Strictly: Drilling II Message Board

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Strategies & Market Trends : Strictly: Drilling II

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To: gold$10k who wrote (10473)	4/5/2002 2:23:38 PM
From: SliderOnTheBlack	Read Replies (2) of 36161

re: "I find it significant that it appeared at CNN's website. PMs are in the process of going mainstream." ...that is just part of the sentiment cycle & coming seminal shift out of paper assets. For this Gold cycle; the bottom is now in both technically, fundamentally and sentimentwise (ie: we no longer are being laughed at - for investing in goldstocks). The 2nd Phase is what we are now in and I refer to that as the "Recognition/Acknowledgement" Phase... ie: even our "chihuahua" friends from the Original SI SD can no longer deny the market leading returns of the HUI and PM stocks over the last 15-18 mos and the media is finally taking note as well. The Gold Stocks will trade just like the OSX did in the cycle from late 1998 to the final blow off top in May 2001. ...during the formation of the PM cycle bottom (and our arrival and the prescient call to shift from Black to Yellow Gold that "some" of us made in late 2000 (vbg) - we were chastised and ridiculed .... as one wants to be when one buys into the abyss of a cyclical bottom (the stocks are obviously cheapest when no one wants 'em)...and we got that same reaction in buying into the OSX stocks in the fall/winter of 1998. And now; the media has finally ACKNOWLEDGED that this move in the gold stocks was and is significant and they have just begun to RECOGNIZE that is not just a Sept 1999-esque anomaly move; but perhaps the beginning of a significant multi-year cyclical move (which it is). ...during this phase we see our critic's finally acquiesing to reality and acknowledging the move and also we have begun to see Gold & PM's reach the mainstream media - even some frontpage coverage on occassion. This was exactly what occured during the last OSX cycle. Interestingly enough - the near identical sub-cycle phases of the OSX will track numerically on a near identical index basis for this Gold Cycle on the XAU index imho(even though we follow the pureplay HUI stocks - I'll use the XAU for the example). OSX/XAU 45 to 72: ...this is/was the bottom and cooresponding cyclical turn up off the bottom. When the upper level of the OSX/XAU 65-72 range becomes support (as it is now for the XAU) then the institutional rotation & money flows start to arrive as earnings and fundamentals are finally acknowledged by the Street.... and that is what we are presently moving into in this Gold Cycle imo. OSX/XAU 72-100: ...this is the next phase we are about to enter; perhaps after another profit taking pullback/retest of XAU 65-68 here soon; then once we hold technically; the longerm sector rotation money will begin to flow in, as it did during the parallel OSX cycle and we'll ride a tide of positive fundamentals and technicals - where sector earnings and cash flow momenteum will push that inflow of institutional money. OSX/XAU 100 - 120: ...this is the upcycle move that will occur when both earnings and the price of gold make their next move and we begin to see some speculative traders and technicians enter the sector....this as well; is the end of the "Big & Easy Money" phase of the cycle. OSX/XAU 120+ ...the speculative blow off top. This phase will arrive when the hot money arrives, when the technicians & Street Analysts begin to pump the sector & point to the past returns of this cycle and when the sector is appearning on the business rag covers etc....how high it goes depends on whether we see the arrival of any "Rogue Wave" market events. I'd be a profit taker during this phase and just roll some partial profits into some outlying calls perhaps - just in case we see some "blue-sky" market-event crisis take us to never-never land again as we saw in 1980. The Gold stocks just as the Oil stocks did in the 1998-2001 Cycle - will ultimately deliver a index 2.5 to 3 bagger along with some small caps that will give us 7 to 10 bagger bragging rights. Patience is and will continue to pay off.... the rest of the ride is yet to come... enjoy it ~ PS: How about The Roach-man's comments below folks ? xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx ["Stephen Roach (New York) The global economy is caught in the crossfire of three powerful forces -- heightened geopolitical instability, mounting trade frictions, and the likelihood of a long overdue resolution of America’s current-account imbalance. Any one of these forces would be enough to destabilize the global economy and/or world financial markets. But taken together, the potentially lethal interplay between them could well turn any macro view of the world inside out. "] "any one of these forces would be enough"... ala Puplava's "ROGUE WAVE" thesis... there has NEVER been a period in recent history where more negative potential catalysts existed in a period of greater market intervention/manipulation & support.... and the most significant issue remains the looming Derivative Crisis that has yet to reach the mainstream media as a significant threat to the Market. Just in the last few years we've reached a level to where these Banks have derivatives exposure at multiples of their capitalization.... "Too Big to Fail and Too Big to Bail" *** [ remember those words ] *** JPM is bomb waiting to go off imho. The undwinding of the Gold Carry Trade alone nearly assures a multi-year Bull Cycle for Gold Stocks.... let a Rogue Wave hit the markets and what we saw for Gold & Silver in 1980 will seem tame in comparison. ...as they say; only time will tell; but of late we've added the likes of Bill Gross to the long line of cycnics and Roach as called a spade, a spade all along here and his words will be long remembered after this one plays out imho. As has been mentioned quite often of late; the "Bond guys" are 10 x as smart as the "Stock guys" and they "aint drinking Greenie's Kool-Aid" here fwiw... and it's becoming quite apparent that the emperor isn't wearing any clothes imo... Greenspan is lost and his failure to apply the brakes during the blow off top of this Bubble will preserve a legacy of infamy in market history before this all plays out. Greenspan and Rubin... 2 names that won't bring any fond memories in 20 years imo.

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