Thoughts from the Vortex

Morning Gang,

Very interesting action over the holiday weekend. The ES (SPX futures)skyrocketed on Sunday and Monday with all the Asian Markets. Triggered by Gold getting over $1000. This morning we are almost back to the week ago plunge. This backtest may be the graceful exit the market gives...or a large spike higher as we are now over the 1080 degree mark again. Today is giving a very good risk reward for participants to short with defined stops. The cycles of time begin in ernest Sept 9th and play out thru Oct.

Are we in Deflation? Robert Prechter basis his large pullback to come off this theory...What is gold saying about that. China today even said we are printing too much money and they are buying Gold and diversifying their reserves..

Are we going into inflationary times... all indicators say yes.

Or are we going into a combination of the two? As we unwind the debt crisis of the US homeowner and coming commercial real estate refinance season, will we see inflation move to cetain assets (financial,commodities,precious metals) and deflation in real estate. That is my hunch.

Cycles should start to exert here for a trend reversal if we are to get a meaningful pullback.


The Dow is on a nice 1,2,3 pullback on the daily chart and still within the LROD down on 9/1 we will see.