The Markets refuse to...

follow the predictions of those pundits,who are predicting a drop in gold prices and a continued strengthening of the US Dollar. Take Larry. He continues to see a very serious weakness in gold and figure it will drop to $1500, maybe lower. The weekly gold prices tell a different story. Gold continues its upward climb. In fact, the MacD histograms give up a double peak below zero, which means that we are not yet to the half-way point of the current rally. Look at the Feb-July period of last year and we see a similar formation. We can expect then the rally to continue for an equal time, such as during Dec and January.

We see the opposite with the US Dollar. We see a double top formation, with the Macd being in the positive territory while the actual value of the Dollar Index is beginning to fall. Again, Larry's prediction of the Index going to 81 and above is not likely.

Finally, I have said in a previous post that the FED can act any time and it is not likely to wait untill the DOW goes to 9,000. The bailing out of the European banks creates something like $800B, so this may act as QE3. Indeed, the FED's action lifted the Markets and the DJI finished above 12,000 for the week. Europe's long term problems have not been fixed, but in the short term, they have the FED ready to bail them out.