Mr Sinclair, I believe, said that gold goes above and stays above the magic number on its third attempt. It looks to me that this is only gold's second attempt.

The gold averages of the HUI and the XAU have been losing relative strength against the metal for weeks now. When does this condition change? Will gold continue strong with the gold stocks catching up on this move or are the gold stocks signalling that a reaction for them may be near? One thing is certain, the CDNX is basically stalled without getting too much encouragement from either the HUI or the XAU at the moment.

Now that the 5000 day average on the Dow has broken down at 7885 and stocks are now paying the price with a major market meldown, I suspect that this general environment will be a burden on the HUI as well as the XAU for an unknown period of time. In my view, a higher gold price is just buffering them from full impact as most stocks tumble lower.

In the background, is the anti-gold element which continues offering more and more paper shares adding to the current market malaise for the group. Somewhere ahead, all of this will change for the better but for the moment we must continue listening to the HUI and XAU for short term market guidance.