Market Summary

This last week saw gold shoot up by over 10% followed by oil which was up over 7%. All the other indices on the table below were down for the week. The US dollar index continued it climb back up to its recent highs and shows signs of strength as the global recession has led to the exchange of foreign currencies for the US dollar. The UK last week declared that it is now officially in a recession.

Where are the opportunities? Gold continues to shine. As a safe haven currency it is holding up as other foreign currencies decline and the global economy slows. It closed at 897.70 and above its long term 200 day moving average of 853.33 while only 3% of the stocks in the S&P 500 are above their 200 day moving average. No doubt there is a flight to safety as fear about the state of the economy spreads and as concern about the possibility of inflation remains. The CRB index, a measure of inflation based on the price of 19 commodities, appears to have made a bottom after a long decline. However, with a slowing economy it is hard to imagine that the price of commodities will be rising. Also, we will have to watch bond yields which travel inverse to their prices. There appears to have been a bubble in bonds which pushed the yields to very low rates. Now that the rates are rising ETFs that go up when bonds go down may also shine. We will just have to wait and see. Click on table to enlarge.