The markets continue trying to discover what things are worth. With so many things in motion, so much fog and so much doubt, they’re having a hard time. Every day seems to bring 100+ moves in the Dow.
Yesterday, the Dow rose 178 points. Investors paused. They heard rumors that maybe Greece wouldn’t hold a referendum on further austerity moves. They saw France and Germany twisting the Greeks’ arms.
As the US economy slows… maybe Europe will get its act together, after all, they said to themselves. But today’s news tells us that the Greek cabinet has approved the call for a referendum…even though the French and the Germans are threatening to withhold money.
“If they want to have a referendum, that’s of course their right, and we very much respect democracy,” a senior official told The Financial Times. “But in that case, they probably should not expect the others to pay out money before they get the answer.”
But hey gold went up yesterday. It rose $17.
Discovering…discovering…always discovering. We were surprised that gold had not fallen more. We were surprised that stocks had not fallen more too.
But just like Mr. Market to toy with us…to string us along…to tempt, tantalize…and then, disappoint…us. He’s like a cat playing with a mouse. The poor little mouse is doomed…
What better way for Mr. Market to deceive everybody! First, he pretends that a recovery has been set in motion.
Then, he pretends that inflation is heating up.
Then, he tips everything towards depression…
And then, he hesitates…neither gold, nor oil, nor stocks have corrected as much as we think they should. Investors get back into stocks. Oil goes above $90.
Surely, he is getting ready to pounce again…and take another pound of flesh out of investors’ fat derrieres…
Stick with the program, dear reader. Sell stocks on rallies…buy gold on dips.
for The Daily Reckoning Australia