

Help those who need help today.
GOLD

Gold is going down, and price  is what it is. Remember, no matter what the reasons, gold and all precious metals are down, and down in a devastating way.

The market prices reflect what people believe, and the behavior right now is to liquidate gold.  Do not try to pick a bottom.  Don't look for cheap stocks in gold miners.  Just conserve your cash.

What about people who are holding gold bullion in the form of bars or coins.  If this is your safety net, consider this drop in price in the physical commodities and opportunity to add.  Don't liquidate, because you have the physical asset.  If (and I do not know anything you do not know) this is the start of a major deflationary cycle, then the physical asset will always be there.

What about those people who were holding gold for long term appreciation,.  I hope you were following my blog or newsletters.  You would not be invested in gold stocks or other gold (agains except for gold you hold for emergencies).  If you own gold, liquidate and go to cash.  A deflationary period (again if that happens) will result in cash being worth more than now (you will be able to purchase more for the same $$$ (or Euro, or Canadian).  

What about those who believe in the end of the USA?  I'm not one of those, and so I don't know.  What would seem reasonable is to liquidate any paper assets (gold stocks, gold etfs) and buy gold coins. 

During this drop in precious metals, the coin vendors and the mints cannot keep up with the demand.  Does that mean there are more "end-of-the-world" people than one might surmise?