Watch for signs...

Watch for signs of faltering price action in the inflation-based markets. This morning's economic data produced knee-jerk strength in crude oil, gold and stocks. Inflation-minded traders have fully committed to bullish crude and gold positions, as well as bearish US Dollar positions based on their inflation expectations. These inflation-based speculative trades are extremely saturated and vulnerable to a liquidation wash-out. Such an event would have spillover negative influences to many other markets. Be very watchful of price action that goes contrary to the knee-jerk reaction and their desired reaction.