As predicted, American markets took it on the chin today. Yesterday I thought we were in for a significant decline of 1% or more -- we ended up down 2.5%. The Dow finished at 12,266 down 315 points while the S&P closed at 1330 down 37. We're very close now to support levels so next week will be extra tense since more bad news early on may push the market below the floor. We'll see what's in store in my Sunday forecast. As it turns out, I was off in my weekly forecast since we finished down for the week, whereas I thought we would be up a bit but close to Monday's opening price of 12,381. Still, not far off all things considered.
Asian markets finished down as well, with Tokyo closing at 13,603 and Bombay finishing at 17,578. Both closed higher than our forecast (13,600 and 17,000) but certainly Monday's action will be negative and more in keeping with our previous expectations.
The Euro closed the week at 1.518, well above our forecast. We were right in calling for an upward trend, however, but underestimated the loss of faith in the US dollar which closed Friday at 0.655. It's clear that the US dollar may be headed to 0.60 by spring.
Our call for a continued bull markets in oil and gold was also correct, although there, too, we grossly underestimated their strength. Gold ended up another $7 today to close at $975 and oil ended the week down a dollar at 101.66. While both commodities will continue to rise in the coming weeks, I think gold has more upside than oil because of concerns of declining economic activity and corresponding demand reduction.
