Blow chunks, suck donkey dick, or  whatever metaphor you want to use if it breaks through and closes below $1.35.  Could it be temporary? I don't know but the daily chart (not shown in this post) already shows the 50 DMA below the 200 DMA and gaining traction.

The weekly chart has the 50 WMA awfully close to the 200 WMA and getting closer.

Well would you? Or would you wait till $1021ish?  What's everyone's long term outlook on Gold?

Yeah, the Gold upward trend got busted in my system around December 8, 2009.  My stop would've been hit at $1150.53 and since I own some physical gold too, I started debating my exit strategy from that.  I'll go long in Gold again when it hits another all time high but for now I'll just sit on my hands.

Despite the selloff of nearly everything, the CRB index’s 50 WMA is still above its 200 WMA.  The 50/200 DMA isn’t and it looks like its not bottoming out anytime so this great index is likely to follow in the footsteps of many other indices soon.

It sure gives me the heebee jeebees seeing almost everything crashing out there.

The only bright spot I can see for our economy is lower oil.  It’s sure to help with heating costs this year as people struggle to heat their McMansions or fill the tank on their Hummers.

“Sentiment is extremely pessimistic, people believe we’ll see a global recession despite the measures being taken by governments,” said Jochen Hitzfeld, an analyst at UniCredit Markets & Investment Banking. “Many commodities like platinum, agricultural commodities or gasoline have fallen below their production costs.”[via Bloomberg]

It might be time to buy a bicycle and start walking to the grocery store.  This market crash in equities and commodities will rewrite human history, as it did in 1932.

I’ve been busy rebuilding my Gold neural net model over the past few days with new data and inputs using the new version of Rapidminer.  It’s the same model I used to write my published Futures Magazine article and tinkering with it should give me new insight into the current Gold trend.  This is particularly important to me because I want to know if any future pull backs in Gold is a buying opportunity or something else.  I predominately use my trend models to find buying opportunities and this works great in Forex and Metals.

Many people I correspond with thought the Gold market was crashing when the price broke through $750 recently.  I seem to remember a lot option acitivity around the $600 level as well.  My old Gold model told me otherwise and I paid a visit to my Gold dealer earlier this month.  I’m curious to see if it will tell me to visit my Gold dealear again in October.

It figures that the Gold and Oil markets start to collapse just as I go on hiatus. My guess is that hedge funds are selling their winners to cover their losers (financials, banks, etc). This has had a nasty consequence in the currency markets with the AUDUSD collapsing from its near parity with the USD to around 0.80. Next stop for Gold could be $600 and Oil maybe $80 (wishful thinking?).

My timing models are going wild and pointing to a lot of market crosscurrents. This shouldn’t surprise me because we are in September after all and I can’t wait for October. We are at a very heavy volatility area in the S&P500 market and we could be making a low or preparing for the next leg down. If we are to go lower from here, it’ll be at least a 100 point drop in the S&P500 down to the 1100 level. How’s that for optimism? The upside potential for the S&P is around 1350 right now.

I’m still on hiatus but had to pop in to make a few comments. I should post my last video tutorial sometime but I don’t know when I’ll get to that.

You have to love Jim Rogers and the interviews he gives Bloomberg. He’s a wise man that comes across as a cranky at times but we should listen carefully to what he has to say.

“I don’t know where these guys get the audacity to take our money, taxpayer money, and buy stock in Fannie Mae,” Rogers, 65, said in an interview from Singapore. “So we’re going to bail out everybody else in the world. And it ruins the Federal Reserve’s balance sheet and it makes the dollar more vulnerable and it increases inflation.” [via Bloomberg]

Commenter and blogger Kevin H posted this reply to my $5 Trillion Dollars of Debt post yesterday, “How in the world is the U.S. going to bail Fannie and Freddie out of 5 trillion? We are already in debt 9.5 trillion dollars.”

Yes, the question is “how” and “can we?” Stay long Euros, Gold, and Oil for now.

Although I’m still on vacation, I had to pop in and check on what the markets are doing. Stepping away from the markets is a great way to change your perspective and hopefully see any traps I might be stumbling into.

Gold has finally started getting active again, probably because of all this Iran attack talk. I’m guessing we’ll see Gold at $1000/oz by the end of the year and possibly $2000/oz next year.

I’m curious to know if my readers think Gold could hit $2000/oz next year or if it will collapse back down to $500/oz.

Late last week I was working on a Genetic Algorithmic model and analyzed the current state of the market with it.  I wasn’t surprised at all when I found that Gold, not necessarily oil, is the major driving force of the sentiment of the market right now.  It doesn’t matter how steep or flat the bond yield curve goes, the higher the price of Gold goes, the lower the markets go.

Eventually Gold will run its course and the markets will recover but the key price level right now for Gold and the markets is $900/oz.  The markets will tread higher for any price (and dropping) lower than $900/oz.

This is good news, my Timing Model volatility indicator is actually dropping. It peaked at 2.9 on 3/17 and has steadily dropped to 1.79 as of yesterday’s close. This confirms my cautious belief that the market has bottomed but we’re not out of the woods yet. Everything hinges on what Gold prices do in the next few weeks.

Right now the market is driven by what the Fed is doing and will do. The best indicator to watch on how people react to the Fed’s policies and decisions is Gold’s price. Gold prices and the S&P500 are almost an inverse relationship and the higher the price of Gold, the weaker the S&P500 is.

I know this is so last week but you have to admire how quickly Gold broke down. The chart reveals that it broke through its 50 DMA within in two trading sessions and could even head lower from here. A lot of people think the top in Gold has happened and I probably agree with them for now.

The subprime mess isn’t over yet, I’m waiting for the other “shoe” to drop in the banking industry. In other words I’m expecting one more bank to fail or require emergency Fed funding to keep operating. Which bank? I’m guessing here but I think it might be Merrill Lynch. This is just a hunch and I have no knowledge of its current financial status.

Any more volatility related to subprime or banks failing and you’ll see Gold over $1000/oz again!