Up, Up, Up, Down, Down, Down

U.S. equities certainly sent their invitation to gold today to act like a high-quality haven investment, but the trading gods went against us late in the day and, after 1232+, we've settled back down for a modest $2.40 rise.

Dollar strength whittled away what might have been a bigger gain, a gain that would have been propelled by regular trading - buying by late-arriving bargain hunters, have seekers and those betting on a bit more steam in the current rally.

Strikingly, the fundamental forces that drove down the stock markets - a widening war in Syria and Iraq, irrational fear of ebola, and the very well-ground fear of europe's economic shortcomings - did not power up a huge interest in gold.

Moreover, wall Street overlooked strong published Q3 profit reports with the promise of more to come in the next week or two.

"Europe's growth is weak, and close to going into recessionary like conditions; everyone is waiting for the bazooka to be fired," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

Another unfounded fear the equities are trading lower on is Fed interest rates, although we fail to see how much clearer the central bank could be after reading the minutes from the September meeting released yesterday.

Looking over this table will tell you everything you need to know regarding the Fed's outlook on inflation. That, in turn, will tell you where they will be heading with rates.

It should also be noted that there was only one dissenting vote regarding the holding of interest rates near zero. Historically, the average dissenting vote tally is - one.

Overall, the equities are missing momentum, and while we may not be in a classic correction, we are certainly seeing a reappraisal of where the economic dynamism we've experienced over the last two years is going. Let's say there is some pessimism in investors right now. Our take on the S&P is that the weak will get weaker, and the strong will either maintain slower growth and only a few stock will stay "hot."

Let's return briefly to inflation and thus to the Fed's rates.

Crude oil is hovering slightly below $85 per barrel and Brent petroleum has breached the $90 mark on the downside. Crude is off another 2.4% today. While energy is often carved out of CPI evaluations, try as the experts might, energy prices are baked into larger wholesale and retail prices. The fall in oil may not cause your favorite CPI gauge to fall dramatically, but it simply must affect it.

Let's say it shaves 0.2% off the CPI, or even helps inflation stay where it is. The Fed won't budge on rates until inflation looks like it will approach the danger zone.

What people know is true, however, and what they fear without reason are two different things. So, the equities are and will be more volatile, which, broadly, is good for gold bulls right now.

Keep in mind, though, that even volatility can be volatile. So, calmer stock market conditions may be right around the corner.

As always, wishing you good trading,