* What a difference two days make! Two days ago I recorded my podcast, "Goldman Sachs Sacks Gold", and that was because Goldman Sachs' comments about shorting gold were partially responsible for the severity of the drop in gold over the holiday weekend

* Today, gold is fighting back, at one gold was up better than $30, although as I record this the price has pulled back a bit, still above $1230 - up about $22 on the day

* Gold stocks, the GDX index I mentioned in my last podcast, was up 6% on the day, the biggest move up of the year

* That index has recovered everything it lost on Tuesday

* GDX would have been up a lot more, except that Newmont Mining came out with lower than expected earnings for the 4th quarter; so that stock was only up about 1% after dropping  7% in the first hour of trading

* Several gold stocks made new 52-week highs today and several others are at the highest point of this calendar year

* A very strong day for gold and gold stocks just a couple of days after Goldman Sachs recommended selling the metal short

* People would have been much better off shorting Goldman Sachs

* One of the other catalysts for the rise in the price of gold may well have been the comments made overnight by Jim Bullard, president of the Federal Reserve Bank of St. Louis

* After I read his comments, I expected the price of gold to rally right away, but it didn't begin until later this morning

* Bullard was one of the real Hawks on the Fed, he wanted to raise rates much earlier, citing concern about a stock market bubble

* Talk about closing the barn door after the horses have left!  They have left the stables, the property, they're barely on the planet!

* His comments last night about why the Fed should slow down the rate hikes are ironic, because his reason is the volatility in the stock market

* Let me get this straight: He wants to raise rates because we don't want a stock market bubble;

* They raise rates, the bubble is deflating and he wants to stop the rate cuts

* You can't have it both ways.

* Do you want to use monetary policy to prop up the stock market or not?

* Bullard has not turned dove, do who's left? The FOMC minutes came out Wednesday and they showed that only a couple of governors did not show concern over the weakness in the stock market

* What really should get the Fed governors nervous is the economy

* Today we got the Leading Economic Indicators and last month they were down, in fast the original estimate for December was-.2 - instead, it was revised to -.3

* January is now -.2, so that is the second consecutive month of declining Leading Economic Indicators

* That has not happened since August and September of 2011

* Here's the interesting part: QE2 ended in June of that year, so 2 months after the end of QE2, the economic indicators flashed recession

* What did the Fed do? In September of 2011, the second month of the back-to-back declines in LEI, the Fed launched Operation Twist

* That's what happening now, they just raised interest rates, we got back-to-back declines in LEI, what's the Fed going to do? They are going to come back and save the market

* We got more bad economic news today; the Philly Fed, this is the 6th consecutive monthly decline

* January was down 3.5%; February was down 2.8%

* They were expecting -2.5%, so we got a bigger decline than expected

* We got weak news on the housing market; housing starts dropping to a 3-month low, much lower than the 1.175M - instead we got 1.099M

* Permits were also light; they were looking for 1.334M and we got 1.202M on starts

* I think we are just getting started when it comes to the fallout in the housing market

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