I think the positions in GOD need to be in place BEFORE the war. Here's my theory on why.
This is a very important article to read as far as understanding the price action right now in energy: also applies to gold.
Technical Traders Sell Oil Futures, Betting on Repeat of 1991
quote.bloomberg.com
It's a clear presentation of Bill Fleckenstein's points that "participants are using the old playbook", or fighting the last war.
Message 18695287
What's even more amazing is that the "historical playbook technical types" are now selling (shorting?) in advance of a war. The oil and gold stock players have unloaded BEFORE a war (especially this week), not after. The reasons the techies are wrong is clearly and correctly stated (little oil and gas, the no manna from heaven counterpoint)in the article.
Also take note of the big propaganda and media blitz leading up to the war and deconstruction of the so called "war trade" (*). The kick ass, this will be a cakewalk guys are trotted out. Stories circulate that 200 special ops guys conquered Afghanistan, and that Iraqi generals are arranging Baskin Robbins get-a-number surrenders right now from their cell phones. Now I don't underestimate US military prowess whatsoever, but a free ride? Yeah, whatever.
(*) The war trade holds that energy and gold prices are largely or even totally derived from this war. It holds that there a few if any other factors dictating the pricing of gold or energy, and especially gold and energy shares, which are ignored or sold altogether. Issues such as how the US finances a $ half trillion trade deficit and half trillion or more combined federal, state and local budget deficits (when the total excess savings of the entire in many cases pissed off planet is less than $one trillion) are deemed irrelevant. Issues such as how natural gas storage gets rebuilt from shocking end of season levels (500 bcfs?), without serious overtime drilling are dismissed as secondary to the war. It assumes that tens of millions of barrels of oil inventory shortages are a function of the war exclusively, and that the war playbook says so. Since the true fundamentals are dismissed out of hand, the successful resolution of the war is considered to be the only consideration. The definition of "successful resolution" seems a bit vague too? This heavy betting on the 91 replay book is headed for a world of hurt when AFTER the war these traders realize there is no Santa Claus. The time to get into the countertrade (gold, oil/gas, and possibly even short QQQ's and financials) to this nonsense is BEFORE the war, not AFTER. They've now handed it over on an oily gold platter. |
