http://metalsplace.com/metalsnews/?a=7455

"Growing Asian economies could start to diversify out of U.S. Treasury holdings and into gold, Toby Birch, first vice president and investment manager at Bank Julius Baer said Tuesday."

INDICATIONS
U.S. stock futures flat before energy data
Ford downgraded, General Motors downgraded by Bear Stearns
By Steve Goldstein, MarketWatch
Last Update: 6:14 AM ET Oct 4, 2006

http://www.marketwatch.com/News/Story/Story.aspx?column=Indications&siteid=

Dow Hits New High After a Long Recovery
By Brooke A. Masters
Washington Post Staff Writer
Wednesday, October 4, 2006; Page A01

http://www.washingtonpost.com/wp-dyn/content/article/2006/10/03/AR2006100300934.html

Citigroup looks to historic gold price highs

"Citigroup Metals Analyst John Hill has predicted gold to test the $700 per ounce mark by year end and achieve historic highs of $850/z in 2007-2008."

http://metalsplace.com/metalsnews/?a=7456

Besides charts - I use a lot of psychology and gamesmanship ideas in my trading - both day trading and position/swing trading - I like to feel the pulse of the market - not trade on it - but just like to know "where were at".

Has anyone else noticed the strange "Bad is Good" theme lately - it has gone to extremes.

The worse it seems to get - the higher the stock market climbs.

This is not a Wall of Worry IMO - it is more irrational - maybe denial - maybe hope - maybe just plain greed.

It's my premise that we have two options here (for that matter the Fed has 2 options):

(a) Create a stock bubble between now and 2009
(b) Begin to deal with reality.

How the market behaves over the next few weeks/months as it attempts to run to new highs or to 2000 resistances - will determine which course were on.

Oddly enough both cases are bullish for gold long term.

One most post here:

"OPEC agrees informally that it needs to cut oil output by at least 1M bpd; OPEC to defend $50- $55 price floor for its crude oil basket - FT - Kuwait, Iran and Libya informally agreed to join Nigeria and Venezuela in cuts and the UAE is likely to joint"

Not that one can ever trust OPEC - but if falling energy prices were the main fuel for the recent rally - this shows that this particular fuel source is beginning to run low.