The Current Bear Market: Death By a Thousand Cuts

7/2 - "The general stock market behavior recently has been painful, to say the least. Now with DJIA broke below March low, any hope of a quick ending on the current bear market diminishes...January and March lows will not hold for the current on-going bear market, and we should expect a 2nd leg down leading the S&P toward the $1,100 level."

"Usually, strong rallies happen during a bear market, partially due to short squeeze but more due to false hope that the bear market will end soon and greed will take over, as investors try to pick a "bottom". This kind of bottom picking rarely works, especially during the early phase of a bear market, when sovereign wealth funds [SWF] buy investment banks and other financial institutions in the 1st half of this year."

"I am also very concerned about baby boomers getting close to retirement. According to Jeremy Siegel, a professor at the University of Pennsylvania's Wharton School, his computer model shows that, putting aside help from overseas investors, the boomers' retirement could cause stock prices to fall 40% to 50%."

"During a bear market and financial turmoil, capital protection and preservation is far more important than taking risk for capital gain. Gold also provides good protection to double digit inflation which we are currently facing (not the government published scale-down figures). When inflation expectation skyrockets, long bonds will suffer heavy losses and TIPS won't provide protection from price increases on energy and food. With equities, bonds, real estate and US dollar all falling to face a slow death by a thousand cuts, only gold can save us now."