As we position ourselves and wait for the coming breakout in gold stocks I read the following today on the Internet:

Ike Iossif of Marketviews.tv wrote a subscribers only report about gold stocks on Monday. I just want to quote one paragraph from it, because you should go to his site to read the entire thing:

"Last but not least, SEASONALITY strongly favors gold/gold stocks. Historically, September has been one of the best months for gold/gold stocks. Take a look at the chart below, notice that for the past 5 consecutive years the price action in gold/gold stocks has been characterized by a modest rise during the first half of August, followed by a shallow decline lasting until the end of the month, which in turn is followed by a robust rally that starts during the first 5 trading days in September, it lasts thru out the entire month, and its magnitude is between 20%-30%! If seasonality plays out this year as it has in the past, the XAU has the potential to rally to the 172-175 level in just four weeks time."

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To access today's pre-market comments on the market with an in depth analysis of the gold market click here: WSW Power Investor Pre-Market Comments for 8/23/06

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From Fallstreet.com:

"August 3, 2006
$608 Billion Went In. How Much Will Come Out?

A potentially ominous report crossed the wires last week and barely anyone noticed:

“Stock funds posted an outflow of $8.40 billion in June�.

With hedge funds taking more control of the daily volume, oil near record highs, and war raging in the Middle East, you can’t blame the average investor for not paying attention to dated statistics from the Investment Company Institute. However, remember that the average investor - who spent the year 2000 waiting for tech stocks to bottom - is usually focused on the wrong things. Now, repeat after me: “Stock funds posted an outflow of $8.40 billion in June�

Fund Flows Can Highlight Larger Themes

That for the first time since March 2003 investors pulled money out of equity funds may not seem that big of a deal. After all, money previously shifted out of domestic (US) stock funds in December, October, September, and August 2005 in favor of world equity funds and the markets were not impacted in a negative way.

Nevertheless, the key difference between last year’s domestic outflows and June 2006 is that fund money didn’t simply rotate to different areas of the marketplace in June -- it was taken out of the equity game completely.

Historically speaking mutual fund redemptions are rare and they are nearly always a symptom of a broader stock market malaise. Accordingly, the risk today is that a couple months of redemptions could be foreshadowing a lasting shift in investor sentiment/risk tolerances.

From April 2003 to May 2006 $608 billion moved into stock funds. During the same time taxable money market funds posted a net decline in assets of $136 billion. In other words, $136 billion of ‘sidelined’ money has moved into stocks since April 2003 and $471 billion of new money has entered the equity scene.

Using estimates from Trimtabs, more than $14 billion left stock funds in June and July and, according to ICI, taxable money market funds attracted $27 billion in June alone. Not exactly a shocker, new money has been stepping into cash as opposed to stocks since June.

Focusing on the flows and an expected slow down in the US economy, it is increasingly likely that the April 2003-May 2006 period will go down in history as the boom. This means that we have now entered the bust. -$14 billion...and counting."

-And from USA Today:

"An Aug. 7-10 Gallup Poll found only 22% of Americans think the economy is getting better, the lowest confidence level in five years. Recent surveys by Moody's Economy.com and the National Federation of Independent Business indicate executives of both large and small firms generally foresee sustained, though somewhat more muted, growth. Declining confidence is most pronounced in U.S. construction and real estate firms."

Fact - Home sales in the US are down 7% annually so far this year with sales in the west coast falling -14.7%

George Bush Press Conference on Iraq

That's some food for thought today.

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To access today's pre-market comments on the market with an in depth analysis of the gold market click here: WSW Power Investor Pre-Market Comments for 8/23/06

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