By Roberto Pedone

WINDERMERE, Florida ( Stockpickr) -- The S&P 500 is dropping for the fourth straight trading session on Tuesday as investors digest a very disappointing existing-home sales number for July now that the expiration of the homebuyer tax credit is in full affect. Existing-home sales plunged 27.2% to 3.83 million units in July from a downwardly revised 5.26 million in June, and were 25.5% below the July 2009 level of 5.14 million units.

Some market-players are concerned that the chances for a double-dip recession are growing by the day, which is inspiring a shoot-first-ask-questions-later type of response to equities. Market-players are pretty much dumping anything that they can find a bid for. The selling was intense enough to momentarily push the Dow Jones Industrial below the key psychological level of 10,000.

As I write this, 480 of the 500 stocks in the S&P 500 are trading lower. That is a pretty amazing statistic, and it shows just how weak the stock market is across the board in almost every sectors.

However, as I scan across my screen looking for anything that might be bucking the trend and trading higher, I find really only a couple of sectors that are showing any meaningful buying interest. One of the few sectors that is working today is gold, as represented best by the action in the SPDR Gold Trust ( GLD).

Just for observation purposes, I will also point out that the SPDR S&P Homebuilders ETF ( XHB) is trading fractionally higher, but I believe that could be due more to short-covering since the sector is heavily in control of the bears.

The gold sector, to me, feels a lot more like real buying and real demand. Although I am sure there are plenty of bears circling that sector as well. The problem with the bears in the gold market is that they have been ridiculously wrong. Year-to-date the SPDR Gold Trust is up 12%, and in the last five years it's up a gigantic 175%.

A perfect storm might be forming in the gold market, with a lot of things working in this commodity's favor at the moment. First of all, the shiny yellow metal tends to get lots of money flow when there is a tremendous amount of fear in the markets, and it's hard argue that the market isn't being driven by a lot of fear right now. Second, we are quickly entering a seasonally strong period for gold and an even more seasonally weak period for equities.

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