North Korea off the front page, What's Next?
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North Korea is out of the headlines giving the equity markets a reason to rally and crush volatility. We continue to look for something that will drive the markets lower as they sit on edge of breaking down. They are only looking for a reason and it’s not economic data; it will be something like North Korea.
Gold had a great rally last week and tried once again to push through $1,300 but failed. We look for a pullback to 1260-1280 and then a push up and through $1,300. The pattern looks good and the metals look like they are ready to take off.
A sell off in equities would be good for commodities because the money that will come out of equities and look for someplace else, Gold, silver, and grains. The economy is a big mess and the thirst for yield is pushing equities higher. This too shall pass.