Soon after the Stock Market opened today, it seemed as if the stocks will Rally once again for the second day in a row, and be in the green zone for the third day in a row. But over the past hour and a half, the Dow Jones have been steadily decreasing. Currently the Dow has dropped more than 38 points points after being up more than a 100 points just earlier. It almost reached 11,300 and for a moment, we expected it to surpass and keep going.

The NASDAQ Composite on the other hand, have lost more than 21 points already. The S&P 500 has dropped a little under 5 points. And the New York Stock Exchange has dropped more than 48 points.

NYSE Chart

Chart of NYSE for August 24, 2011 Provided by Scottrade

Of course, the stock market is a dynamic place. It will go up and down all day long. We can only hope that some of the momentum from yesterday carries over into later today and the stock market sees significant increases. It’s still early and anything can happen. People are still hopeful of the announcement Bernanke will be making on Friday. His announcement could very big way, whether it’s for better or for worse.

Earlier today, Moody’s Investors Service also downgraded the credit rating of Japan from Aa2 to Aa3. Standard & Poor’s and Fitch also downgraded Japan’s credit rating earlier to AA-.  The rating downgrade doesn’t seem to have a huge effect on the US Markets, positive or negative.

What seems to be affecting the stock market even more, and may be keeping the stock market from rallying for the second day in a row, is the report about the decline in Home Prices in the country once again. Bloomberg reported that prices on US Homes fell 5.9% in the second quarter this year compared to the same quarter of 2010. Foreclosure rates are still high and people are still losing their homes. This is and always will negatively affect the stocks. If the next quarter report comes in that prices on US Homes have risen, the stock market will rise with it.

Even though the stock market isn’t rallying like it did yesterday, the Price of Gold has still dropped. So far today, it has seen a big tumble of 74 points or 4%. It’s currently at $1,784 points and the gap between the current price and the previously expected $2,000 per ounce is even bigger. Just yesterday, gold set another record or more than $1,900 an ounce.

There is still almost 4 hours left until the markets close today. I think we will see more fluctuations in the market. We can only hope that the Dow Jones bounces back up and goes to the green. Gold may keep going down as investors may feel that the gold bubble is finally bursting and use the opportunity to cash out while the gold price is still high. The opposite can also happen. Since gold dropped almost a 150 points this week alone, investors may use the opportunity to purchase more gold in hopes that the price of Gold keeps going up. If the announcement on Friday doesn’t go very well, gold prices just as well may go up and keep going up. A good outlook on the announcement has provided a temporary relief over the past few days but if the stocks keep decreasing at the rate they have been today, all of that could be undone very quickly.

I’ll keep an eye on the stock market throughout the day in hopes that it comes back from the red and into the green. I also speculate that the price of gold will increase a bit as the day progresses because I believe investors will most definitely use this opportunity to buy Gold a a discounted price.