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Gold sentiment has certainly turned around in recent weeks. The market had been very bearish, but that was before gold rose more than 20 percent from its lows—a development that had bulls chirping that gold's "bull market" is back.
But as we see gold futures oscillate around $1,400, gold now resembles Humpty Dumpty—and it is imperative that it lands on the right side of this psychological "wall" in order to maintain momentum.
The Syrian situation should prove supportive of gold, but only because the idea that gold is a safe haven has regained traction among investors.
Gold bulls shouldn't get too confident, because gold could lose that "flight to quality" feeling again.
(Read more: Gold will face a rocky week; here's why)
What would it be like to get one of the market's most famous contrarians on the therapist's couch? Viewers found out on Tuesday's "Futures Now," when host Jackie DeAngelis played the classic word association game with Dr. Doom himself, Marc Faber.
The game itself is simple. When presented with a word, the participant responds with the first word that comes to his head. It's thought to provide insight into the subconscious associations that people make, but it can also be a great deal of fun.
(Read more: Here's what Marc Faber likes more than gold)
Here, then, are the terms Marc Faber was provided with—and his responses.
If you want to hear a rosy view on the market, you'd better not listen to Marc Faber.
The editor and publisher of the Gloom, Boom & Doom Report has long held that a correction was coming—and even though that thesis has not exactly played out this year, he's standing by it.
"In my view, we'll go back to the lows in November 2012—around 1,343" in the S&P 500, Faber said. Overall, he considers U.S. equities a "better sell than a buy."
On Tuesday's "Futures Now," he provided three three main reasons for his bearish view.
Reason one: The U.S. will follow emerging markets down
It hasn't been an easy summer for emerging markets. In the period of a month and a half, the iShares MSCI Emerging Markets ETF (which tracks emerging markets' large- and mid-cap stocks) lost nearly 20 percent of its value and has hardly bounced back from the lows.
That has made the U.S. market an outperformer, but Faber believes it cannot last. In fact, he said, U.S. equities could be hurt by their relative costliness.
"When emerging markets go down and the S&P goes up, the asset allocators say, 'Do I want to buy the S&P near a high, or do I venture back into emerging economies that are down 50 percent from their highs, like India or Brazil and so forth?' So you understand that the pool of money can flow back into emerging markets," Faber said.
Marc Faber has been a gold bull for a long time. In January, he told Maria Bartiromo that she was "in great danger" because she didn't own any gold, and on Aug. 8 he argued that "gold is relatively cheap."
With the metal up some 20 percent from its June low, however, the editor and publisher of the Gloom, Boom & Doom Report is changing his tune.
"The sentiment on gold has recovered," Faber said on Tuesday's "Futures Now" show. "It is relatively bullish."
After all, "we had a big rally in gold already," he said. "I think we will ease back a little bit."
(Read more: Gold will face a rocky week; Here's why)
Instead of gold, Faber recommends considering another classic safe haven: Treasurys.
"I think the sentiment is incredibly bearish about Treasury bonds and Treasury notes," he said. If the market drops, "people will again fear deflation, and they will move into 10-year Treasury notes."
(Read more: Marc Faber: Look out! A 1987-style crash is coming)
With the Syria situation still up in the air, the sloshing in oil will persist.
We have seen a $4 range in the Tuesday morning session, as oil continues to be ubersensitive to the Syrian news that drips out every few hours.
President Barack Obama has required congressional authorization in order to proceed with an attack, and that has certainly increased the volatility in the market, as it has added another catalyst to an already unsteady situation. Indeed, there is still little clarity regarding what the regional or global response would be to a limited U.S. attack, or a "slap on the wrist."
Russia reported overnight that ballistic missiles were fired in the Mediterranean, which led to some concerns that a strike on Syria could be getting underway. These launches turned out to be Israeli missile tests, but the bottom line is that until the Syrian sideshow is behind us, we can expect continued volatility.
(Read more: Russia raises alarm over Israeli missile test)
Gold found itself sliding into the open on Sunday night of the holiday session, reaching a low of $1,373.60. The market stabilized quickly, and hugged the $1,391.80 lows from Friday for most of this long session.
Syria is the biggest story for the markets right now, and America's good cop/bad cop routine leaves gold searching for direction. In an environment like this, it is critical to keep an eye—or two—on the levels.
