The Euro Breakout

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Over what might have been an eventful market holiday, all kinds of things were happening:

  • The /ES continued to push higher, both during Sunday's trading and Monday's
  • Gold has pierced the quadruple-digits, much to the delight of precious metals fans
  • The EUR/USD has broken above a very substantive pennant formation

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This could be significant. For one thing, Prechter's entire basis for the resumption of the market's fall is a deflationary economy. All signs point to inflation, not deflation.

It remains to be seen whether gold's piercing of $1,000 simply presages a rise hundreds of dollars higher from here, or if this is the gold bugs' "S&P head and shoulders" event, like we experienced this summer. (In other words, great expectations met with a complete disappointment).