With Gold Down Today, Traders Have Nowhere to Run to, Nowhere to Hide
The great song "Nowhere to Run" by Martha and the Vandellas was on my mind this morning as we tried to figure out what do with the show tonight with the market at 12-year lows.
Here's a a great lyric from the song: "It's not love that I'm running from; It's the heartaches that I know will come." That about sums up the attitude of short- and long-term equity investors alike. The guys with shorter horizons bailed after the S&P 500 broke the November intraday low of 741. The longer-term investors are looking back at the Dow lows of 1997 and trying to find a reason TO NOT think that stock investing always leads to heartache.
The scary part is that with gold down today, there really may be nowhere to hide for traders. We've tasked Jon Najarian, OptionMonster.com co-founder, to come up with some ways for investors to protect themselves. But going by this Bloomberg storythis morning, even buying puts against the major indices is starting to be a crowded strategy.
Right around those November lows, technical analyst Louise Yamada told FM that we were headed to 600 on the S&P 500 and 6,000 on the Dow. She cited the classic "double-top" in the benchmarks formed in 2000 and 2007 that show we are still trapped in a structural bear market that began in 2000. Yamada, who's long been one of the most-followed chart analysts on the Street, will update her prescient forecast on the show tonight. She's been bullish on gold so it will be interesting to hear if she still thinks we can hide out there, given the poor performance in the metal over the last week.
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