Knock, Knock, Knocking on Heaven's Door.....

It tried, it mustered all it's strength, but like a horny guy trying to get with a hot blond, gold just couldn't get past $900, hitting $900.10 and backing off. It turned out that $900 was nothing more than a CT!! After flirting with the magical number for a while, gold backed down to as low as $896 and tried a few more attempts but ended the day at $898. Oh well, there is always next week, hopefully.

I dunno, on Friday, the financial stocks were very strong as it was indicated that some this county's former stalwarts of economic strength, such as Citibank, Merrill Lynch, and Bear Stearns, have to go hat in hand to the Asian and Arab countries looking for yet another handout. Is it a positive that blue chip companies have to sell themselves like a $2.00 hooker to stay financially viable? One of the reasons why gold can hit $900, is the suprime mess and corresponding derivative problem, coupled with collapse of the banks.

Gold, on Friday, still acted like a toddler out of pullups, it was unaffected by the weakness in crude (somewhat) and a flattish dollar. As usual, this is good to see. What is starting to annoy me though, is gold failing to hold it's Asian gains getting slapped down in Europe on a nightly basis. The latest slap down started around 6am EST when gold was trading towards $900. This is a common theme and is starting to piss me off.

On the heels of the wildly successful video series "Girls Gone Wild" I am going to produce a series titled "Grains Gone Wild." Yesterday, several grains opened limit up, including wheat and corn. What that means is they opened the most they could up in a single day. This is yet another example of inflation that the world is facing and another brick in gold's foundation.

Last night on Fast Money, my boy, Guy Adami started his speech on gold saying "I apologize, I have been dead wrong on gold for the last $100." That was a good start. However, he then added, "but folks, take a look at this chart, gold has done nothing but gone straight up, I have seen how this movie ends. Right now, the miners are taking their hedges off, but I guarantee you they will be putting these hedges back on $200 lower. Trust me, I USED TO TRADE GOLD FOR 15 YEARS." (I am basically paraphrasing here, you get the drift.)

As a former trader, he just doesn't get it. This is not gold in 1980 off of a parabolic spike. This is gold in 2008, where, after 6 years of a bull market, the perfect storm still exists for gold to go much, much higher. At last look, Bernanke is still going to cut rates dramatically, inflation is increasing, and the housing and derivative situation is still with us.

Look, folks, gold is gonna correct at some point. It has to, nothing goes straight up. And knowing gold, it is going to be a violent correction. The type where it makes the gold bugs think the move is over, including me. It will make us hate, and I mean HATE being in gold. But that is business as usual in the gold market. However, the last correction in the gold market was more a kinder, gentle correction. It went from roughly $840 to $800 and only lasted a couple of weeks. If this is the type of correction we can look forward too, then it won't be so bad. Just, when the correction hits, I don't want to hear Adami patting himself on the back.

I don't mean to keep picking on Adami, but he is typical of a lot of people who keep calling for gold's demise and who are constantly wrong. You know the type, those who keep hailing for gold to come down, and when it does, they proudly and arrogantly say, "I told you so!" If Adami, listed his reasons as to why gold would fall and even say: "Look folks, gold has had a tremendous run here, I would take some money off the table and look to re-enter at lower prices," I would be fine with that. Hell, if he even said that gold should be sold now and never go back into that, and listed valid reasons, I would still be ok with that as you must always respect but not agree with an opinion that is based in someones logic. But just to say, I have been a trader for 15 years, sell now, I know how this ends, is the height of arrogance.

Oh yeah, Adami's pick from Thursday, Blue Nile, was off $5.71 or just a little more than 9%. Funny, but no mention of that last night.

The stock market is in huge trouble. Yesterday, one of the areas considered as safe, the consumer staple stocks got slammed. Stocks, like Proctor and Gamble, Clorox, Coke and Unilever, which are viewed as recession proof as people will still need those products, were down across the board, as it starting to dawn on the market that consumer spending is slowing at a dramatic pace. Also, tech continues to be drek, as consumers as well as businesses, don't buy technology in a recession. In light of this, the gold stocks held their own. NEM, ABX, GOLD and a couple of other gold stocks are either at or near their 52 week highs. That being said, the stocks are lagging the metal, and that sometimes means a correction is in store.

One stock that did not participate in the reindeer games was AEM, which was down .40, still stinging form an intra-day downgrade from Merrill Lynch on Thursday. Later this weekend I will have a piece why this downgrade was a complete joke, and why Wall Street is trash.

So, where to from here? I dunno. I kinda remember that gold sliced right through $800 and ran to $847. But I also seem to remember that gold kinda fiddled right below $800 before it broke through. So, I guess it's safe to say, if gold breaks $900 it's off to the races, and if it can't, well it will go lower for a bit.