We have a stockmarket rally today and a considerable drop in the price of commodities. I suggest this is the reason.
The Strange Case of Dr. Bernanke and Mr. Market Is it time to get excited about the stock market yet?
This morning the U.S. S&P 500 gained 3.4%. The CNBC presenters were beside themselves with excitement.
What excited them even more was the 3% drop in the gold price... to USD$1,835. That's a fall of nearly $100 since earlier this week. And maybe it'll fall further...
Or maybe it won't.
But, let's calm down and reflect before you jump in and buy so-called bargain stocks. Because before you buy you've got to understand why the market is behaving this way.
It's all based on what one guy with a beard may or may not say at a speech in Jackson Hole, Wyoming later this week...
In fact, it's not even about what he'll say... it's just as much about how the market interprets what he says.
And unless he explicitly says, "There will/won't be more money printing", market players will have to draw their own conclusions.
In other words, you should expect more of what you've recently seen - lots of ups and downs.
The way we see it, the market isn't normal. It's become a Dr. Jekyll and Mr. Hyde market. Or should that be a Dr. Bernanke and Mr. Market market?
http://www.moneymorning.com.au/20110824/the-strange-case-of-dr-bernanke-and-mr-m...
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