Wednesday, July 27, 2011

It's Getting Close

The pullback in the Dow is almost done.  I have been looking for a pullback to Dow 12k, and the big drop today brought it close.  I thought this weekend there might be a flash crash this week, and many stocks have lost their shorts, and big stocks too.  3M lost big, Netflix too.  When large cap equities lose as much as they have recently, you have to wonder what is happening.  It is part of the deflation equation that I have gone over previously, and it is also large investors moving their chips around the table.

Money has been steadily moving into precious metals over the last month or so.  We have reached an important reflection point.  A while ago I called the bottom in silver at $41.  I did so because $41 was a point where the price of silver started to goo parabolic.  It is also an important psychological price.  Moving over $40 shows that silver has more than industrial worth.

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