Stock Market Getting Hammered

Yesterday there was price declines in nearly every asset class. This is due to the dollar index which has been gaining strength powerfully in the last few days. The S&P collapsed yesterday and finished down nearly 3.2%. The white precious metal really tanked yesterday. The two etf's (Exchange traded funds) collapsed yesterday with the leveraged etf down nearly 20% in one day. Wow..

Is there more room on the downside for Gold and Silver?, there may be. Here is how I see things unfolding. Gold at the moment is trading around the $1730 range. If Gold penetrates through $1700, I think there is a big possibility that we could be entering a D-wave profit taking event.

For anybody who doesn't know what a D-wave is, it is a merely a profit taking event and usually lasts about 6 to 8 weeks. Therefore, I believe that we could see Gold drop to the $1400 level if we get this D-Wave decline. Every one is now watching the $1700 level on the Gold index. I think there will be a good fight between the bulls and the bears at that level. Lets see what happens, we will know in a week or so.

Whats putting pressure on the stock market and commodities at the moment is the strength of the dollar. Since the US dollar is the world's reserve currency, everything is priced in dollars. Therefore when the dollar gains strength against other currencies, it puts pressure on stocks and commodities. Also, we are in a trend at the moment of a rising dollar. This will continue for a while so I think 100 on the s&p could get breached very soon and also $1700 on Gold. Nevertheless, as I write, The dollar is weaker today but in saying that silver is tanking like it did yesterday so it doesn't look good at the moment.

This is what happens to a market when there has been a min crash. Silver crashed back in April from $49 an ounce to $35 an ounce in less than 2 weeks. Therefore silver investors have alot of fear in them and you can bet whenever they feel that a decline in coming again, they are out, period. They do not want to get caught like they did back in April.

As the title mentions we have a secular bear market in stocks. This means that the stock market is in a downtrend in the long term. There is support at the moment on the s&p at 1100 but I don't see this holding. Ultimately I see far lower prices in Stocks in the long term. Then like in March 2009, The chairman of the federal reserve will start to turn on the printing presses once more to try and kick start the economy once more but I believe all will be in vain.

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