Looking For A Place To Hide

Battling the headwinds of a stronger dollar on the day, gold found some enthusiasts, even if they were feeding on the bottom a bit. At closing, this afternoon, gold is up about $5.00.

The equities finally came in for the beating they were looking for during the last month. Global troubles centered around new legislation in Russia aimed at sanctioning-countries' assets while the glitches in Apple's new iPhone troubled the tech sector.

We feel those are temporary issues. The real problem is a combination of the slowdown in China and the glacially slow growth in Europe. We also have been saying for years that the U.S. economy can't recover fully until wages rise, and rise fairly dramatically. Who's going to BUY all this stuff otherwise?

Regardless of why, equities got slammed today and gold prospered somewhat.

We're not prepared to say gold is functioning as a safe haven, but certainly some jittery feet came running in, figuring the yellow metal priced at a bargain level, and well, you might as well shelter a bit from the storm passing over the stock indices.

Some people are viewing the stock sell off as a "value sale," especially of stocks that have done extremely well for the last six to twelve months. Why not take profits now, if things are becoming a little dicier?

The CBOE VIX (Volatility Index) jumped by 21%, a red flag that investors are worried.

Crude was down again today, hovering between 92 and 93. Some predictions put the future of oil at $80 per barrel. That might be stretching it, but if the dollar stays strong and extraction and refining in the U.S. keep up their breakneck pace, we could see something close to that number.

One thing that leads us to believe that this is a faux safe haven atmosphere for gold is that the yield on the U.S. 10-year bond slumped a bit today. It's at 2.5%, a very moderate position to be in.

The S&P 500 is to be watched closely because it is the broadest index and its constituent components are the bluest of blue chippers. Transportation was interesting today. It is a bell weather sector - it foretells what will actually be moving physically, through pipelines, on rails, in trucks. So, those interested in growth stocks don't like to see transportation static.

Another theory has it that this is part of the yearly Rosh Hashana selling. So what? I should lie down and faint because it's a holiday?

And, without bringing back too many bad memories of days gone by, there are those certain unnamed crashes that happened. One was in 1929. Call it autumn jitters. Call it the end of the breezy summer rally.

As always, wishing you good trading,