Thursday, September 11, 2008

Oil, Gold Lead Way Lower

Forget the stock market for a moment and take a look at commodities. Focusing on the major precious metals, gold and silver, and America's favorite, crude oil, we can almost see the demand curve turning negative by the minute.

Commodity prices worldwide are collapsing with the precious metals leading the charge lower. There are no support levels or pivot points in the recent decline of both gold and silver. From their highs, gold is down 26%, silver, 47%, oil, 32%

Today's closing figures in New York were yet another indication of the commodity rout. Oil finished at $100.87, down $1.71. Gold slipped to $745.50, off $17.00. Silver melted down to $10.56, lower by 34 cents per ounce. Declining value in physical assets such as gold and silver is not an encouraging sign for any investor seeking growth opportunity.

Stocks on the day made all or most of their gains all in the final half hour. Markets were markedly low in the first half hour of trading. The Dow was down 170 points by 9:45 am. The rest of the session was spent short-covering and no doubt pumping by the inner circle of government interlocutors and their agents provacateurs in the market.

Dow 11,433.71 +164.79; NASDAQ 2,258.22 +29.52; S&P 500 1,249.05 +17.01; NYSE Composite 8,011.25 +3.99

As evidence of the manipulative nature of the day's trading, there were more decliners than advancers, 3459-2840. The gap between new lows and highs expanded magnificently, to 731 new lows to a pittance of new highs, 57. One should not be fooled by today's gains. This is a very weak market under incredible stress. There were underhanded interests at work on the 7th anniversary of the World Trade Center catastrophe to ensure that stocks traded higher.

Volume was light, with about 600 million fewer shares traded today than yesterday.

NYSE Volume 1,375,594,000
NASDAQ Volume 2,298,872,000

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