Gold Stocks have become a "no brainer" short play...
That's the good news and the bad news in a nutshell. The big commodities selloff is helping the dollar and keeping gas cheaper than it would be otherwise.
But the market abhors a no brainer...on the short side or the long side.
Additionally, there is this notion that gold is weak because the dollar is strong...but the dollar is only as strong as Bernanke's willingness to raise rates.
BERNANKE SIMPLY CAN NOT EXPECT TO SUCCEED BY JAWBONING ALONE.
My hunch is that Gold stocks will revisit their 52 week lows...but then rebound strongly as the market realizes that Bernanke can't turn the dollar around solely based on interest rates and gold bashing...
The commodities selloff needs confirmation in the bond market and by the FED at the next meeting...a 6% Ten Year bond by the end of this year is "doable." And if that happens...? Stocks are "done" for quite some time.
