Well, the past two days have been bad. Other than treasuries, there is seemingly no higher ground to run to. Well, I guess cash probably would have been a good option by the close on Tuesday. But, be that as it may, I thought I would offer my take on the technical picture.
Starting with the S&P 500 -- the key support is around 1120-1125. That level held today. But, if I am to stay consistent with the view that I expressed earlier this week, I don't expect that it will indefinitely. Nevertheless, I am not going to play it, because (again, to remain consistent) I fully expect Bernanke's hand to be forced and for a further response and intervention. And I don't want to be caught flat-footed when that happens. There are certain individual positions I own that look really tempting at these levels, so I may dabble with those. But, to be clear, these are ideas that I think about in terms of years, not days, weeks or months.
As for the gold chart, it also got beaten up pretty good, but it looks much healthier to me. For starters, it bounced right around the level I was expecting. (If you want to play along at home, pull up the gold chart, connect the lows on 8/8 and 8/25 with a line and keep going east -- see what I'm talking about?) The other part is that gold's decline is solely a US dollar story. Check it out in just about every other currency -- the buyers are there globally. For the moment, the fast money/hedge fund crowd is puking up everything, as the computer trading programs flash "SELL, ASSHOLE!". But, that too shall pass.
Anyway, that's how I see it for the moment. We'll see how it plays out.
