Part of the downdraft is a rumor that the Fed "stress test" yielded showing "Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent." (Based upon the “alternative more adverse” scenario which had a 3.3 percent contraction of the U.S. Economy in 2009, accompanied by 8.9 percent unemployment, followed by 0.5 percent growth of the U.S. Economy but a 10.3 percent jobless in 2010.)
I for one believe this is true. However, I doubt the government will ever release such a report. Hence after the rumor was in the wild, reports from "credible" media sources was released, that banks are looking good, read here.
Anyway, that was todays fear news. Notice how far we have gone? Rumor that 16 of the 19 top US banks are insolvent, and its "whatever".
Lets take a look at some charts, first SPX from macro view, then 1 year, and finally gold.
S&P 500 since 1991, does this look like a bull or bear trend overall?
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| From WebSurfinMurf's Financial Blog |
S&P 500 1 year chart, notice inded fell down to 100 day moving average back.
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| From WebSurfinMurf's Financial Blog |
Gold Chart, just yesterday I highlighted gold breaking trend, today it moved up to 100 moving average
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| From WebSurfinMurf's Financial Blog |
Notice when "Fear" returns, gold spikes. Gold may trend higher for next few days or couple of weeks, but I don't think its time to have the kind of fear we saw in fall of 2008.
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