Dramamine market got you down? You are not alone. David Rosenberg explains: "Yesterday's trade was rather telling. The Nasdaq dropped 2% and not only did volume rise but the breadth was awful with losers beating winners by a 5-to-2 margin (9-to-2 on the NYSE). The fact that the Nasdaq sliced below support of 2,600 and dipped below its 50-day moving average for the first time in six weeks is a bit ominous to say the least; while the S&P 500 undercut its lows of the past four weeks (even though it has managed to hold above the 50-day m.a. of 1,205). But between the slide in equities, commodities, oil and gold, coupled with the rally in Treasuries, yesterday had a certain eerie 2008 feel to it. And did you see the huge 70 point rally in the Dow just in the last couple of minutes? The volatility is incredible. Look at the charts below — they look the same, but one is the Dow's closing level each day this year and the other is the minute to minute ticker on any random session (we chose October 7th out of the hat). The new normal is seeing a year's worth of volatility bunched into 6 ½ hours!"
And concluding with Rosie's take on the yellow metal:
Just a word on gold, which has not been trading well at all in recent weeks. Strong demand will continue to bump against an inelastic supply curve, in our view, and keep the secular bull market intact. Focus on the forest past the trees. Global central banks, especially those in emerging market countries, are emerging as very buy buyers (along with Chinese billionaires) - coming off their largest purchase in more than four decades (adding 148.4 tons to their holdings in Q3 - see the story on page 13 of the FT).
Not to mention that with everyone expecting the ECB to print, should Germany actually relent (which it won't as long as it is being pressured to do so), there will be almost no places to hide from virtually infinite fiat dilution. With some golden exceptions of course.