Michael, agreed on all of it, we are coming off a great depression low in commodities, got hot economies with everyone driving gas guzzling SUV's and everybody is talking low inflation STILL as oil is trying to take out 30 bucks.
As i posted several months ago, i believe that the great depression in the oil market brought together squabbling brothers into an opec resolve not seen in 30 years, also now that these oil producing economies are fairing better they don't need to dump oil.
The gold market supply/demand equation is starting to reverse and the mega short position provides a bundle of liquidity should a rally ensue.
As i posted from my gold stock technician newsletter, the super long trin hit oversold 1.5 at the late jan bottom, the two last times it crossed the oversold trin level of 1.5 was at the august 98 washout low of 48 and the bottom of the central bank selling frenzy in december 97.
These were both in bear market conditions with the 200 dma going down and many internals not showing great divergence they are now, actually there was a lot of divergence at the 48 low, but it only arrested the downtrend and turned it into a trading range.
Now we have the third peak, right shoulder in place from the 48 head bottom, a point were XAU traders threw in the towel as much as at the 48 low and the 12/97 low, but with a back drop of improving internals and improving fundamentals.
This is the stuff great market turns are made of, when everybody is leaning in one direction, thrown in the towel and fundamentals have improved dramatically, and people are caught in the Pavlovian response.
kind of like 1982 in the equities.
b |
