Comparison chart: Gold in Green Silver in Blue

Markets Robert Prechter is a very good market forecaster (so long as you don't put your money there) who uses a nearly impossible to understand indicator called the "Elliot Wave Theory" as the peg on which his hat is hung. But he uses cycles as well (the 50 year Kondratiev Wave) and cycles are very accurate (Jake Bernstein) for calling tops and bottoms within time frames. Prechter and others usually follow the silver market for clues because it seems to be the most reliable of all predictors (there was a time when the soybean/silver ratio was a matter of unchallenged fact). I do not subscribe to Elliot Wave Theory News Letter but I used to and was using it when he called the "big crash" of 1987. At any rate his silver call of a collapse last Friday was triggered more by the incredible 98% bullish sentiment that was present, a figure that is unsustainable, than by his wave theory alone. The collapse of the past three days is the worst in memory. Gold USUALLY follows silver (chart at top) and it is a complete myth that Gold is a safe haven during bad times. It just doesn't fall as fast as the rest of the economy---in general. The concern right now is the market following silver down and this is what we must watch. Gold dropped over the past three days, the dollar gained value, oil dropped, and a hell of a lot of other inflated commodities prices fell as well. The possibility is present that the dollar slide is over, over because more than enough world players don't like what else is out there---ECU backed by nothing, ditto the pound, Swiss Fanc (NOT backed by gold as is popularly thought), and other currencies in countries of notorious reputations. So what's the story morning glory? I think the dollar is in the process of turning, gold may sell off several hundred dollars, and commodity prices are going to drop big time. Asset Deflation. Stay tuned.