D&D Note (4-4-2012)
Today we saw a further sell-off in the markets in reaction to the FED minutes released yesterday stating that there would not be any likely near term QE. Usually the large mutual funds take a day to digest the news, and today we saw the larger institutional selling.
Oil and Gold saw a further sell-off, with Silver falling the most due to the also industrial weakness that may lay ahead (half of the uses for Silver come from industrial uses unlike Gold which has no actual use other than jewelry and space probes). If Gold falls more we will see buyers come in.
Usually Gold doesn’t move as fast as it has the last year and creates a fibonacci floor. However since Gold moved up so fast it never actually technically created that solid floor – leaving investors unsure where that fib level is. The consensus thought is that it is somewhere between 1620 and 1680. Currently it is sitting right at $1,621.70. Right now it would be good to see some sideways movement so that it can create that technical floor to the price. Historically once Gold has created that technical level it has never fallen below it.
Financials led the decline with Goldman Sachs (GS), JPMorgan Chase (JPM), Citigroup (C ), and Bank of America (BAC) all falling by more than 2%.
The ADP payroll report came in today weaker than expected, also fueling the selling. Traders are reluctant to hold positions heading into the long weekend and with a possible bad job number to be released on Friday. Don’t be surprised to see further downward pressure tomorrow, but we need to see further declines before we can come in and start buying.
Spain also had a less than robust debt sale today fueling more downside to the markets.
SanDisk (SNDK) makers of disk drives, saw shares fall after cutting its company outlook – which also brought down the tech sector as a whole.
The bright side… the dollar gained against the Euro and British Pound.
D&D Investments 
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