Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: rolatzi who wrote (48560)	4/14/2004 9:10:32 AM
From: macavity	Read Replies (1) of 74559

Gold. Until any COT in the cyclical timeframe is confirmed we may just get oversold on IT charts which would be a possibly buying opportunity. I think it is too early to be bearish Gold but there are multiple signs that we may have seen a major euphoric top. 1) Stocks failed to confirm 2004 high of Metals. Gold Stocks vs Gold and Silver Stocks vs Silver. 2) Momentum Divergence in POG top 3) Silver was basically a parabolic move. The cyclical bull is in jeopardy if Quarterly Charts turn down and 55wk EMAs break. The secular bull if Yearly Charts turn down and 55mth EMAs. These are 'miles' away, so we could go sideways for 12-18m or so with no real problem. Bonds are getting whipped, but until I see new highs in Yearly charts ($TYX>5.50%), I will continue to believe that the Secular Bond Bull is still on and that we are witnessing the subsequent disinflation/deflation. For me to believe in a new economic recovery I need to see both stocks and yields rally together - they have been (sort of) since Mar03 - and Gold fall. If Bond Yields rise, Stocks rise and Gold Falls then it is a firm (self-sustaining) economic recovery. At the moment (on the Intermediate timeframe) it would appear that stocks are not playing their part in this scenario quite yet, but this could change. Quarterly Charts Yields UP Stocks UP Gold/Commodities UP => Cyclical Inflationary Economic Recovery Quarterly Charts Yields UP Stocks UP Gold/Commodities DOWN => Cyclical non-Inflationary Economic Recovery Monthly charts on Bond yields do look as if we have seen a higher low, but I am sticking to my disinflation/deflationary views for now. We have been caught in the Q3-2003 trading range Oh, I have no positions so it is a pleasant luxury for now. -macavity

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