Gold is the Fly in the Ointment Today…………with update

In the early trade we are seeing stocks higher, dollar lower, and bonds lower, a perfect start to a recovery scenario.  And then there is gold, it should be down at least three percent, but it is higher.  While we are showing profits in our long stocks /  short gold stance we should be seeing a breakaway.  We will give the markets a little time to gel before looking out further.

 Update at 9:30 AM CST

After watching the talking heads on CNBC and reading a few market letters since the market opening today it is obvious that the funny money crowd does not think things have changed since 2006.  I believe what they are missing is that things have changed in the way countries are approaching financial crisis. 

The world saw what happened when Bernanke used a a pre-2006 solution in QE2 and how the speculative crowd swooped in and ran commodity and stock prices higher without solving the problem.  Bernanke seems to have learned although he still has a soft spot for funny money.  He, on the other hand, has to be looking at the 2012 Republican front runners, especially Gingrich,  and knows QE3 better be kept under wraps.  By the same token Merkle will not allow the speculative crowd to get the upper hand and the new stability pact as outlined over the weekend follows that thinking.  The result, Gold is a relic of old think and is headed lower in my opinion.

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