Chuck checked in last night…

Bill:
just want to go on record saying that today was a very strange day technically, both in the stock market and in gold. And that comes from someone who knows the full meaning of the word.

Tomorrow being an option closing day, might be also unusual. First, regarding stocks, the 10,000 level brought in very little selling, and yet from what I read, the sentiment has been basically bearish. One CNBC poll had 39% of the participants expecting a sharp sell off while another 30 per cent not expecting anything dramatic. That means only a small amount were buying into this rally. That is bullish. Second, the volume in the Dow was incredibly quiet and yet the market made a new recovery high. Could be bullish or bearish, but my guess is that it is bullish.

Gold? Imagine. It makes a new ALL-TIME high but if you look at the daily charts since then, almost of the spike moves weren't to buy as you might think, but to "GET ME OUT! Jon Nadler says it's a bubble because there is no buying coming from the jewelers in North Korea and Myanmar. Do I want to put a limit? No! Just get me the worst price you can. I must have plenty of company when I buy and when I sell. I'll take the proceeds and add another room to my house."

So, for the two billionth time since 2001 the stocks did its obligatory gap down, and then just languished there all day. Most of the smaller ones barely traded or moved. At one time, I counted up the 55 or 56 gold stocks that I monitor (please I don't own that many) and only 8 were up. That is very bizarre on a day in which gold was down $14 and yet the HUI was down only about 10 points. Another point is that the gold-silver ratio rose, which I believe is positive. If this is an inflationary binge as I see it, the ratio will go down the mid 40's before a tradable top is in.

Finally, today marked the 8th day out of the past 9 Thursdays and Fridays. Again, this is significant because these two days are about as contrary as you can get. One of the reasons I was certain that the stock market was going up is that it was down two straight Thursdays and Fridays, a very rare concurrence except when it is about to move up. But with gold it always seems to be down on these days, and yet here we are at $1050.

Concluding, this feels like we are into something that few are expecting. To me it smells like a rush into anything tangible. Stocks, definitely commodities, and most of all, gold and silver. I can't explain it fundamentally, but there are a lot of bears still out there who are reading the terrible news in the papers. If this is totally liquidity driven, then we should soon see copper blow through $3 just as we now see oil jumping $10 over the past week. But the main event will be gold and silver!! Chuck ikiecohen@msn.com