Another leaked news story suggesting a deal on the debt ceiling

Here we go again! Tuesday it was comments from the President that some progress was being made on the debt ceiling negotiations that derailed gold and sent the US equity markets in a tizzy to the upside. Yesterday, that was walked back as things were once again at an impasse. Today another story hits the newswires that a deal is in the works again. Down goes gold; up go the equity markets and down goes the Dollar.

Only in America in the age of hedge fund computer algorithms could we get an upside reaction in stocks and a downside reaction in gold on news that the US could get the greenlight to plunge itself ever deeper into a morass of indebtedness as its financial condition further deteriorates and works closer to looking more and more like that of a banana republic.

Apparently in this brave new age of unlimited indebtedness, safe havens are only needed when it appears as if a country might actually attempt to hold the line on its spending problems and work towards balancing its budget like the rest of us ignorant clods who still attempt to run our family budgets in a responsible manner. Excuse me for not becoming part of the cheerleading crowd who equate more indebtedness with a good thing.

"The borrower becomes the lender's slave" was written by someone far wiser than the current group of debt-addicted politicians who are sending this nation down the roads towards financial oblivion.''

Either way, gold, after staging a titanic struggle revolving around the $1600 level, was knocked lower once that news story broke which gave the day's victory to the bears who managed to keep the metal from holding firm above $1600. Solid Asian-based buying last evening had pushed it further to the upside from yesterday's pit session close in New York and set the stage for the push above $1600 so we will have to see if those buyers come back in this evening. It does appear that as I write this commentary, buyers have appeared in the $1580's again.

More to come later if time permits...

The Dollar has gotten trashed today as it broke below 75 and then continued to plummet right through a critical support level at 74.50 without even a pause. It's weakness is providing even more volatility to an already volatile trading session as the algorithms generate buying across the commodity complex when the Dollar is weaker and risk trades are back on. That is what has pushed crude oil back to the $100 level again for WTI. However, several of the commodity markets are currently experiencing some bearish fundamental factors which is setting up some wild price swings across the sector in general as some of the algos buy while commercial accounts are providing the selling.

Remember that insanely weird 1 1/2 point rally in the long bond that I commented upon the other day? It never happened! Yep, bonds have erased the totality of those gains and have dropped as low as a full point in today's session. I am of the opinion that the best thing traders can do in these volatile market conditions is to sleep in late and upon waking, indulge heavily in video games. If you miss a couple of trading sessions, not to worry, as prices will eventually go right back to where they were before you took your extended nap. Madness, insanity and idiocy are too mild of a choice of words to describe what our financial markets are being reduced to by these damn computer algorithms.