Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Stock Markets Brace for More Volatility

Stock-Markets / Stock Markets 2011 Aug 16, 2011 - 04:11 AM GMT

By: George_Maniere


Last week was one of the most volatile weeks in the history of the stock market. In my opinion the cause of these wild swings and the subsequent spike in the VIX has been a loss in confidence in investors. The wild swings we witnessed in the market is proof that after three years from a near Armageddon in the financial markets we are far from having an economy that is recovering. There is not a doubt in my mind that we will be in for more volatility in the market because our leaders have been unable to deal with the core issues of a staggering debt and a stagnating economy.

This week, French President Nicolas Sarkozy and German Chancellor Angela Merkel are scheduled to meet to discuss Europe’s problems. While the 300 pound gorilla in the room is the eventual breakup of the Euro Zone I am sure that will not be the topic of their discussion.  At this most crucial time, they are not going to discuss anything that would actually lead to a solution of their debt crisis. I’m sure they will confine their remarks to issues like improving economic stability. While there is no doubt that European stability needs all the attention it can muster, I believe this meeting will be less about ending the crisis that is staring them in the face and more about preventing future problems.

While not everyone shares my views I have positioned myself for more market trouble. No one can argue that corporate profits have been exceptionally strong as of late and that makes stocks look very inexpensive. I contend, however that it will be difficult for companies to repeat their strong profit gains as there is only so much fat that can be trimmed from the bone. Sooner or later these companies will have to produce real growth. There are only so many good earnings that can be reported before real wealth creation takes place.

From the market standpoint, this current situation is very reminiscent of the market troubles of the 1930’s and the 1970’s but this time on steroids. In the two eras I have mentioned it took well over a decade for the world economies to recover. In today’s world we now have to factor in China, India, Russia and Brazil. A return to a recession or worse a double dip in our economy would cause a global ripple effect that would have disastrous consequences throughout the world.

Yesterday we saw a run up of 214 points on the Dow to close at 11482.90, 26 points on the S&P to close at 1204.49 and 47 points on the NASDAQ to close at 2555.20.  I am not buying into this for one minute. I believe that there will be strong volatility still ahead and I have positioned myself for a retest of last week’s lows. If we can hold these lows we may have put in a level of support. Very often just like a stock a sector like the S&P will retest support levels more than once. Every time they retest that support level it gets a little weaker. If that support level can show the strength to hold this level of support we know we have found a bottom. That’s when you start buying in.

Today our old friend gold was selling off, as it had for the last couple of days when it did an about face and closed up in a show of strength. It seems no matter how oversold gold is, it continues to rise. I attribute this to a loss of confidence, our staggering national and European debt and a continued stagnating economy. The spot price of gold closed up $20.00 at $1770.00 and the gold ETF (GLD) closed up $2.00 at 171.80 and continued trading higher in the after markets at $172.19. The silver ETF (SLV) also put in a show of strength and closed up 1 ½ % at $38.67.

So in conclusion I will continue to maintain my long positions in GLD, SGOL, PHYS, SLV, PSLV and AGQ. Until is see that confidence has been restored to the markets I see Gold and Silver as the only safe ports in these most perilous economic waters.

I found this link on my copy of the Wall Street Journal (online). Dr Nouriel Roubini talks about the current state of the economy. Like him or not, he certainly brings a very interesting point of view.

By George Maniere

In 2004, after retiring from a very successful building career, I became determined to learn all I could about the stock market. In 2009, I knew the market was seriously oversold and committed a serious amount of capital to the market. Needless to say things went quite nicely but I always remebered 2 important things. Hubris equals failure and the market can remain illogical longer than you can remain solvent. Please post all comments and questions. Please feel free to email me at I will respond.

© 2011 Copyright George Maniere - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules