Asia was down last night ex-Japan. The Nikkei roared back 2.99% which looks good for the current pattern. Europe is down across the board with Spain getting hit the worst.
Gold is flirting with the lows of 2011. The question is: could gold and copper be telegraphing deflation instead of the widely-held inflation thesis. Gold's performance throughout the Cyprus mess has perplexed the inflationists.
The thing to realize is that there is far, far more debt than can ever be repaid. This has a drag on money velocity, which remains at its lowest levels in over 50 years despite the best efforts of the Fed to inflate.
The other side of the coin, as shown by Tim Backshall, is that gold is merely testing its 3-year rising trend line. So watch how it acts from here.
Watching how the futures are acting since yesterday afternoon's low is encouraging if looking for higher highs to come. 1558.47 is the hard stop. Anything above 1573.66 is possible, with potential all the way to 1580. I will look to get very short up there, as it appears that the current pattern, a possible ending diagonal, may be terminating.
Yesterday was another mediocre performance from the A/D line which could not break out from its persistent down trend. This simple indicator is not a timing tool, but it rarely fails to point out a phony move.