Although it is not out of the realm of possibilities to get conflicting or contradicting statements by members of the Federal Reserve, it seems it only takes one hawkish statement to send the markets in a tailspin. The Dallas bank Pres. is on record as being one of the more dedicated critics of our current quantitative easing program. Nonetheless his statements truly saturated the market today with the thought of the onset of tapering our current monetary policy.

There can be no doubt that the US economy is beginning to pick up steam. And this statement followed the most current report on the US service industries in July. According to the Institute for supply management their non-manufacturing index jumped to 56% in July from 52.2% the prior month.

However even with real signs that the US economy is slowly recovering, one must realize that it is our employment status and real inflation rate that are the primary benchmarks that the Fed is looking at to determine at what point tapering our current monetary policy makes sense.

The real question remains is whether or not the real uptrend in gold which began last month at 1181 is still intact. There can be no doubt that Friday's lower pricing put a damper to that belief. However it is my current belief that the recent correction is in line with a corrective wave that we will discuss in detail on today's video.

Wishing you as always good trading,