There are "fast markets," characterized by heavy trading and highly volatile prices. This is not one of those markets. Although losses were accelerating at midday, major averages have thus far continued their recent pattern of sliding on low volume while trading in fairly tight ranges.

But it was a "fast market" in terms of multiple developments on various issues this column has recently discussed. So I'd like to proceed with a series of brief recaps here, and follow up later today where appropriate.

Small-Cap Conundrum

As of 2:20 p.m. EDT, the Russell 2000 was down 1% to 487.58. The Russell 2000 breaking 490, which represents the neckline of a head-and-shoulders pattern, had the

"small-caps' run is ending" crowd in a mild lather at midday. (A head and shoulders is a bearish chart pattern characterized by three peaks, with the middle one being highest. The troughs of the two peaks that flank it define the neckline.)


Russell 2000 is finished," emailed Rick Berry, formerly of Centennial Capital Management in Atlanta and now an independent analyst. "Four-ninety is now new resistance,

and any moves back there should be used as sells, as the index is screaming reversal here. The

Russell's decline is just starting. I bet we see 400 before 506."

On the other hand, I mentioned this development in the

Columnist Conversation, and a reader pointed me to a recent column by contributor Helene Meisler, who agreed that 490 represents the neckline of a head-and-shoulders pattern, but a "minor" one in her estimation. "The Russell is vulnerable in here because of this short-term bearish pattern, but this short-term bearish pattern only measures to the 470 area," she

wrote back on May 22. Meisler suggested a trade to 470 would be "just a correction, not a total collapse" for the index, noting that 470 is a higher low.

Indeed, 470 represents only a 4.5% decline from the Russell's close yesterday, but clearly the debate over small-caps' ongoing leadership continues.

Go for the Gold

Gold futures were trading higher once again, with the price of the yellow metal recently up 0.4% to $326.80, while silver futures were testing $5, a level not seen in 16 months. Precious metals were getting a lift by renewed weakness in the dollar, particularly vs. the euro, which traded at a 14-month high of 0.9333 cents at around 1 p.m. EDT. The euro was matching its post-Sept. 11 high in recent trading.

However, strength in the underlying metals and weakness in the greenback were not aiding related stocks at midday. The Philadelphia Stock Exchange Gold and Silver Index was lately down 1.9%.

Gold shares were being hampered by a Goldman Sachs downgrade of


(AU) - Get Report


Barrick Gold


to market performer from market outperformer, and Australia's

Newcrest Mining

to market outperformer from trading buy.

AngloGold was lately down 2.2%, and Barrick by 2.9%.

"All three stocks have surpassed our target prices," commented Goldman's precious metals analyst Daniel McConvey. "We believe that gold will be more challenged to rise substantially from current $324 levels over the next year due to weakness in physical jewelry demand and that investors overweight should take some profits."

Meanwhile, Market Vane reported that bullishness on gold has risen to 86%, the highest level in the current cycle. The implication being that now that gold's near two-year rally has (finally) gotten the attention of most market participants, it's going to falter.

Of course, those who believe there are

fundamental reasons behind gold's surge -- not just fears of global instability and terrorism -- contend that any near-term pullback in related shares should be viewed as a buying opportunity, especially for those still underexposed to the group.

Notably, while downgrading recommendations today, Goldman Sachs' McConvey simultaneously


his 12-month price targets on AngloGold to $36 from $29, on Barrick to $25 from $22, and Newcrest to A$9 from A$8.

Additionally, he raised prices targets on

Freeport-McMoRan Copper & Gold

(FCX) - Get Report

to $25 from $21, and on

Newmont Mining

(NEM) - Get Report

to $36 from $32.

Goldman has done underwriting for or "rendered significant corporate finance services" to AngloGold, Freeport McMoran and Newmont.

If You Build It

Toll Brothers

(TOL) - Get Report

today posted

second-quarter earnings of 69 cents a share, up from 58 cents a year ago and well ahead of consensus estimates of 62 cents.

The company's revenue of $550.5 million also exceeded expectations and was 7% above year-ago results. Homebuilding-only revenue was $539.1 million, up from $497.5 million last year.

In a press release, Toll Brothers said it forecast "record results in 2003 and 2004" on the basis of current demand, though it gave no specific guidance. In an appearance on


this morning, Chairman and CEO Robert Toll expressed the kind of wide-eyed optimism that has driven homebuilders' skeptics nuts.

Toll Brothers shares were recently down 1%, and the S&P Homebuilding Index was off 0.6%, weakness which had the naysayers thinking

"Aha, maybe the end is finally here."

Those long the sector should be thinking about taking profits here, as earnings comparisons are going to become increasingly difficult in the quarters ahead, and the group is vulnerable to any kind of "negative surprise." However, homebuilding's biggest names continue to demonstrate a remarkable ability to take market share, and the industry should remain strong as long as mortgage rates remain low and consumer confidence relatively high, as discussed

last night.

Aaron L. Task writes daily for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

Aaron L. Task.