The Dow has been hit hard with selling, breaking through the key 11,600 support level I’ve been warning about. I said that once the Dow breaks 11,600, the bear is back in control and much lower prices are to come. That means U.S. stocks, and by default the U.S. economy, are going over the cliff.
How low will it go? We need more fear in the market before a bottom comes and I see the Dow dropping to as low as 9,200 before a turnaround starts to take hold.
Of course, it won’t be a straight-down affair. There will be a lot of fake-out moves and with all the uncertainty out there, there will be a lot of volatility. The economic news is not good, and a lot of investors are very, very nervous, and rightfully so.
What should you do? Be cautious. Stick to plays in natural resources and make sure your gold portfolio is up to snuff.
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Larry, I had no idea that tiny little Vietnam was the #1 importer of gold. Do you see their recent move to block new gold imports as damper on gold prices? http://seekingalpha.com/article/83772-vietnam-suspends-gold-imports-follows-fdr-s-great-depression-lead -David