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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives
SPY 677.56-2.0%4:00 PM EST
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To: GROUND ZERO™ who wrote (42203)12/20/2012 12:14:05 PM
From: Keith Feral  Read Replies (2) of 222099
 
Depends on the 10 year yields. There doesn't seem to be any correlation between GLD and the dollar at the moment, both have been getting their ass kicked the past several weeks.

I do think that GLD is strongly correlated to slow growth counter cyclical bearishness. The trade has worked like a dream for the past 4 years.

As long as yields in Spain and Italy continue to head lower, I don't see any major structural problems for the market. Lower periphery yields in PIIGS are essential to get something positive going in Europe again over the next 4 years.

With GDP starting to grow 3% last quarter, it's entirely consistent with the rational view that lower oil prices are helping the economy. Fundamentally, I think we'll see continued improvement in the economy as oil prices stay flat or decline over the next 4 years. I'm 99% certain that gold prices will track the price of gold, just not sure what will happen over any time period. December was the weakest month of the year for GLD last year, and that is repeating itself.

I don't think we'll see the low in GLD til next Spring sometime, so even a big bounce off a flushout should probably be shorted again. I think the correct trade for gold is to be shorting through most of 2013. Has to be a bear market somewhere! Gold and Brent oil prices are at the top of my list of things to avoid for another year.
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