The Pullback Begins

It will be a short and quick one, but it will cause a panic.  It will remind everyone, even bulls, that the "recovery" is "fragile", and this at the least.  It is the depression that never was; the greatest depression never discussed.  Once it is known by the public, it will be too late.

The pullback will wash the Dow once again.  The Dow failed to hit its recent high, and will now run through the 12K range.  But Bernanke will have some ammunition dry; still the world thinks that QE 3 has not been initiated- it has, but in a Light form.  The Light will be turned on for a third time, and the debt will be monetized massively.

Obama is doing everything he can to put buffers on the economy:  He is letting everyone unemployed live in their homes free from their mortgage for another year.  How this is legal, well, Obama does not know the law.

The Military Industrial Complex is still in full swing for the time being, and this is making the Major Banks money hand over fist.  How long oil will be cheap enough to run the war machine, time will tell.  Oil will likely be the end all of the fiat ponzi.

This, but the US debt is still not solved.  If the debt ceiling is raised, finance will be walking dead once again, but with a very inflationary twist.  If not, public pensions will not be securitized, and the unfunded Social Security Trust Fund will be no more.  There is no solution to any problem, except for one.

When all of this hits the proverbial fan, gold will be sought over all other assets.  This will, in the least, double demand, and since supply has been lessening since 2000, price will sky rocket.  All of this comes to a head by August.  What is in store is right around the corner.

Charting vs. Fundamentals

Charting PMs, it looks like prices are going higher, and since PMs lead all assets, then US equities should rise, and the dollar should fall.  Yet, the fundamentals are saying that there should be a pullback.  There is QE Light, but this should hardly mean the usual exasperation that the dollar has felt this year.  So which one will win out, the charts, or the fundamentals?

There has been no significant selloff in gold over the last few days, and silver has shown very bullish tendencies.  Silver has tested daily support over and over again.  Oil has broken out.  Yet, still, the fundamentals are bearish.  The dollar has a little room to maneuver on a technical basis, especially considering the Yen and Euro are weak, too.

But technicals have been the superior to fundamentals for years now, so will we see the sharp rise in US equities now instead of this Fall, like I have supposed?  The bet is on gold, and her sisters Trinity.  Oil will also dictate the terms.  Precious metals lead all assets, and this is the stone cold truth.  Watch them to know the next move.

Dollars of Gold

Today's trend of interest is that the dollar traced gold's move on spot.  Silver, after yesterday's route, went for the ride as well.  Oil almost sold off, and did momentarily, but crept back in line with the aforementioned assets (for better, or worse, in the case of the dollar, considering its historical relationship with oil).

This move is quite a gesture for things to come.  Whichever the stronger fiat between the dollar and the euro always follows gold, so this may mean that the dollar is about to be the better of the two.  This would make sense, considering the move has already started.  Let us see if the EUR/USD makes a run at $1.38.

If this happens, oil and silver will likely pullback to their support, but gold should stay above its support level, if only barely.  Platinum continues to be the weakest of the sisters Trinity, so it will test support too.  As far as US equities, the long trend would say they will pullback.

This has been the Summer Trend I have outlined.  A pullback may be in store in equities for the next month.