Fear and risk aversion have swept through the markets again and silver looks weak while gold is stable, but not as strong as it should be with a declining dollar.

Maybe equities will bounce this week, but the end of QE2 is being absorbed along with the poor economic data out of the US. Friday’s NFP was disappointing, as everyone anticipated. Equities are oversold and oil came down hard. Silver reacted as an industrial commodity and is weak in the face of a falling dollar. So the prognosis is not bullish. In fact, we may get a crash developing before end of June when QE2 ends. The markets seem to be facing up to a failed recovery and the strong likelihood of a double dip - until another dose of QE is announced. The market is like a drug addict at this point.

On the other hand, there could be a bounce. But the momentum is down now. If equities exceed the March tsunami low, they are on their way to a distant bottom. They might bounce right here but be cautious. The dollar is fast approaching its March 08 low and may reverse there.