Fed Hangover Batters Gold, Silver; Stocks Flat, A-D Negative

After yesterday's glorious proclamation by the all-wise and omnipotent Wizard of the Fed, Ben Bernanke, the euphoria that was yesterday's nearly-300 point rally on the Dow fizzled into nothingness with a downside bias on the advance-decline line, with a 3:2 ratio favoring losing issues.

Gold and silver were beaten mercilessly for not cow-towing to the company line that everything is getting "better," the US economy is in the midst of a brisk recovery and the stimulus just reduced by the Federal Reserve is really there just for window dressing.

The "reality" for money managers and investors is that the precious metals are just not competitively priced in comparison to the absolute bargains in stocks, which, by the way, are at all-time highs, spurred there by massive stock buybacks, easy credit and compulsive labor reductions.

Remember that the actual reduction in the amount of bond purchases by the Fed hasn't even begun; that will happen in January, should economic conditions remain somewhat the same, but there were some cracks in the Fed's armor-plated monetary policy directives even as the market opened on Thursday with a massive rally hangover that lasted the full duration of the session.

Initial unemployment claims came in at an unexpectedly-high 379,000, the highest number since March, and mind you, this is in the middle of the holiday season, where part-time retail jobs and temporary work should be plentiful. It's an ominous development.

Additionally, existing home sales fell for the third straight month, down 4.3 percent last month to an annual rate of 4.90 million units.

Anybody with even a cursory interest in real estate understood that the combination of higher prices (median home prices were higher by 9.4 percent over the same period last year) and higher interest rates create an affordability issue, pricing out marginal buyers and slowing the momentum in housing.

Tighter credit standards also had an effect on the lower volume of real estate sales, as did the number of cash buyers decreasing slightly.

Interest rates were effected negatively, with the 10-year note yield rising to 2.93%.

With news like this, how can the Fed not taper? It's skittles and unicorns as far as the eye can see, which, coincidentally is about to that bridge over yonder, which I just happen to own and would like to sell you for the low, low price of...

DOW 16,179.08, +11.11 (+0.07%)
NASDAQ 4,058.13, -11.93, (-0.29%)
S&P 1,809.60, -1.05 (-0.06%)
10-Yr Note 98.48, +0.23 (+0.23%) Yield: 2.93%
NASDAQ Volume 1.66 Bil
NYSE Volume 3.47 Bil
Combined NYSE & NASDAQ Advance - Decline: 2250-3438
Combined NYSE & NASDAQ New highs - New lows: 290-110
WTI crude oil: 98.77, +0.97
Gold: 1,193.60, -41.40
Silver: 19.19, -0.873
Corn: 430.50, +5.50