Tuesday, September 27, 2011

Gold bounces back

     Gold  was higher today a huge selloff cause prices to drop 350 dollars from the peak.  At one point in overnight Sunday, gold was at 1530 dollars but was near 1650 in recent trading up 4% from yesterday's closing price.  Silver also recovered up 9% after an even sharper 30% decline over the past week or so.

     Markets were higher once again this morning on hopes that European policymakers were finally getting a plan in place to fix the European debt crisis.

     "This comes after a European official said that a detailed plan to leverage money in the EFSF was in the works and that the it would use a portion of the money from the fund to shore up European bank capital, while another portion would be used as seed money for a European Investment Bank," said a CNBC article.  

     The DJIA opened up 150 points and quickly rose to 250 points higher in early trading.  Bank and energy stocks were leading the way with BAC up 3% and XLE up 4%.

     European shares rocketed higher with the FTSE up 3% and the DAX up 4.5%.  Asian shares rebounded as well with Hang Seng and Nikkei both registering large gains.  Across South America, the Brazilian Bovespa was up 900 pts.

Market Recap
     Wow, that was a pretty bad finish if you are a bull today.  We were up as much as 300 points on the DJIA but gave over half of it back in the last hour of trading finishing up about 150.  I'm not sure what caused the 200 point selloff at the end of the day but it might be because of fighting between countries about who's going to eat the cost of the bailout.  Governments want bondholders to eat a bigger portion of the cost. 

     From the Financial Times...

     A split has opened in the eurozone over the terms of Greece’s second €109bn bail-out with as many as seven of the bloc’s 17 members arguing for private creditors to swallow a bigger writedown on their Greek bond holdings, according to senior European officials.

     The divisions have emerged amid mounting concerns that Athens’ funding needs are much bigger than estimated just two months ago. They threaten to unpick a painfully negotiated deal reached with private sector bond holders in July.

      While hardliners in Germany and the Netherlands are leading the calls for more losses to be imposed on the private sector, France and the European Central Bank are fiercely resisting any such move. They fear re-opening the bond deal could spark renewed selling of shares in European banks, which have significant holdings of Greek and other peripheral eurozone debt."

     Needless to say, this is a bad sign for tomorrow.  I purchased some AAPL stock amid the euphoria early on and am quickly in the hole 1.5%.  AAPL had been outperforming the market recently but has lagged the last 2 days on the news that they are ordering parts for less ipads than expected.  This has led people to believe their sales are not as good as forecast which has put pressure on the stock.   It looks like this trade is not going to work out for me but I have a stop loss on the stock so it won't hurt me too much unless we get a huge gap down tomorrow which is possible. 

     This market is completely news driven right now which makes it hard to trade, for me anyways.  If I get stopped out of this AAPL trade, I will probably sit on my hands for awhile until a trend emerges.  I will keep adding to core holdings on big dips as well.


     If you are into trading, please check out my friend's blog.  It's called the Chartographer's Map Room.  This guy really knows his stuff.  Thanks.


Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!


  1. That's nice, it was really overrated

  2. Whew, everything is sort of recovering.

  3. Its all psychology. Good to see things slowly normalizing.

  4. Well, cool. Guess it would've been smart to get into gold a few days ago then.

  5. Well, I'm out of gold! Time to go diggin'!

  6. Hope it continues. Just because it's good today doesn't mean that it's going to be fine tomorrow if that makes sense.

  7. You wanted to read about CL no strings attached section? Your wish has been granted hahaha

  8. a very nice blog indeed, will be following out of interest.

  9. If only real gold is as easy to collect as game gold then I'd be rich.