Wait and See

Gold and Silver are holding after big drops yesterday but I think they can drop more.  The Dollar is a little stronger and soon might break upwards out of the current chart formation.  There is nothing to do but wait the markets out and of course to see what Bernanke comes out with tomorrow and POTUS says on September 5.  Europe is still a mess and nothing has changed.  The Hedge Funds seem to have built up a big short position on the S & P indexes.  The perfect trade ( at least from the Fed's point of view ) will be to see the hedge funds trapped long in gold and short in stocks.  So somewhere in here the stock market may start to bottom out but perhaps not yet. In the interim, we could see sharp up moves as "announcements" are made followed by selling pressure and equally sharp down moves as Europe deteriorates. I am still long EUO and am still riding hedges on my physical metals position.