Stock Market alert.

The Stock Market and the gold markets are about to get a correction. Not yet a reversal. The fundamentals have not changed, but trader sentiment has. This is why it is important:

When bulls and bears are equal, there is little opportunity. But, when sentiment tips to one side or the other, bet the other side. Here is how it works. When sentiment becomes very bullish, there is hardly anyone left to buy, so prices drop. When sentiment turns overwhelmingly bearish, there is no one to sell and prices go up. Right now everyone is invested with little money on the sideline left to buy. Gold has been up from 860 to over 1200. So, everyone with cash has bought in. Now comes the drop in stock prices and gold prices and those with UUP shares will make a bundle.

Financial media will prattle about the effect of the Dubai World default, the effect on financial, etc. But, that's all just to make themselves look important and wise. The real reason is that people are short of cash.

The fundamentals have not changed though. The FED created $2T trillion new currency last year out of the thin air and will create about $3.5T next year. Anyone who thinks that will make the dollar stronger is a fool.