Turning points.

Much is being made of the "Hindenburg Omen," a stock statistic that has always registered a certain level before a Stock Market crash. It has done so again. What is to be expected?

It is not the only 'omen' though. There are also movements in the economy (deterioration), Fed policy (real quantitative easing coming) and the gold market (upside move expected after Labor Day.

Most everyone has seen the deteriorating economic numbers. And you may have heard about QE 2 (Quantitative Easing #2). That was a phony. In a real quantitative easing, the FED credits itself with money it creates ex nihilo (out of nothing) then buys up Treasuries. In the so-called QE 2, the FED decided to invest maturing real estate bonds in Treasuries, not to increase the money supply, but to stop it from shrinking.

The Stock Market is about to undergo a drop and that will force the FED to do some real QE. They do not want the Stock Market to go to pot this close to the election.

A real QE will propel gold prices up and the dollar down. Gold is undergoing a reverse head and shoulder and gold prices are working on the right (up) arm. Technicals indicate a move to about 1,300-1,400/oz price range. Interestingly, the DOW is also doing a reverse head and shoulder. All this points to the start of accelerating inflation.

Is the correction in gold price over?

Gold price peaked in June then began to correct. The tops of the trading channel was connected with a green line. Following the double top formation in June, gold corrected about 110 dollars. The last few days, gold broke out on the upside of the trading channel and is trading at $1188/oz

as I am writing this post. The dollar is sharply down, while oil is past $81/barrel. All of this is confirmatory to a new increase in gold prices.