A Huge Spike In The M2 Money Supply Occurred In August

The huge spike in the M2 money supply in August (http://www.federalreserve.gov/releases/h6/Current/), in response to the credit/mortgage crisis, see http://research.stlouisfed.org/publications/usfd/page6.pdf, explains how the S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) was able to exceed it's July cycle high by +1.30% after hitting a major 5% sell signal a few months ago (see chart 2 at http://www.joefrocks.com/GoldStockCharts.html), and, largely if not entirely explains how HUI (http://stockcharts.com/charts/gallery.html?%24hui)/XAU/gold were able to take out their 5-11-06 cycle highs by about 5%.

Notice also that M2 experienced it's largest plunge in over a year (possibly much longer) in September, see http://research.stlouisfed.org/publications/usfd/page6.pdf, which is a major negative for the market. I'm going to be watching M2 data.

....... http://www.JoeFRocks.com/ .

HUI NEM XAU