August 28, 2011
Weekly Market Outlook
By Keith Schneider
The biggest market moving events this week was a toss-up between Bernanke’s speech from Jackson Hole and Buffet’s Bailout of Bank of America. I give the top honor’s to Bernanke as it seems to have the most lingering bullish effect on US equities so far or about 6 hours versus Buffets bailout which was good enough to last about 15 minutes before the market cratered a mere 175 points. So in the same vein as our past Fed Chairman Greenspan, he often says nothing discernable, (with great eloquence) which gets mistaken for brilliance. Bernanke spoke in a similar fashion and did not promise anything but did say that he has more “tools” in his tool chest to help get the economy moving. With rates functionally at zero and the World deleveraging we are not so sure what tools he is talking about. The top secret picture above reveals just what the “toolbox “looks like from the outside. Inside, we are speculating that it includes some ink and paper.
By the time the market closed on Friday, NASDQ rallied more than 2 % for the day and 6% + for the week. Gold rose over 3% on Friday, but down about 2% for the week. The volatility in Gold has now reached the highest intensity ever with a drop of $200 in just 3 days, and a rally of over $130 from the lows. It’s a day trader’s delight and a once in 30 year opportunity. Is the bull run over in Gold and a Stock Market rally in the cards? Is Buffets Bail out and Bernanke’s mystery “tool box” speech the bottom? To find out what our view currently is, watch our weekly video below.
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