As today started to unravel and gold plumetted I could feel a growing sense of fear inside my belly and at that precise moment I realized that the worm was about to turn.

I looked upon the GLD chart and all the technical indicators were the lowest or very close to the lowest they've ever been in the 3 years since the fund was started. Low is good because it signals a change towards the upside. In fact, there has never been close to a lower slow stochastic reading.

A few moments later, FB sent out a flash update, probably in response to a flood of subscriber emails expressing how scared sh-tless they were. After all, anyone who holds gold stocks and wasn't terrified by 10:30 am could make a killing on "Fear Factor, with their nerves of steel.

FB's update, in a nutshell confirmed that technicals were also stating an entirely oversold market and one that SHOULD be moving up, not down. As Cramer might say, this was a BUY BUY BUY!!!

Now here we are, less than an hour from close and gold remains low but gold stocks have bounced. Goldcorp is in the positive. Yamana, in the positive. Newmont fighting hard but it's days losses are half what they were. AEM way off it's day's low and if I wait another 5 minutes, i can probably say it's in the positive!

This is it folks. The worm has turned. When a sector starts shrugging off what normally drives it down, such as dropping gold or a rising USD you know it's about to move. The shorts are covering. They know it can't get much better for them. And if gold starts to move up, they'll dump their money into long positions.

So say hello to the worm.

diabullic