It's different this time

I hastily posted diffusion index indicators yesterday because the signals/setups were rare. Crimped by time, I did not explain them thoroughly.

When money flows coincide across key markets, it is rare and tends to proceed significant moves. The positive money flows in the diffusion index have preceeded big moves in gold and silver to the upside since 2001. For example, the last time the diffusion index produced a reading above 60 was 9/09 - 11/09. Gold traded between $750 and $790 during the setup. Once the money reversed, completing the setup, gold touched $1000 within four months, and was on its way to $1200.

The dynamics behind the Euro, the impending double-dip recession (can't call it a depression), the loss of key democratic senate seat, the synthetic dollar short - take your pick. MOPE will encourage you to believe that the decline in gold is different this time. "It's different this time" is always a dangerous assumption.

Let me pull from the urban dictionary again - money talks and bull sh*t walks.

I have done this long enough to deafen my ears and follow the money. A sixth positive setup in the gold diffusion index has been generated. These setups are rare and always precede big rallies. It is simply a matter of time now.

Gold London P.M. Fixed and the Commercial Traders COT Futures and Options Gold Diffusion Index (DI):


Silver London P.M. Fixed and the Commercial Traders COT Futures and Options Gold Diffusion Index (DI):