Supposedly today’s sell off is related to the Italian elections. If you believe that I have a bridge I can turn you on to. The driver of this action has little to do with Italy and everything to do with US. Yes, the U.S. The implications are horrid, and as in the dollar/SP500 chart I posted a few days ago - the patterns suggested a very strong dollar move…which implies strong asset moves as well. Things have started to play out, though still in the very early stages, exactly as would be expected from that chart.
Gold bugs are bearish, I agree, however, with such a powerful bearishness we will need divergence between sentiment and price to trigger anything lasting in Gold…and, if that is the case, the above chart sets up what looks like a very nasty break that is emerging. One in which the VIX has begun showing us that it wants to go MUCH MUCH higher and do so urgently. Its a very rare ocurrence for the VIX to trigger back to back bollinger signals and its not likely to trigger another single day signal for a while. This means - fireworks are to come. The S&P500 targets arodun 1420 or so and a break there sets up a waterfall decline which certainly would go a long way to trapping many of those bullish borrow money to buy stocks type guru money managers.
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