Monsoons in DC, but blue skies continue for Wall Street

Pols on both sides of the aisle still lovey-dovey today. But beware the long weekend. Photo: AP/Richard Drew

WASHINGTON, October 11, 2013 — 2 p.m. Friday trading action finds the Dow Jones Industrial Average up approximately 100 points as yesterday’s irrational exuberance continues today after a tepid, tentative opening bell.

The broader-based S&P 500 average was up nearly ten points. The stock market is soaring once again as talks continue in Washington over ending a budget impasse that has partially shut down the government and threatened the U.S. with default. Short squeeze, anyone?

SEE RELATED: Time for the 99% to reassess America’s political landscape

On an entirely different note, gold was hammered this morning by a massive trade that may or may not have been in error. In any event, a brief halt in trading was triggered before the order was completed. Gold is currently down in the neighborhood of $30 an ounce, very close to its lows of the year.

Trader John Panin, center, works on the floor of the New York Stock Exchange Friday, Oct. 11, 2013. (AP Photo/Richard Drew)


There’s something fake to all this, however. The value of the U.S. dollar continues to tank which has always in the past meant that gold would go up, serving as a traditional store of value. So why is it that the less the dollar buys, the less that gold buys as well? Are we somehow missing something here, or is somebody, some government, or some really big entity really gaming the system, big time?

SEE RELATED: House, White House talking: Wall Street stocks party hearty

Action in the metal has remained suspicious since last fall, but it has been extraordinarily difficult to discover the reasons behind the yellow metal’s massive and continuing plunge. We’ve never been particularly fond of gold, long term, but we’ve never seen trading like this before in the metal. Then again, this is a market of, by, and for the bigwigs, so someone is making money off the gold bugs somewhere.

Meanwhile, despite two huge up days in the market, at least thus far, added to continuing happy talk emanating from Congress and the White House, the Maven finds it impossible to believe that some kind of clean solution to both the Federal government shutdown and the debt ceiling issue will unfold over the next 24-48 hours.

That, added to the fact that Monday’s Columbus Day holiday is also bank and bond trading holiday makes us mighty leery of putting on any sizeable position that will be exposed to some random politico’s intemperate remark over the weekend. Too dangerous.

If we’re indeed in rally mode again, there will be plenty of time to put on trades. If not, we may get whipsawed once again. And, having seen some of our early year brilliance wiped out over the last three months, we’re highly disinclined to leave things up to the loose lips of the Fools on the Hill over this almost-holiday weekend.

No trading recommendations today.

We’ll be back early next week, Monday if anyone is home on Wall Street, or, more likely, Tuesday when trading on all markets, including bonds, is back underway.

Have a good weekend. Here in DC, ours is likely to continue quite soggy, with the never-ending monsoons of the last three days appearing to be, well, never-ending. A bit like this nation’s budget wrangles.

Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.

Follow Terry on Twitter @terryp17


This article is the copyrighted property of the writer and Communities @ Written permission must be obtained before reprint in online or print media. REPRINTING TWTC CONTENT WITHOUT PERMISSION AND/OR PAYMENT IS THEFT AND PUNISHABLE BY LAW.

More from Market Maven
blog comments powered by Disqus
Terry Ponick

Now writing on investing, politics, music, movies and theater for the Washington Times Communities, Terry was formerly the longtime music and culture critic for the Washington Times print edition (1994-2009) before moving online with Communities in 2010.  



Contact Terry Ponick


Please enable pop-ups to use this feature, don't worry you can always turn them off later.

Question of the Day
Photo Galleries
Popular Threads
Powered by Disqus