Gold is sitting on its 200 day as Dan Norcini points out that the RSI has again retreated. “Quiet markets like this make me nervous because they can make big moves in either direction at any time. With gold, the tendency is to make the big move lower when the gold shares continue reeking to high heaven. The HUI feel through its floor of support at 420 as if it were non-existent.” There are no speculators to drive the markets and if the HUI goes below the 400 support area the next support is around 342.

Jesse today:

“Intraday commentary in which I discuss the policy errors of the Fed in relation to consciously funneling monetary stimulus through financial firms and assets, bubble-wise.

I think the market is greatly overbought and would see a correction, but VIX remains extraordinarily low, so it would be shallow or at most a 'wash and rinse.'

It will take a macro event to break this ramping, and it might not take all that much given the thin volumes …

There is no underlying strength in the economy, so the loans being securitized will not be repaid in real terms and the banks and the investors will ultimately offer them to the Fed, who will buy them at non-market prices.

What's to stop this? There's nothing stopping it.

There is no threat of prosecution for fraud. There is no shame or sense of morality.

There is only a ton of money to be earned by the banks/hedge funds/private equity with no threat of punishment for engaging in massive fraud …

… the word that has made its way across the trading desks is that the Fed's put is back on, or more colloquially phrased, while Bernanke keeps printing, certain favored classes of assets can keep going higher, without regard to fundamentals, except for significant event-driven incidents, that will be quickly papered over.

Otherwise, the dips will be shallow and the trend will be maintained. For how long I do not know, but as the VIX shows, perceived risk is back down to low levels that we have not seen since the growing credit bubble of 2004-2007. “