Check out the chart below and see if you can figure out what it is:Can't guess? It's a flipped chart of gold. Notice the clear parabolic action in the past few months. Today we got a panic $60 selloff in gold (rally in this chart). Either we get one more panic buying spree in gold to complete the parabola, or start a sharp downtrend. Regardless of the short term action, I think gold's days are numbered. I think we may be witnessing an irregular ABC flat correction, where Wave-B goes higher than the previous peak. In this case, we will see an extremely sharp counter-move which should break below the Wave-A low. I could see a drop to 600 in gold. This would be excellent to destroy the bullish sentiment that has developed on metals.
Another reason why I'm bearish on gold is that many of the mining stocks are looking ultra-bearish. Take a look at ABX above. Even in the midst of nearly-1200 gold, ABX couldn't make a new high. Furthermore, it has carved out an extremely bearish ending-diagonal pattern. This foreshadows a drop to at least $25, but I would not be surprised to see a drop to $15.