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How Big Can the Gold Bubble Really Get?

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OK, so we've got the "gold-to-go" ATM's on the way (in Vegas of course!), the A-Team movie (featuring a new Mr. T!) and gold beginning to garner an increasing share of headlines, what with hedge fund manager John Paulson parking 80 percent of his assets in the stuff. Look, it's even listed at the top of the Daily Feed page among the "Hot Tags." Even George Soros, who owns a considerable amount of gold himself, says it's a bubble. Everyone loves a good bubble. But so what! Bubbles are good (if you get out before they pop). What we want to know is how much more bubble is in the bubble?

Todd Harrison this morning presented a comparison chart showing past bubbles (Nasdaq, housing, China, crude) that provides a bit of visual perspective. Based on the chart below, the gold bubble may be in the second or third inning, not the ninth.

Of course, the chart also shows that even bubbles don't become bubbles in a straight line. There are plenty of scary drops along the way. And a handful of DeMark technical indicators I follow show gold is, at least for the time being, showing signs of exhaustion. The chart below shows a WEEKLY TD Sequential 13 sell signal occurring this week along with a sell setup.

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