Al; RE:"If this gold index keeps tanking..."
...VERY astute of you to notice this development, Al. If this (world - wide deflation) persists, it is possible that the FED could lower interest rates in December. "DeFlation" is probably the number one worry of the BOJ/FED/BundesBank leadership right now.
Ike; RE:"test of DJIA 7200"
...Certainly looks likely, with 6900~7000 the last line of defense, n'est-ce pas ?
At present, what I'm looking at is the historical P/E's for some clue as to what "values" the market will eventually stabilize at, in addition to the horizontal supports on the price charts.
I think that we can presume that AG and other leaders will re-assert that the "economy" is fine (because, it is). Of immediate concern is the box the Japanese have gotten themselves into, as you so clearly illuminated in a recent posting - note the DEM/Yen is soaring - along with the HangSen's relentless collapse, which is heavily weighted with real estate (rather than stocks)... DeFlation, as Al has indicated is the worst scenario for the Bank Of Japan to cope with.
As I mentioned in an earlier posting, the focus for us now is to identify support and resistance levels, in stocks, and in the indices; for it makes no difference whether prices go up or down - only that they move from one level to another, in such a way that we can realize capital gains from their movement. a bient“t
-Steve |
