I'll Take "Ridiculous Headlines" For $100 Please

What's wrong with this Bloomberg headline: "Gold Rises to Near 18-Year High On Alternative Investment Demand"? Apparently, investors have been purchasing gold because they have been seeking... (gasp!) alternatives to U.S. and European currencies, bonds and stocks (oh, forgot to add Bulgarian real estate, timber, and Czech-assembled AK-47s). Uhu... It used to be the case that investors would purchase gold because they were fearful of inflation. But, NO, we *don't* have any inflation in the U.S. (!) -- or do we? My point is this: either the price of gold is overvalued here, or we do indeed have significant inflation in the U.S., which is not reflected in the officially distributed government statistics. I lean toward the latter. I don't believe in coincidences -- there is always a reason why something is happening when it is happening. We may of course find out that particular reason 18 months from now (when it might turn out that the Fed has been playing M3 -- the money supply, not the BMW model -- shenanigans all along), but I, for one, would never invent an inane headline to hide the fact that I just have no idea why something is happening. I would advise the folks at Bloomberg to kindly change the headline to "Gold Rises to Near 18-Year High And We, Just Like The Rest Of You, Sorry Lot, Have No Bloody Idea Why -- But Do Please Stay Tuned, Because There May Be A Lot More To It Than At First Meets The Eye!". There, I said it.

Otherwise, the market is stuck in a rot during option expiration week, with SPX index resistance at 1238 and support all the way down at 1225. I said a few days ago, that the bulls' obstinacy is going to be hard to argue against, given the 4Q-seasonality strength (this time of the year), and the absence of any new bad news out there. The longer we stay in the 1225-1238 range, the greater the likelihood that we break the 2005 yearly highs (around 1245), come December. In fact, possibly overshooting all the way up to 1275 might not be such a far-fetched goal after all.