UPDATE 10:42 AM -- WALL STREET ALERT: If you are a stock investor -- YOU DEFINITELY WANT TO PAY ATTENTION TODAY!!! Problems at Bear Stearns. Gold is now at $1006; Fed announces they are monitoring markets closely and are ready to add liquidity to keep market functioning...the DOW is DOW-N 200 points...treasuries surge as stocks fall...dollar hits record low against euro...gold at an all time high. This could be a sign "smart money" is pulling out of the market. President Bush to speak on the economy at 11:15 AM. If they don't bring out the paddles, soon...gonna lose the patient on Monday.
The Fed has announced that Bear Stearns will not be on the hook for their financial problems (some kind of arranged bail-out where the Fed reserve, using JP Morgan as a conduit, where the Fed buys up the debt.) These types of measures being used to help keep the market propped up ain't gonna stick in the long run. These up and down volatile fluctuations are a sign that the floor is about to cave in. That could happen starting Monday, if not later today. MEASURES TAKEN BY BUSH/FED TODAY MAY KEEP THE BOTTOM PROPPED UP FOR A LITTLE WHILE LONGER...BUT BE VERY, VERY CAUTIOUS.
When gold rises to $106 and people start moving to treasuries...those are "flight to safety" moves. And investors HATE safety moves. Be careful buying gold and silver today and Monday, though...because at these super high highs...automatic sells are triggered "profit taking" at a long of the big hedge funds and investment firms. These are pre-set computer triggered limits that sell no matter what. So at these levels, I would expect to see that. However, I've noticed recently that these sell offs are shorter lived as global economic fundamentals keep gold moving higher in the face of trader sell-offs.
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