STOCKS SELL OFF ON BAILOUT PACKAGE AS FINANCIALS LEAD DECLINE -- BONDS AND GOLD BOUNCE IN SAVE HAVEN BID -- GLD AND BARRICK GOLD CHALLENGE AUTUMN HIGHS

STOCKS FALL IN HEAVY TRADING ... Stocks have sold off in heavy trading after details of the new bailout plan were released. The hourly bars in Chart 1 show the S&P 500 SPDRS tumbling more than 3% in heavy trading. It's important to note that the recent bounce failed to clear initial chart resistance at 87 (equivalent to 877 in the S&P 500 cash index). Big board declines are beating advances by near five to one. The daily bars in Chart 2 show the S&P 500 cash index also backing off from its 50-day moving average. The biggest losers are financials (-6%) and banks (-10%). Consumer discretionary stocks are being pulled down by a weak homebuilding group. All market sectors are in the red with the smallest losses in healthcare. Bond prices are bouncing as stocks drop. A bouncing dollar is pushing most commodities lower, except for gold.

Chart 1

Chart 2

GOLD JUMPS AS STOCKS FALL ... Chart 3 shows the streetTracks Gold Trust ETF (GLD) jumping the equivalent of $17 today. Bullion is back over $900. Chart 3 shows the GLD stalled at overhead resistance formed last autumn. A close over that chart barrier would push gold to the highest level in six months. Chart 4 shows Barrick Gold also testing resistance at its September high. ABX is one of the bigger gold stocks and one of the few already trading over its 200-day moving average. I believe that those resistance barriers will eventually be broken, and that gold (or selected gold stocks) is still the best haven in this dangerous environment.

Chart 3

Chart 4