Gold's Rally Abates; Stocks' Correction Dilates

Ever since finding its way back up and nestling into The Box (1240-1280) these past two weeks, Gold's "rally"  looks to have run out of steam, the tempting safety and serenity of The Box offering a place to pack it in for the balance of the trading year. As we've documented time-and-again, The Box has been such a common area in which to find Gold's price during recent years that it is almost as if  therein fixed, (similarly as it was at $35/oz. until Nixon's nixing of the Gold Standard).

"In other news, the price of Gold remains fixed at $The Box/oz." Or for those of you seeking precision while scoring at home, price settled yesterday (Friday) at 1242. That said, here's something that's "not supposed to happen": on September 27 Gold was 1186 while the Dollar Index was 94.59; the latter today is up to 96.91; (a gentle reminder that Gold plays no currency favorites). Moreover since that date, the US money supply (M2 basis) has increased from $14.26 trillion to $14.42 trillion. More Dollars and yet they're valued higher? "Got Gold?"

S&P 

This past September 20 saw the S&P 500 close at its highest level ever: 2930; yesterday it closed at its lowest level since then: 2600; thus its widening correction-to-date is 12.5%. Regular readers know we're seeking the correction to ultimately run a full course of 27% (from the September 22 high print of 2940) to 2154 (a structural peak achieved just prior to the 2016 stateside election), a level also at which ought then find the price/earnings ratio reasonably 'around 17x versus our "live" reading at present of 38x. (We shan't repeat such results' mathematical machinations made months ago). As for the timing nobody knows, albeit as herein noted a week ago, more bodies are jumping on the correction bandwagon. As usual, it's fun when earnings "beat estimates", but not so fun when earnings belie price, the Federal Reserve Bank raises rates, the Dollar further firms, the Economic Barometer keeps falling and tariff tart fights continue.

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