Today’s action looks like a further sell signal in the Dow. Two basic reasons. The false breakout to the upside and the follow up (or follow down) on Friday.

Technicians often interpret false signals as the prelude to valid signals. The awaited for signal now is a break down out of the triangle and that looks very likely at this point. If that occurs as seems likely at this point then a test of the January low is likely. Remember — those who didn’t honor the sell signals in Enron wound up using their stock certificates to start fires.

Stocks down. Gold up. Any questions?

SLV silver up. Any questions?

Commodities (DBA tracking) up. Any questions?

TLT. Looks like buy signals in the 20 year treasuries. (The gaps.) While Congress and the Administration fiddle the country burns. What spooked the market this time? Could it have been the news that the Iraq war is going to cost $5T (rillion)? What a inaccurate forecast we made back at the beginning (or shortly thereafter) when we said it was going to cost $2T. And, oh, incidentally the $5T estimate does not envision a 100 year presence. Price for that: $100T.

Stay long gold and silver and oil and you’ll be able to afford it.

Happy birthday Frederic and Pirates of Penzance.