Roebear re: "Goldbulls running"
...I think this move off of worries of a miners strike in So Africa - is an opp forboth Bulls & Bears.... bulls to take profits into & Bears to short into.
Only time will tell.
I said long ago in reference to trading the the initial couple of pullbacks in this cycle....that doing so; would allow one to sit back and avoid the "when, not if" eventual trap door-rollover; which is how most commodity sector cycles end; or to be in the cat-bird seat to jump back in long on momenteum when, or if...the fundamental catalysts support the sector moving to "significant" new highs.
Imho; the High Reward/Low Risk or "Big & Easy Money" portion of this cycle has passed...and the High Risk/Low Reward portion of this cycle is here at hand.
Primarially imho; because many of the prior positive underlying catalysts for longterm/sustained, higher gold/goldstocks have dramatically disapated:
1. War/Terrorism Risk
2. Risk of freefall in the USD
3. Continuation, or even acceleration of the US Recession
4. Continuation of, or new lows in the Stock Market Bear
...inflation fears & now - the potential of a miners strike in South Africa are the catalysts propelling Goldstocks to new highs presently.
- I think inflation worries are fairly, if not even fully priced in here and run-away inflation fears are somewhat misguided here.
- I also think that the South African Miners strike is a "temporary" short-term catalyst and imho; 90% of all "short-term" catalysts should be sold into - either taking profits and/or going short....especially given the collapse of the above, prior positive catalysts for higher gold/goldstocks.
The economy has & is showing signs of responding to excess capacity being worked off, of having reckless credit expansion reigned in, of debts loads being reduced, of valuations in the broad market being reigned in and we're seeing captial goods spending increase from corporate America; as well as the US consumer & the Housing Market holding steady....and employment looks promising as the last piece to fall in place of a US Recovery gaining traction every day.
...and that imho; is NOT an environment in which significant" higher "sustained" gold/goldstocks are going to be built upon.
As I said long ago.... let the Perma-Bulls have the tape between HUI 155 and 200.
Those 45 points (or, the bulk of it) were "banked" twice in much more favorable risk to reward environments; earlier in the cycle on major pullbacks in the HUI.
I'd prefer to patiently wait to either:
1. Short into the rollover/profit taking anytime here - or,
2. Buy into positive momenteum - but, ONLY; when AND if... those above 4; prior positive catalysts for higher gold/goldstocks turn positive once again - ie: continuation of/new lows for the falling USD, return/revenge of the BEAR - with new lows in the broad market, return of War/Terrorism Risk and reversal of the upturn now seen in the US economy).
Without 3 of those 4 turning positive... I do not think inflation worries alone... will take Goldstocks significantly higher...and the threat, or even the reality of a So African Miners strike is a profit taking/shorting event.
...we shall see.
Again... HUI 155-200 does not attract me on a risk to reward basis; given those who were portfolio weighted to the sector early on and who traded accurately on the prior early-cycle retracements...already have a move to HUI 200 covered....and 4 of the 5 prior positive catalysts for sustained higher goldstocks have now turned negative.
...simply not enough reality to "run away" inflation risk here to attract me long.
I'm still patiently watching OBV/Money Flows and the tape here ....waiting to throw some shorts & puts on the fire.
The positive for the permabulls here is higher lows on the 2 most recent pullbacks; as well as new highs here - although it's less than 10%.
I wouldn't rule out a move to HUI 172-180 here as a final top if the So African Miners do go on strike...and sans a reversal in those aforementioned 4 catalysts - that's a no-brainer 50 point short; in a straightline back to the 130's - 140's...in what will be a High Reward/Low-Moderate risk - Short Trade imo. |
