The carnage continues in China with the market closing after 30 minutes of trading when it reached the 7% trigger point to close the market. That weakness spilled over into the European and US markets this morning, all of which are sharply lower.
One bright spot this morning is the that gold seems to be finding new friends that have pushed it up to its best levels in 2 months.
Why is all of this happening?
It all boils down to market perception. Perception is perhaps the most powerful force in the marketplace and the perception right now, no matter how irrational, is that investors do not want to own stocks. Investors were clamoring to buy Amazon when it was approaching $700 a share, now this morning Amazon is down almost $80 from its recent highs. Did Amazon's business model suddenly change? No, perception changed. Investors do not want to own Amazon right now as they think they can buy it lower.
The other big change, of course, is the fact that the Fed is no longer printing money and using quantitative easing to goose up the market. The fact that easy cheap money is no longer available is a psychological impediment to the market going higher. Continue reading "Market Perception, China And Why Gold Is Going Higher"
How many times have you turned on your television or computer to see that Corporation XYZ is expected to make huge profits, but when you look at the chart it is telling you otherwise?
It is always interesting to live through history. However, I think many traders, or should say investors would probably like to forget about the history making market action on Thursday.