Stock Market update: Stock Market Blog -Aug 21st

This week we saw some big sell offs again in the market, though the volume wasn't quite as high as the sell offs earlier this month. Much of it was sparked by fears of a European financial crisis, along with bad economic numbers reported again this week. I won't be surprised to see a 2008 style financial crisis in Europe before long. Investors flee stock funds at rate not seen since 2008 panic

The 10 year bond reached an historic low yield below 2%, lower than during the 2008 financial meltdown! Is the bond market telling us something here???

Gold was on fire, and hit another record high! Last week marked 40 years since President Nixon took the US dollar off the gold standard. Gold was $35 per oz. then, today it's $1852 per oz.

Google spent $12.5 billion to buy Motorola Mobility for their patents!

Hewlett Packard tanked on Friday, hitting prices not seen since 2005.
SHLD also dropped.

New unemployment claims came in at 408,000 (chart).
This week, three more banks were shut down by the FDIC! (list).
Next week: (Economic reports link). Annual Fed meeting on Friday.

Bank stocks are in trouble again!
Bank of America
Citibank
Regions?
Bank of New York
(click to see charts)

Foreign banks: Deutsche Bank Societe Generale Barclays PLC

Market Commentary

We 'did' get a nice bounce on Monday, and European financial issues 'did' spoil the party -just what I said last week! I would still look for a bounce soon, to start getting out of long positions. I suspect the market will drop to the recent lows, then give us a bounce. Keep an eye on Europe still, as I expect things over there to deteriorate further. In a worst case scenario, we could fall all the way back down to 1050 or 1010 on the SPX, and give back all the QE2 gains!
Market’s rally from oversold levels may not stick

Looks like we are headed for a bear market as investors lose confidence, and into another recession as well (as if the first one ever ended!)

BTW, I'm one of those that believe high frequency trading should be banned (trading thousands of transactions in milliseconds). It can often cause unnecessary disruptions in what should be an orderly market, and it's only a matter of time before it creates another 'flash crash' or worse. This is not investing, it's becoming 'War Games' for stocks, where the computers take over the trading.

This weeks charts:
10 year Note yield hitting all time lows!
Gold continues to hit all time highs

Commodities (charts):
Oil prices dropped, closing around $82.25 per barrel. Looks like it's headed to $72
Natural Gas dropped too, closing near $3.94
Gold was up again, closing at $1852.
Silver broke out, above the $42 level.
The 30 year Bond was up again, closing near $140.31 Light volume, but still no top yet!
The US Dollar was mostly unchanged, closing near 74.05