Recovery Elusive in DJIA

Wall Street Journal: DJIA Slides Under ‘Flash Crash’ Low

GDP and unemployment are much more important when it comes to measuring the state of the economy, but the Dow Jones Industrial Average is a media-friendly, constantly-changing index.  And so it was big, big news when the Index dropped 1,000 points back in May.  Remember that?  People blamed the fall on an accidental trade.  Someone hit ‘b’ for billion instead of ‘m’ for million, and it triggered a mini-panic?  No such excuse this time, and yet the drop-off was worse because there wasn’t an influx of last-minute buyers to salvage the drop:

Stocks fell on Monday in a late-day selloff that took the Dow Jones Industrial Average below its lows of the May 6 “flash crash.”

The Dow ended down 115.48 points, or 1.2%, at a seven-month low of 9816.49 and below 9869.62, its low-point of the May 6 slide. That day, buyers rushed into the market at that level, helping pare a 1,000-point drop to a decline of 347.80 points.

But on Monday, no such buying appeared.

Meanwhile the Euro is down (thanks to fears about Hungary being next in line after Greece) and gold is continuing to soar.  Corrections are an inevitable part of any strong return, but this isn’t a strong return or a correction.  It looks more like the sputtering sounds coming from your car that might make you afraid the engine is about to give out.

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Comments

  1. William A. Rose says:

    It is about to give out. There has been talk of a double-dip recession for a while now. It’s taken a back seat to other more important news (who won the American Idol contest and whomever the new dancers are and Nataly Holloway’s killer) – priorities, you know.

    I think anyone with even half sense can really see what’s going on and what’s about to happen if they just look at the economy. Well, anyone could (italicized) see.

    Fun times ahead folks. Put on your seatbelts. And stock up on food. And guns and ammo. And help your fellow man. We are all gonna need each other. Desprately.

  2. m00pa says:

    I’m no econo-miester….so I could be way off in my thinking – (I think the S&P is a better example of the economy than the Dow, due to there being a more deverse group of things being traded)

    I remember when the S&P kept pace with the price of gold, or vise/versa. Sure, it didn’t match-up straight, but they cruised together seperated by a handful of points.

    FLASH forward 14 months – In today’s market gold has out paced every other form of investment. (new record high yesterday, $1245.60 an ounce) This shows me proof of the uneasiness of investing in other areas, or fear of another collapse over the horizon, I don’t know which.

    With this thinking – I must ask: Am I way off?

  3. Goldline says:

    3:29

    Donald Trump and his gold apartment is looking like it was a wise way to go.

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