The Market that won't...

Fresh from missing the Summer rally in gold, Larry predicts that gold will fall hundreds of dollars/oz, to recover only after a big drop in the DOW to 9000 and QE3. Since, his prediction is now almost a month old, it is appropriate to examine the data.

The top graph shows the weekly gold prices. The graph shows a market that just won't quit. The MACD tells the story that we can now expect the blue columns to cross to the upside and keep going for several weeks before another high is reached, most likely above the previous high.

The second graph shows the DOW. The Industrials just broke out of a wedge on the upside. Granted the preliminary numbers for today show a 200 point drop in the DOW, the MACD shows a steady rise. So, there is no sign of an immediate drop.

Finally, the daily gold price. We see gold rising toward 1,800.

Today, we see counter moves everywhere. The Left prevailed in Ohio and unions were successful in repealing the new labor law, Mississippi turned down a constitutional amendment to protect babies from conception and Berlusconi is promising to resign. The debt avalanche has finally reached Italy and Italian bonds reached 7% - an interest rate the country can not sustain. The ECB intervened to reduce the rate, which raised the value of the US Dollar and restrained gold, if temporarily. Eventually, the ECB will have to print more money to help Italy roll over a total of 1.9T Euro debt.

I think Larry is wrong again. I believe that the FED is printing again and it is not waiting untill the Stock Market crashes. The DOW will stagnate untill we see the next phase of inflation that will cause dramatic rise in equity prices and PM prices.