Good Morning,

A worldwide plunge in stock markets followed yesterday's Dow closing under the pivotal 7500 mark. Whatever confirmation of ursine signals coming to an end one was searching for in equities, they did not get them. Worse, global investor appear to have just opened the doors to a den full of hungry, cranky, and no longer hibernating bears. How scary is that? Scary enough to send anyone with whatever cash they had left into the one part of the global cave that feels relatively safe from a mauling at the moment: gold and the dollar.

The interesting part of such developments is that investors are either appearing to be reacting to headlines some six-to-nine months late, or that their remaining shreds of confidence finally disintegrated following the Madoff/Stanford/etc. scandals. UBS wrestling with Uncle Sam did not help matters either. Trust no one? Trust April gold at $998.50. Trust nothing? Trust the dollar at 87.68 as much as that strange bedfellow syndrome flies in the face of conventional goldbug punditry. Dollar strong? We'll take it, so long as we get to enjoy four-digit gold: we heard from one source this morning. Or, almost, as of this morning's start.

New York spot gold notched a 2.3% opening gain, quoted at $995.40 per ounce. Little or no reason to believe that $1K won't be seen on today's price tickers, at some point. No reason to believe that once that number is achieved anyone knows what is next. Markets tend to get nervous and totally unpredictable (as opposed to mostly unpredictable) when euphoria and/or capitulation are in the brew. And, at this time, both emotions are in the mix.

Overbought? Who cares? Oversold? Who says? So long as losing money is at the centre of the radar, you can forget valuations. Individuals act with the herd, whilst claiming they want no part of it. Capitulation was on Mr. Trichet's lips today as well - finally recognizing that this (whatever you like to call it) is not a campfire but a global bonfire. One that has his kingdom aflame in the worst way. Also consider the 'matter-of-fact' type headlines being released when it comes to the nationalization (!!!) of automakers and banks. If this is not some kind of nadir, we'd hate to see the actual one.

Silver popped 42 cents higher, quoted at the $14.45 level basis spot. Platinum gained $22 to start at $1089 on a combination of spillover buying from safe-haven seekers and renewed attention from Indian buyers (who are still dumping gold into these highs, and are turning Japanese in their preference for the subdued, classy beauty of platinum). Chapter 11 filing at SAAB took no one by surprise, at least as far as auto catalyst-related metal traders were concerned. Chrysler floated the idea of merging with GM (again) as a survival strategy.

Oil prices gave back more than $1.50 of yesterday's mammoth one-day 14% gains (consider that gold rose by about the same amount over one month) and 'fell' to $37.87 per barrel. You tell us if these gyrations do not have the footprints of spec funds written all over them. 'Cause last time we checked, the fundamentals did not yield a particularly warm/fuzzy. As for the Dow, it only looks fuzzy and warm-blooded) if you see it as big and brown, sporting sharp claws.

The last three times when gold and the Dow were skirting the 7:1 multiple (if you believe in those metrics) the ratio ended up shooting to 20 and 30:1 in the ensuing five or ten years. As well, when broken, that ratio fell to 2:1 and to parity in less than five years. That happened twice since the 1920's. And, if you are looking for capitulation, witness the holders of shares lying down and playing dead in the hopes of escaping with their lives. As we have frequently been heard to say, enjoy the lofty gold price - but do not forget to tally the rest of your portfolio that same night; it might be worth next to nothing.

That said, it is enough. The next few days might best be spent in front of 'buy' and 'sell' trigger buttons than reading analyses and such. Prices will move fast and sharply enough to revive the nearly-extinct day-trading species.

Happy (Careful) Trading. $999 and 20 cents as we sign off.