i agree today's rally is probably not significant. there's a pattern in play in the HUI (i use the HUI rather than the XAU for determining gold stock trends for a variety of reasons) that points to the current corrective phase having a potential downside target of sightly over 55 points. but the wave structure of the rally since the November low is clearly impulsive, which goes for many of the component stocks as well. in my preferred count, we're now either still in wave C of 2 of 3 of 1, or 3:3:1 has already begun.
this has as of yet not much to do with the PoG itself...it'll follow in its own time.
regarding the Euro, it is true that the introduction of Euro notes and coins is probably what's needed to get it going. the size of black market funds in the constituent currencies is enormous. it is estimated that some 30% of the total German money supply circulates in Eastern Europe for instance. however, i expect the market to anticipate the event, and the Euro to begin rallying well before the actual introduction of Euro cash takes place.
i agree that we're overdue for a scary decline in the broader market - of the fast, vicious, capitulation kind. there is however so much jello moving about (on Monday alone, the Fed added over 7 billion dollars in repos and coupon passes to the system, continuing the frenetic pace of money/credit creation in evidence all year) that some stock market sectors always seem to be able to move up, regardless of the broader market's performance. on an intermediate term basis the gold stocks have decoupled from the broader market since the November low - that may well continue. |
