praha4 re: gold putting in a bottom.
This is THE cognescenti's gold stock:
And this is THE Institutional Fav' that MUST lead:
Neither give cause for writing home to momma, or
waving pom-poms.
Gold is at a crossroads people.
It's not about predicting each and every turn.
It's about recognizing a discrepancy between
price and risk when you seen one...regardless,
of whether the trade is long, or short.
Remember back in April & May 2005 when Hulberts digest
recorded the lowest sentiment amongst gold bugs ever
recorded?
You couldn't get a pulse on a card-carrying gold bug.
Some of us...couldn't have been more bullish -- just
when YOU were most bearish.
And this May...once again.
YOU couldn't have been more bullish and some of us...
couldn't have been more bearish.
Presently, gold is trailing the broad market...and
trailing badly.
Gold bugs just "HELD TIGHT" thru the equivalent of a
3,559 point DOW collapse.
Imagine the Dow collapsing from say 11,700 to 8,141.
Well that's just what happened to gold bugs.
The crossroads for Gold Bugs is this:
Virtually all of the catalysts that WERE driving gold
higher...have reversed.
Historically, especially for Institutional Investors,
Pension Funds, Insurance Companies etc, Gold has been
over-weighted due to it's negative coorelation to the broad
market...during turbulent times.
Unfortunately -- the DOW is now at an all-time high.
The 2nd reasons Gold is held, or over-weighted; is for
it's negative coorelation to a falling US Dollar.
Unfortunately -- the US Dollar has rallied to 10 month highs.
Then there's the Oil:Gold ratio...
Not good, since Oil has collapsed.
Deficits...are falling.
US deficits are still below most G-7 Nations as a % of GDP.
Tax Receipts are rising in the U.S.
Paulson is making headway where Snow never did.
The House now stands a 70% chance of falling to the Dem's.
Given all of that... why would 'bugs be calling a bottom?
Especially given this chart?
The mass speculation began with all the hype over
Hurricane's Katrina & Rita.
Bug's worst nightmare is a "causation" correction...
returning to pre-Katrina levels for Gold.
If I could give you one tip it would be this:
"Keep your friends close -- but, your enemies closer."
Know the other side of the trade -- as well as your
opponent does.
ie: Permabulls keep trumpeting how the CB's didn't sell
their full quota's of gold.
-- Remember, there's a flip side to that.
Central Banks had no trouble dumping gold at $300 per oz.
You all said Central Banks conspired to keep gold down then.
Do you think they have less, or more reasons to do so now?
Sinclair & Company keep yammering about Helicopter Ben.
Well Helicopter Ben inherited Greenspans mess.
And Helicopter Ben may have a few surprises up his sleeve.
Remember this from Don Coxe?
With gold soaring through $700, Barron's responded to the outbreak of gold
and inflation fever by running an interview with a self-professed gold
expert, who projected gold could run to $8,000 an ounce. Day after day, the
media informed us that gold was at its highest price in more than 25 years.
Inflation was obviously back on Page One.
Neither the interviewer nor the gold bug knew that Governor Toshihiko
Fukui and friends had already unleashed their attacks on the inflation virus.
$175 billion worth of paper money was being vaporized.
Never under-estimate your opponnent...especially when they
both have the ball...and make the rules....and remember that
word -- "vaporized".
good night,
SOTB |
