@sentiment -- trotsky, 14:22:39 12/15/06 Fri
open XAU options going into this expiration are roughly even (p/c OI close to 1 in the three front months), so a definitive judgment on this part of the sentiment front can actually only be made in the coming few trading days when the Dec. series is off the board and more repositioning in the new front month takes place (usually the overall shape of the XAU p/c OI for a given month is put in place in the week after expiration).
@support levels -- trotsky, 14:08:07 12/15/06 Fri
the support levels i had previously had in mind for a turn were $620 for gold and 340 for the HUI - iow, today's breach of these near term supports is definitely worrisome. to keep any near term bullish hopes alive, we need a turn right here and now imo, to regain the above mentioned levels. slight breaches of support often turn out to have been meaningless in retrospect, but this is now the type of situation where it becomes important to mind stops on individual issues.
sentiment and money flow backdrop are only so-lala, nothing to support outright bullishness at the moment, so i fear we have more down coming. i originally thought upon breach of 640 that we would get to see 670 first, but obviously the market had other plans.
# @horror-show in silver -- trotsky, 13:46:42 12/15/06 Fri
that triangle on the hourly chart sure broke the wrong way big-time. unfortunately this has brought gold to what looks like a last-ditch short term support level as well. want to bet they'll hunt for the stops right underneath?
gold stocks still taking it in stride however - HUI has imo strong support all the way between 325-340.
@RBY -- trotsky, 12:55:16 12/15/06 Fri
the action in RBY today indicates that market participants as a whole must be a bunch of complete idiots. first the stock traded DOWN 20 cents on news that the stock distribution went into effect. that was in paragraph ONE of the news release.
NOW the stock is trading UP by 20 cents, as the attention span deficit disordered apparently deigned to read the second paragraph, where it was stated that the record date on AMEX would be a few days AFTER the TSX record date.
i hope some of you read the news release and took advantage. this was as close to free money as it ever gets in this market, LOL.
@uncanny power of Economist covers -- trotsky, 12:33:13 12/15/06 Fri
so far, the publication of the Economist issue that had the alarmist 'dollar to decline to zero' (or somesuch) cover on it pinpointed a low in the dollar with uncanny precision. it's of course a bit too early to say that this was a major low, but nobody should be surprised if it is.
mainstream publications such as the Economist or Business Week only ever make a financial trend into a cover story when that trend is either already over or about to end.
as an aside, the recent weakness in gold also seems to point to a dollar recovery short to medium term.
there is lots and lots of talk about an impending 'dollar crisis' (google the term and see how many hits you get), but what if a Euro crisis, or a Yen crisis hits first? Japan could easily suffer a fiscal crisis for instance, and that is unlikely to be good for the Yen.
why should either Euro or Yen be LESS susceptible to problems than the dollar? one thing is certain: the ECB has printed a lot more money than the Fed in recent years. otoh, Japan's CB has reduced its base money supply more sharply than ever before over the past year (this is a sword of Damocles that keeps hanging over financial assets all over the world).
imo the stage for a deflationary credit bust is set, and i wouldn't be too sure which one of the fiat currencies will come under pressure in this scenario. gold should actually decouple from the fiat monies longer term, but obviously, at present it is still exhibiting its traditional negative correlation with the US dollar.
@a hitherto suppressed document on Iraq -- trotsky, 11:43:35 12/15/06 Fri
by a UK foreign office bureaucrat proves that Blair and Bush knew BEFORE the invasion that Iraq had no WMDs (contrary to their lies both before and after). it was also made known to them beforehand that Iraq would fall into chaos (they can't use the 'stupidity' excuse iow. - as in 'we were too daft to realize what would happen').
this document (which the foreign office unsuccessfully tried to continue to suppress) is excellent evidence for impeachment proceedings: |