Gold was able to hold $1,401 through several tests Thursday, then traders pressed the market to an initial low of $1,392.50 early Friday morning. We found gold hugging our $1,395.20 level for most of the morning, before better-than expected final reading from the Michigan Consumer Confidence report dropped the market down to $1,391.80.
We have seen a "buy the rumor, sell the fact" mentality take over the gold market following Secretary of State John Kerry's dramatic speech Monday, and after a great deal of hustle-and-bustle, gold now finds itself back where it closed out last week.
(Read more: With Syria strike looming, you need to own gold)
Major support will come in at our $1,383 to $1,384.10 level, and a close below that will be bearish. In fact, it would likely signal a consolidation to the next major support level at $1,352, as we head into the all-important September Federal Open Market Committee meeting.
One thing is becoming clear at the end of August: The summer doldrums are over, and volatility is increasing big time.
It's not only the situation in Syria that is causing the increase in volatility. Congress is coming back, and that means the debate over the debt ceiling will heat up. Treasury Secretary Jack Lew said that if Congress doesn't act, the U.S. will reach the debt limit in mid-October. He then told CNBC that President Barack Obama will not negotiate over the debt limit.
(Read more: Lew: Obama not negotiating over debt limit)
But Republicans are already drawing a line in the sand. Some, like Sen. Ted Cruz of Texas, have said that they are willing to see a government shutdown unless Obamacare is defunded.
There is always a lot of big talk ahead of these increasingly common Washington crises, but the problem is, the market listens to it. So over the next few months, expect larger swings in the markets, and don't be surprised if the direction becomes increasingly hard to gauge.
So what does this all mean for traders and investors? My advice is three-fold.
Bond investors are sweating bullets. In 3½ months, the 10-year yield has risen from about 1.6 percent to over 2.9 percent, before cooling off in recent days. And on Thursday, bond expert Jeffrey Gundlach made the case that the 10-year yield could reach 3.1 percent by end of the year.
(Read more: Gundlach: This market is just 'fear and loathing')
As yields rise, bond prices fall, so the move in yields has been very painful for those who have owned bonds, and investors are heading for the exits. Bond funds saw outflows of $36.5 billion in the first 22 days of August, according to TrimTabs. Bond giant Pimco saw $7.4 billion worth of outflows in July alone, and double that in June.
(Read more: Pimco: Media to blame for huge bond market exodus)
But Tony Crecenzi, Pimco executive vice president, market strategist and portfolio manager, believes that the bearishness has gotten overdone. On CNBC's "Futures Now" on Thursday, he made the case that "yields will move lower from here," and he provided three reasons why.
1: Economic fundamentals don't support these yields
Crescenzi said that yields could rise a bit more due to technical reasons, but the fundamentals don't support it.
After all, "what's priced into the bond market is the idea that the economy, in 2014, will accelerate," Crescenzi said.
But he throws cold water on the rosy economic picture that some are drawing. "Bond investors will begin to reassess whether or not the optimistic forecasts, including the Fed's own forecast, will come true."
Indeed, many have questioned the accuracy of the Federal Reserve's forecast for 3 to 3.5 percent GDP growth in 2014. On Tuesday, Krishna Memani, OppenheimerFunds' chief investment officer of fixed income, said on "Futures Now": "The economic growth that we're looking for in the Fed's forecasts is probably a bit overstated," and for that reason, he, too, sees rates dropping.
While some people follow popular opinion, others wait for popular opinion to come to them. Peter Schiff is certainly in the latter camp.
As the market continues to find its way around obstacles large and small, the CEO of Euro Pacific Capital continues to predict a wave of oncoming crises.
"It's a monetary problem we have. We have a dollar crisis coming, a bond market collapse coming," Schiff said on Thursday's "Futures Now."
He believes that debt will force the U.S. to print a great deal of money, causing a nightmare scenario for the U.S. dollar and the bond market. That's why he advises getting into gold.
After all, if the government prints more money, then the value of each dollar will drop. That means that it will take more of those dollars to buy a single bar of gold.
So with bond and dollar crises looming, "Gold is going to be a safe haven for all of that," Schiff said. "The fundamentals are fantastic."
(Read more: With Syria strike looming, you need to own gold)
Indeed, Schiff believes it will get so bad that he calls government seizure of gold "a possibility," even if not a terribly likely one.
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