Investors interpreted Bernanke’s statement as stimulus remains in play. Just like Mario Draghi’s “whatever it takes” policy statement several weeks ago, it offered no specifics as to the form, size, and purpose. The rather vague economic and policy assessment, nevertheless, sent stocks, bonds, and gold higher.

Anyone following money flows knew gold has been primed for a rally since Gold’s Diffusion Index (DI) peaked at 86 early May 2012 (chart). I have been saying for months that smart money was accumulating gold and preparing for rally long before any pronouncement coming out of Jackson Hole.

Chart: Gold London P.M Fixed and Gold Diffusion Index (DI)


The A-wave rally will meet resistance at the previous C-wave high (all-time time) at $1895. The timing of the rally will be determined by the actions of the invisible hand. The invisible hand, similar to 2009, will attempt to delay the breakout to new highs as long as possible. The breakout to new highs will most likely be setup by three distribution counts (three taps and out). The C-wave or mother-of-all-rallies in the ABCD count system will take gold to new highs, send the doubters to their knees, and should begin on average 23 weeks from the early May 86 DI reading.

Headline: Bernanke lifts Wall Street, keeps stimulus in play

By Caroline Valetkevitch

NEW YORK (Reuters) - Stocks rose on Friday after Federal Reserve Chairman Ben Bernanke, expressing "grave concern" for the stagnating U.S. job market, said the central bank was prepared to take further steps to strengthen the economy if necessary.

Though Bernanke, speaking in Jackson Hole, Wyoming, dashed some hopes for a signal of quick action, his comments bolstered bets that the central bank was closer to providing more stimulus for an economy that is close to stalling.

Stocks had been flat for much of the week ahead of Bernanke's speech, though expectations of additional stimulus from the Fed helped the market this month. All three indexes posted gains for August.

"I think the debate is how strong growth is and how aggressive the Fed is going to be," said Giri Cherukuri, head trader at OakBrook Investments LLC, in Lisle, Illinois.

"Hopefully the economy will just get better on its own, but I think the Fed is saying they're going to be there and is trying to tell the market that they have some power to help things along."

Energy and materials shares were among the best performers, with the S&P energy index (.GSPE) up 0.9 percent and the S&P materials index (.GSPM) up 1.1 percent.

Source: finance.yahoo.com

http://edegrootinsights.blogspot.fr/2012/09/gold-doesnt-care-about-jackson-hole.html