The Rally That Wasn't There

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"For the moment, seal off major wipe-out risks. Exit all money funds and currency time deposits, step up gold & oil positions, move into 1-2 year government bonds (non-US $) in First World nations. Swiss first choice. Think not of yield; think of an ark's life preserver around your neck."

Schultz is currently negative on the stock market. On gold, he writes:

"We were unduly cheerful about gold's path in last HSL. The entire commodity market from asbestos to zinc took a dive, along with most stock markets, not to mention a business slowdown. It was caused in part by the overshoot all markets had in recent years -- many going to record highs -- which eventually called for a mega correction to the mega rise. And in part caused by the global monetary mess which is having a deflationary pull-down effect."

But he concludes:

"Our upside gold targets are still valid, as soon as the currency/metal/oil corrections exhaust themselves, as all storms do."

Schultz' upside target, at last report, was $1,600 in fairly short order."

Nervous, choppy conditions will dominate - specs have further reduced long positions last week. Dollar direction and Ike to a lesser extent, will remain in the driver's seat. There is a definite absence of gold pundit-originated (aside from Mr. Schultz) comments about gold benefiting from the epic "Frannie" news. The spin has turned to how little value has been lost. Must be some kind of price intervention of the 'third kind.' The search is on for a new reason due to which the world as we know it will end. Soon. Advance doomsday writing teams have been dispatched to Area 51 and to Roswell, New Mexico.

Speaking of Area 51:

We hope to see you in Las Vegas and the Hard Assets Investment Conference. Even if those assets are a bit softer than previously experienced at the New York event in May.

Happy Trading.