It is Fed day and all is right with the world. Stock market up in pre, banks and financials have stopped tanking, oil is in the dumper as the commodity complex tanks - taking gold & silver with it. Meanwhile, Bernanke & Co. pretend they have a decision to make on interest rates. The game continues.

Here in this space we remain bearish oil, bearish commodities, bearish stocks but bullish on human emotional swings. Hence, disarray. Especially in an asset class that seems charged with emotion due to the centuries it carries in tow; gold exposes the seams in the Frankenstein monster's cheap get up... and it carries a heavy burden as historical money. Is the 'evil cabal' attacking gold? Don't know, don't care because I doubt such a thing actually exists in any all-knowing all-powerful fashion. However, the CoT's, which are posted here each week compliments of GoldSeek, are starting to improve. Are the 'dreaded commodity and oil bulls' selling with abandon in a hysterical rush for the exits? Most assuredly. Is smart money looking for a buying opportunity in the PM's? I would certainly think so.

Cramer says "gold is done". Many people are clicking their heels dreaming of going home to Kansas and wishing that the concept of an honest money system would just go away so they could get back to business as usual. And this is the time to do it because Deflation Scare '08 is kicking into high gear with the notable break down in oil. The lagging inflation numbers the Fed will pretend to be concerned about will drop off the radar soon enough. As the always behind the curve public's inflation expectations take a manic turn toward concern over declining asset prices, the Fed will go as soft as butter left out in the summer sun. The precious metals - led by gold - will pick up on this first. The question is, from what levels?

The letter I did in June shows the big picture (times like now are the reason I keep the big picture moving forward along with the shorter term, noisier stuff). Specifically, it was noted that the EMA 18 might need to be revisited. That MA was at 795 then and is now at 823. Also, it was noted that a 'touch of the trigger line' might be needed on monthly MACD before a real upturn. Check. The short term is out the window. Now it is big guy time. Big girl time too. Time to understand your fundamentals, understand who you are as an investor or trader, set your limits and keep a lid on emotion. I realize I do not have a preordained right to be right. So, if the big picture beaks down for gold, the financials have seen their worst and Mr. Bernanke cements his 'in Greensp... I mean BERNANKE we trust' creds, then I will get out of the way of that farce because some farces can hold sway longer than you can remain solvent. BTW, getting out of the way means dumping the speculative stuff in the PM spectrum, ie gold stocks. But I do not have ruby slippers so clicking my heels will not work for me. Best to just stay the course and take advantage of the ongoing hysterics for now.

Here are daily and weekly charts of the HUI. Daily shows over sold but room to become more so. It also shows a seemingly crazy target of 260 off the H&S like topping pattern that is becoming confirmed. It is TA and you can't be selective about it. Doesn't mean it will come to pass but it doesn't mean it won't either. On the weekly, we actually see things making a bit more sense. The bull is over if last August's festivities are breached. Again, I'll believe it when I see it.

Edit (7:48) Adding a big picture monthy of the XAU, which has a longer history than HUI and thus gives a look at the status of the giant cup, the right side of which constitutes the bull market.