FEBRUARY 28, 2008: Fed Chairman Ben Bernanke warned of ‘bank failures’ as he testified before a senate banking committee this morning. This sent stocks down as you can imagine. The Nasdaq fell 1% on lighter volume. The Dow and S&P 500 also fell and continued to be turned away from their 50-day moving averages for the second day in a row.
Oil hit $102.50, an all time high. Gold also made history by hitting $971 an ounce. The Swill Franc and Euro also soared to new highs. The Dollar was not so fortunate and made an all time low at $73.65. Let’s hope for the dollars sake that the selling abates soon.
I took a look today at the industry groups that are leading the market right now and was amazed at what I found. Here are the top 10: Fertilizers, Gold/Silver, Oil/Gas Producers, Farm Machinery, Ores, Steel, Solar Energy, Agricultural Ops, Oil/Gas Drillers, and Mining Machinery. We have to ask ourselves if this is really a stock market rally or a commodities rally? We also have to ask if this is a signal that inflation is really taking off globally with soaring food, energy, gold, and raw materials prices.
The stock market indexes are testing their down trending 50-day moving averages from an ‘overbought’ position so I would not be surprised at a decent pullback in the near future. Gold, silver, grains, and oil are all moving higher in very definite up trends. We may be witnessing a ‘disconnect’ between commodities and stocks.
Counter-trend rallies during corrections are by no means a signal to jump
back in the markets. Bear market rallies can be sharp to the upside and
come back down even faster. More at www.goldenticker.com
Tags: bank failures, banking collapse, dollar collapse, gold, inflation, oil, silver, soaring food prices
