Its a massacre

[barnaby33]

What is safe? How about cash, cash is good.

Josh

[PD]

I’ve read on other blogs that Gold was hammered because some big players needed to liquidate because of margin calls.

[tangouniform]

If it were a Dow systems glitch then I wouldn’t expect all the other indices (4Q,R2k, S&P, etc.) to all show the same pothole at the same time. But they do so I call BS on that. Besides, QQQ did 3B in volume today without a real problem and supposedly the Dow clearinghouse has more CPU cycles and more network bandwidth available.

There’s a divot in all their charts within a few moments of each other. THAT looks like a robot trader that barfed sell orders onto the floor. The major indices are not that tightly coupled.

We’ll see over the next week or so if this is the much-anticipated unwinding.

[Anonymous]

Not surprising that the broad market was down; it was clearly due for a correction (followed by a steady march downward). Very surprising that gold was down, given that it didn’t move in the Oct. ’87 crash nor in the 9/11 downturn.

The good news is that my kids are getting lessons in economics and speculation; at dinner, I shared with them how their smarty pants Dad was proven wrong today, despite his fancy data and graphs that showed that such would not happen.

Our portolio is down 5% this evening. But, I feel very comfortable that gold and gold mining stocks will resume their upward march shortly.

[Anonymous]

The VIX is a lousy predictor of market sentiment; I graphed it vs. the S&P 500, and it has a nice inverse relationship, but such is coincident and not leading.

Great help that the VIX goes up 64% today; should have gone up such yesterday.

[masayako]

Hi guys,

To be conservative (rather lose less than gain more), since late December 2006, I had trimmed down my holdings in stocks and gold ETFs from my portfolio into Bonds (FTABX, LSGLX) and Money Market fund. I didn’t, and frankly not smart enough, to predict a big drop like this; I just thought it is probably going up too fast in too short a time. In other words, the gain does not seem to be sustainable.

Luckily (trust me, it is pure luck), my current portfolio look like this:
47% Cash
10% Gold
43% Stocks

Still, as of today, my portfolio is down 1.9%.

Funny thing, I am currently in a business trip for the first time in New York, sitting in the lobby of Waldorf Astoria to get free internet access. 🙂

Maybe I brought the bear from San Diego to NYSE today! 😉

Masayako

[masayako]

jg,

Which gold mining stock are you looking into? Maybe we can share info here.

The only gold mining stock I have been keeping track of is Newmont. However, I no longer own it because, personally, I prefer GLD ETF a little more.

[PerryChase]

I have friends who work in China and I think that aside from the stock market, the Real Estate market there is in a bubble of its own. Luxury apartments are being built everywhere. One thing I can say about China is that everything is grand. They like to build things big over there.

[kewp]

Just discovered the beta of google finance…

This is neat!

http://finance.google.com/finance?cid=983582

Great use of ajax.

You can zoom right in and look at the dive. Given the slope it does indeed look technical in origin. But, you are correct, it will take a few weeks to see if this is the real deal or not.

[tugg49]

HOAR!

Housing, Oil, Automobiles and Retail. Show me the strength and I’ll buy back int this market. I can’t see the bulls behind this market anymore. Excess inventory, Record high gas prices, 100K jobs lost, and a bunch of whack jobs at Wal-Mart…at least the “piggites” remember what the trickle down effect does don’t we?

[Chris Scoreboard Johnston]

Chris Johnston

Yesterday was case in point in a timely fashion in relation to what I typed in here the other day. There is no intermarket relationship between gold and stocks. Do not buy gold as a hedge against stock drops, there is no relationship there. We have now seen live proof of that.

[4plexowner]

Cool map from Wall Street Journal – it shows the market declines yesterday in all of the world’s major markets – check it out

http://online.wsj.com/public/resources/documents/info-marketdrop0207.html

[Happy renter]

The 8.8% drop in China Market was a good early correction since it was up 130% last year. It can actually prevent the market to crash. The market was almost up 4% yesterday already. The China’s Gov’t did a good job to warn the speculators not messing around in the market. It’s like the flippers in the U.S. housing market. But the only different is that the U.S. kept the interest so long to HELP the flippers to inflate and flip the houses.

I never borrow money to invest and have very diversified portfolio with extra cash flow. The massacre is only for the speculators, not the long term investors. I am sure tons of speculators who bought margins were forced to sell and lost all the money.

New-home sales plummeted by 16.6 percent in January from the previous month. There should be a massacre or crash for housing market, not the stock market since the housing market is way overpriced without any correction.

[HereWeGo]

Figuring out the markets is just such a maddening game at times. Are funds taking profits in gold to buy bargains in the stock market? 3-4% bargains?

Chris,
Would you agree that, for the most part, the markets are driven by the actions of large funds rather than individual investors?

[Anonymous]

Chris, I beg to differ:

Oct. 16, 1987: S&P closed at 282.70, then closed at 224.84 on Oct. 19, 1987, a drop of 20%. Over those same two days, gold (London P.M. fix) closed up 3%.

Sep. 10, 2001: S&P closed at 1092.54, and market remained closed until Sep. 17, 2001, when S&P closed at 1038.77, down 5%. Over those same two days, Sep. 10 vs. Sep. 17, gold closed up 8%.

Yesterday, gold went down with the market. It must have been due to some odd exogenous variable (to cover margin calls on market drops?) that was not present in ’87 or ’01.

I feel comfortable that we have a much larger market correction coming. Sure, it’s safe to sit in money market funds between now and then. The risk is that you miss out on a rapid rise in gold due to some unforeseen shock. I’m staying 100% in the gold market via VGPMX, UNWPX, and GLD.

[Author]

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