It was always a bit too much to believe. The market that doesn't rest; Silver's failure to follow through; the ever increasing leaps higher that form the parabolic; and the omnipresent danger of a stock market sell-off that takes everything with it (we've got that one too now - in embryonic form). It all adds up to something that doesn't add up. And so here we are:

So, to answer our caption question, we are tending towards the latter, and it is all eyes on equities to see how things work out.

The truth is that Gold has had a big run, and if we get the sell-off that comes after these types of runs, we could take several months to settle down - in what is likely to be a volatile environment. With 'silly season' coming in August-October, the traditional time for equity market blow outs, we will be watching and waiting to see how the stock market performs. If the Fed cuts rates and equities don't mount a sustained recovery... well, look out below.

Silver was always our lead indicator and it did its job well. (see our last few articles for our admonitions on the matter.) We were wondering where the heck that pull back went to. That was about two months ago. Well, the market simply needed to blow an ever bigger bubble and suck everyone in, causing people to believe in the proverbial party that never ends. ... which always does. We are there now. Next target is in the chart above. If equities get pelted properly this fall, expect the metals to get liquidated. When the margin man calls, everything goes out the window - gold included. When max pain is exacted - we will start the assent again. This time to $3,000. Of that we have little doubt. Our move to cut core positions - something we rarely do - turned out to be prescient. That's the kind of failure we were staring at.

As we said last Wednesday, "you'd have to be mad not to take profit on trading length here." And the last six weeks i.e. May 30-July 16 - saw the S+P 500 move a whopping 10% in that short time frame. If that doesn't scream "Watch out!" we don't know what does.

And so, the question arises, yet again, as it always does... (and as he always asked), "Did you chase strength in Gold?"

That's what made him the best, and perhaps the most successful.

So it goes in the world.