Let's now review the recent action in Gold's price. The mood of the gold community from 905 to 1000 was fear. From 1033 to 1225 was complacency. At 1075 there was fear. At 1160, complacency. That complacency is transitioning to: fear. The worst investors are becoming more active in the market, and the best investors are becoming less active, thinking bigger. Think about that. The result of those two actions is going to be that the worst investors lose exponentially more money than they have already been losing, and the best will make exponentially more.

GT also wondered if the banksters might turn the comex into a cash market. I believe the odds are probably at least 50% of such an event. It would crush the leveraged fundsters and put all the physical bullion in the comex warehouses in the hands of the banksters. There really isn't that much gold in the world. The average comex gold contract only survives about a $15 price hit before being liquidated. GT laughed his head off at the idea of operating at those kind of leverage levels. GT didn't get rich on leverage. He got rich buying weakness and selling strength. You've been told. Again.

Let's assume for a second that there is a major dollar rally at hand. Again, put your gold in the closet. Keep the two assets separate. I want you to have a picture of a boat rocking back and forth. All the people on the boat are tossed from one side to the other. Don't guess which way the Ocean (the banksters) is going to move the boat.

Rather, respond to the direction as it occurs. Here's the US dollar chart.

It's looking better and better to me, on the daily chart. When I bought, the chart didn't look good, it looked horrific. Now it looks positive, and I'm positioned to take profit should price follow the indications on the chart. Relative Strength (RSI) looks positive, Williams looks positive, and short term Stochastics, MACD, and TRIX series are all flashing crossover buy signals.

The monthly chart on the USD is also starting to look positive.

Initial crossover sell signals are fading and the chart is getting a positive look to it. Some of my subs have built substantial dollar positions in the USD and things look positive that Kachingo time is on its way. Notice in particular the positive action on the short term 14,3 Stochastics series and the 4,8,9 MACD series. They are hinting at a possible turn up in the dollar. There is a huge bull non-confirmation in the RSI that is a powerful argument for a coming rise in the dollar.

Regardless, in the larger picture, Gold remains in total control of the dollar not the other way round, and I believe 2010 is the year Gold gets aggressive in its punishment of dollar bugs and punishment of both gold and dollar flip floppers.

To the dollarbug micro-minds, I suggest they enjoy their rally, should it occur. It will likely be their last party for a long long time. As a group, my subscribers stand to make a lot of money in any dollar rally, and yet this is chimp money compared to the gold positions sitting in launch mode.

Mentally, when you are all-in or all-out of an asset class, you can become "broken" when price goes against your analysis. This will happen to the dollar bugs to the point that many become suicidal, and many will actually kill themselves, or so I believe, unfortunately for them. When you hold a contrary asset class position, you may be surprised how little a position is needed to take your mind off any decline in your larger gold positions.

I want to close this off with the note that while the dollar is rallying this morning against the other paper currencies very strongly, it is not rallying against gold. Don't bet against gold with the dollar. You might book some wins, but overall you will lose, as you have lost for 100 years if you tried it. Bet against other paper with USD paper.

I believe today is a litmus test day for most of the gold community. A dollar rally has a high chance of being near at hand, perhaps even being here and now. The question is whether you once again start running to the garbage can and throwing your gold in there. That's exactly what the banksters want you to do.

Because as soon as you all start dumping on weakness, you create a wave of downpricing, and the banksters buy all you fail and bail on. If you leave gold now, gold will leave you in the dust. All you are doing is selling a small amount of gold to "test the waters" but crushing the majority of your gold if you do that.

Let's see who has wisdom and who wants to put another notch of failure in their investment gun, who wants to put on a gold clown mask and dance in front of the banksters to entertain them. Buy the dollar, yes. Sell your gold, no. Or you will crush yourself.

Courtesy: www.321gold.com

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