Does Anyone Really Know What Time It Is?

Of course, the glib answer is, "It's the end of the 3rd quarter." But we're thinking it's time for a reassessment across the board as to where the four major economic powerhouses are headed as we enter Q4 of 2014.

The United States saw consumer confidence slip unexpectedly today, although it could very well be a blip on that index of expectations. People often vote differently with their mouths than they do with their wallets. Gasoline prices are falling, crude oil is flirting with $90 a barrel again, prices are stable and employment is fairly robust. One possibility, dependent on demographics is that the country is aging and that process does bring a fair amount of anxiety with it. But, we expect the U.S. to continue upward, if at a slower pace with growth spurts now and then.

The eurozone has problems. Serious problems. They stem from an inability to come to common agreement concerning what should be done to get the world's largest aggregate economy to prime the pump. Germany has been dragging its feet for years now on the implementation of a more potent stimulus, belief in the power of markets being particularly strong in Europe's main-engine nation. But now France is beginning to bang its own drum about expanding and accelerating stimulus, and that will put them at odds with Germany, their partner thus far in financial rectitude. But Europe is sunk without new measures. Let's see if the rest of the euro-space has the bravery to face down the Germans.

A lot is brewing in China, most of it not very palatable. China is facing the very first of its glass ceilings, something that developing countries experience as they move from 20 to 15 to 7 then 4% growth. While the unrest in Hong Kong is not indicative of a greater movement inside mainland social arenas, it is indicative of a general malaise that has settled over the world's most populous country. As large as China's huge cash reserve may be, it can't float its entire system on that money. Behind the scenes, it is being said that, except for global enterprises like Alibaba, financing is growing scarcer in China. One Alibaba does not a tech giant make. A single tech region of the United States, whether it be Silicon Valley, Seattle or the Boston-New York corridor, dwarfs China's tech sector by a factor of at least 10.

Then there is the forgotten economy - Japan. Japan has been strengthening recently, much to everyone's surprise. Even though today Japan's economy was shown to shrink, largely due to poor consumer purchasing performance (which in turn is due to a dramatic increase in the VAT), the Asian dynamo is still cranking out products, delivering innovation and is a seriously large world player. But - it needs more stimulus and especially needs more consumer lending.

The developing countries are seen as too high risk right now, although Brazil and possibly Chile seem to offer plenty of opportunities. You can safely assume that Russia as a spot to park your capital is off the table. Turkey is too close to the meltdown zone at the shared border with Syria and Iraq.

Gold is wavering through all these contradictory currents in the world. Fundamentally, it seems unable to find a direction to commit, too. And like most herd-mentality quandaries, it seems people are more inclined to take baby steps, first to the upside, then down. Investors can nibble and still feel full at the end of the day. Everyday investors are waiting for a definitive move.

Gold traders are left with technical indicators, which are also somewhat muddy. Just a few weeks ago, technicals were in control. Now it seems as if the wishy-washy fundamentals are taking a turn at bat.

To return to the headline of today's letter: we do know what time it is. It's time for October, a notoriously dangerous month for investment in anything. History backs that assessment up. We also know that it's time for some more solid inflation to prod gold back to haven status. We know that the holiday retail season is going to be a pivotal one. We know that oil is headed lower. (Now that really is about time!)

We know it's time for a correction in the S&P, but that bargain hunters and those spreading their blue chip bets are sniffing for good value in stocks that have been neglected for years.

We know right now - time being everything - that gold is off today about $7.00 at 5 PM EDT.

As always, wishing you good trading,