I was watching the trading last night overseas, and the USD was up just a couple tenths of a cent, oil was flat, but gold was already headed lower and silver was down about 20 cents early on. So it was pretty clear that a raid was underway, and tomorrow we will probably see the TOCOM open interest increased from new shorts put on.

Yes, the dollar intervention has boosted the USD, and yes, oil is way overbought and needs to come off its highs. But I still see the action today as another raid to try and restrain gold. The fact of the matter is that there is heavy spin to try and sell the idea that inflation is contained, and for that to hold water the rise in gold must be capped. So leaning on gold is job one.

I could not believe this second-rate bozo they had on BNN last night, who was calling for moderating inflation, a strengthening dollar, and a recovery in the 'oversold' financials. Where do they get these guys? Is no capacity left among the money managers for critical analysis? IF there is value in the financials, its based on what? You cannot go with a book value analysis because its very obvious the full extent of the writedowns in the loan book has NOT be discounted in, therefore any book value assumptions are purely creative writing. Therefore the rest of that value game breaks down. Financials account for a large chunk of the total economy, and there will be no braod based recovery until the financials have put all the dirty laundry out of their balance sheets. Therefore no recovery in the dollar.

Take the action in the markets today as another lame effort to paint a pretty picture. It will amount to a short covering rally and not much else.

cheers!

mike