Earlier today we wrote that much depends on investors' expectations and the way their perceive the information that the Fed provides today.

We have the latest polls right now. Here's a very quick update on the above. There is a poll on finance.yahoo.com and the question is when people expect the tapering to be announced. The majority of respondents say that the Fed will announce the tapering no sooner than next year and only 12% of respondents think that it will be announced today. This means that, on average, people are expecting a continuation of QE as it is right now.

This means that if there is no tapering, then nothing significant will take place - investors will not be surprised. We might see a move up in stocks and commodities, but it would likely be small and each market would afterwards continue to move in tune with its trend (down in the case of the precious metals market).

If some form of tapering is indeed announced, then it will surprise investors and it could trigger a bigger decline - even if the tapering is not significant by itself. As we wrote previously, we might see tapering in the case of the mortgage based securities, which will not really mean a change in the Fed's approach - it's still likely to remain "easy as Sunday morning."

The implications of the above are bearish, because the more bullish scenario is only insignificantly bullish, and the bearish one is strongly bearish.

Overall, our outlook on the precious metals market remains unchanged, but we thought you might appreciate this additional information.

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As mentioned previously, "we might see a bounce when gold reaches its previous 2013 low, so we suggest closing the speculative short positions in both gold and mining stocks when gold moves close to this level (at $1,190), but not before that happens. We do not suggest making adjustments to the long-term investment capital when that happens."

To summarize:

Trading capital: Short position in gold (half), and mining stocks.

Long-term capital: No positions.

Stop-loss orders for the speculative short position:

• HUI Index: 214
• GDX ETF: $22.80
• Gold: $1,272

As always, we'll keep you - our subscribers - updated should our views on the market change. We will continue to send out Market Alerts on a daily basis (except when Premium Updates are posted) and we will send additional Market Alerts whenever appropriate.

The trading position presented above is the netted version of positions based on subjective signals from your Editor, and the automated tools (SP Indicators and the upcoming self-similarity-based tool). You will find more information by following links in the summary of the latest Premium Update.

As a reminder, Market Alerts are posted before or on each trading day (we usually post them before the opening bell, but we don't promise doing that each day). If there's anything urgent, we will send you an additional small alert before posting the main one.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA