Gold Daily and Silver Weekly Charts

I was out most of the day.

The markets were quiet, digesting the recent developments in the US domestic economy, but especially with the European debt situation.

See you Monday.

SP 500 and NDX Futures Daily Charts

Gold Daily and Silver Weekly Charts - A Possible Breakout on Debt Monetization in Europe

The 'gut check' in metals was very short-lived, as the precious metals rallied with the melt up in financial assets on the debt monetization plans out of Europe to save their banks.   It was 'risk on.'

What next? We may have some follow on, but continued upside depends on additional QE3 from the Fed, as well as the actions by all the world's central banks to monetize the private banking debt and inflate their currencies.

The metals will do well in this kind of an environment. But the sailing is not yet clear.  There will likely be more upside after corrections, but if this works, then the major test will come with the December option expiration.

As a reminder I will be out of pocket tomorrow and will not be looking at emails or the markets, probably not until late night or Saturday.

SP 500 and NDX Futures Daily Charts - Time To Go On Bubble Watch

A massive rally in US equities today led by financials as there was relief that Europe will be bailing out the sovereign debt of some of their members, and most importantly of all, the large European and US banks.

The US GDP came in well. Intraday commentary was provided, and it was a hollow victory as household income continued to decline.

I think the stock rally may have more to go, but it might take QE3 to take it much higher into year end. And if we do get QE3, we then go into bubble watch as financial assets inflate at the expense of the real economy.

This is what happens when one applies monetary stimulus to a broken economy.