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Politics : Welcome to Slider's Dugout

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From: SliderOnTheBlack	8/8/2005 2:03:22 PM
	of 50693

Hi Nspolar... thanks for the EW Charts. Gold the metal is right at it's resistance line here and as I said earlier; Fund Managers are NOT going to take the HUI & Goldstocks to the same levels relative to the price of Gold - that they did earlier....as we have had a series of lower highs for BOTH Gold the Metal and the Gold Stocks. The HUI goldstocks are basing nicely here... but, in reality -in spite of all of the Pom-Pom Waving and premature celebratulation aside.... we are merely +1 Index point off of the prior high (now - 1) of this move up off of the bottom and we're only + 2% to 3% up off of the daily range that the HUI has traded in for 20+/- days out of the last 30-some Trading days. THAT IS NOTHING - to celebrate about..... yet. Gold STOCKS were extremely CHEAP relative to Gold the Metal during that bottom formation from HUI 165-175. THAT is NOT the case here at $430+ Gold and HUI 205. The divergence of value between the metal and the stocks - gave us a +40 Point index move in just 20 trading days. The last 8 weeks have given us - another 6 points from the earlier high and that window lasted a couple of hours...now we're right back to where we were earlier... only with MUCH MORE RISK...and where the Stocks are now NO LONGER CHEAP - relative to the Metal. ...I like Cheap and I like low Risk. THAT IS NOT...the environment we are now in... as both Gold and Goldstocks battle this resistance line. The Commercials have given Gold a SMACKDOWN every time it's hit the upperband of this trendline: stockcharts.com[d,a]daclynay[d20041201,20050808][pb10!b50!b200!f][iut!lj[$hui]][J56603508,Y]&listNum=2 And that is why the stocks have stalled here. RISK has risen exponentially and Reward has diminished proportionately. I think most savvy traders take their chips off the table when the Risk:Reward ratio's completely reverse. I'm watching Gold here... Gold relative to the CRB, to the US Dollar and very very importantly - Gold relative to other foreign currencies. Paul Van Eden spoke to that notion... here, vis a vis - "did Gold really rise in value" ? kitco.com It's all about Risk:Reward...convergence & divergence. I want to own and leverage stocks - when they are at extremely cheap valuations relative to the metal.... not vice versa. I want to be Portfolio Leveraged to + 40 Point Index Moves that occur in 20 trading days.... and not 7 week long narrow trading bands for the stocks when GOLD the Metal is right at it's SMACKDOWN line...and the stocks do nothing, but channel a narrow trading band. Let others take this exponential rise in RISK and cooresponding collapse in Reward, while the Market sorts out this resistance line for Gold. Either Gold penetrates resistance here and makes a concerted move on $443, $447 and $458... or the Commercials have yet another SMACKDOWN Blanket Party for Gold....and we know what's going to happen to the stocks - if/when that happens... PS: with Oil hitting new highs... and Gold not getting any "pin action" off of that move.... NOT a good thing. Fwiw: China Re-Peg of 2% isn't making Crude Oil any cheaper for them with Crude Oil Ramping... the "Economic WMD-screws" for a major Re-Peg and the ultimate End Game - of the toppling of the Chinese Government, are being turned ever tighter... Listen closely...and you can hear the "cracks" both here and there... a very dangerous game. Tic' Toc` Got Broad Market Puts ? ....better Risk:Reward on inflated broad market sectors and stocks now emerging... Slider

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