INSURERS PULL MARKET LOWER
AIG PULLS ENTIRE INSURANCE GROUP DOWN... American International has tumbled below its October low on heavy volume. That puts the big insurer at the lowest level in seven months. That's weighing heavily on all insurance stocks, which are the day's weakest group. Chartwise, it's worth noting that AIG has been falling sharply for two weeks. The stock failed a test of its 200-day average three weeks ago (see red arrow). It fell back under its (blue) 50-day average a week later -- confirming the rally failure. It then gapped down on massive volume. As is so often the case, the chart has been flashing negative warnings for at least two weeks. Just another example of the technicals leading the fundamentals. Other insurers being sold heavily are Ace, MBIA, Travelers, and St. Paul. The one bright spot is gold and gold stocks. (See chart 2). The price of gold has jumped $6.00 to a new seven-year high. Gold is now trading well over $370. Our next upside objectives remains to the $400 level. From an intermarket perspective, gold is benefitting from a weaker dollar and falling stocks. Bond yields are falling today -- along with stock prices. (See chart 3). That means that bond prices are rising. We'll take a more thorough look at things after the close today.
Chart 1
Chart 2
Chart 3
OTHER INSURANCE LOSERS...
