It was Sunday and it was hot here in Phoenix today, so the kids and I were at Dairy Queen for a snack. I had my usual cherry ‘Arctic Rush’ (slurpee) and proceeded to drink it too fast. Of course I got a headrush followed by a headache.

Last Thursday, the financial markets got ‘The Splurge ‘. I think we should call it the ‘SPLURGEE’ because after the immediate thrill, a massive financial headache will ensue.

I participated in a panel this Saturday in Las Vegas organized by Barry Graubart . As usual, everyone was better prepared and smarter than me, so it made the whole trip worthwhile.

My friend Paul Kedrosky who posts more than GOD would if he had a blog (I think he posted 6 times during the session and I never saw his fingers move) had a lot to say about the financial mugging taking place by our government. Most importantly is that he believes this bailout will be in the $2 trillion range. The other panelists agreed. I guess last week’s government consensus was $700 billion.

One thing is for freaking sure from the ‘Splurgee’, the dollar will return to massive lows at some point in the next year and gold will have some kind of super spike. We already got a $140 spike last week.

Trading market spikes is extremely difficult. When prices spike, all models get thrown out the window. Winners become losers and losers become winners. I always stand aside immediately after the big spikes. It is important to see how the prices react in the next few weeks.

I am eyeing gold and gold stocks still. The metal stocks are still annihalated so if you believe that Gold will hold the recent spike, the stocks should continue to play catch up.

I am also eyeing the new all-time high lists. The ‘Splurgee’ is a MAJOR, MAJOR event and even if it does not save the markets, it will set off some monumental trends in the market. If you focus on strength the next month and not the headlines you will catch some massive winners of the next cycle.

That cycle started Thursday.