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Non-Tech : The Woodshed
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To: crustyoldprospector who wrote (5490)4/30/2004 12:00:32 AM
From: Little Joe  Read Replies (1) of 60909
 
Crusty:

I have gone over to the dark side and added to RYTPX. Rydex TempestFund inverse 2x S&P. Despite my distrust of government manipulation of the market, the weight of the technical evidence has in my opinion turned to the short side.

Also, when I look at the charts on gold and ignore the momentum indicators, it is difficult to see a significant rally there soon. Gold has just completed a major top which projects to the 340-350 area, so I can't see any real hope for PM's until this target is hit.

If you look at gold on the weekly its rsi is not that oversold nor has MACD bottomed out, so I think my downside objective could be reached, even though there is likely to be some rallies along the way.

We have seen what look like tops in most mining and commodity indexes.

Even the $xng is showing significant negative divergences.

stockcharts.com

Same with XOI.

stockcharts.com

Gold and commodities headed lower, the dollar as I have previously stated looks to be forming a bull flag. Bonds have obviously topped.

When you put it all together, the only scenario that makes sense to me is for gold to go lower and the market will go with it or vice/versa, if you prefer.

This analysis is borne out by the technical evidence so I am very confident that this is how it will play out. My suspicion is that the higher rates will eventually panic the markets and raise the specter of deflation and the spigots will open again and then gold becomes a buy.

Comments welcome.

Little joe
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