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Gold/Mining/Energy : Gold Derivatives
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To: Stephen O who wrote (24)9/27/1998 8:06:00 AM
From: Zardoz  Read Replies (4) of 39
 
Short squeezes are only temporary in nature. And when they are finished as was probably shown on Friday action. Than the stocks trend back into their normal patterns. As an example: ABX

mypage.direct.ca

This is a chart that show how Barrick trades relative to the price of Gold. As such you can clearly see the region as to where to go long {left} and as to where to short. {Right} for clairity I've marked where we are. These are stastical models of Barrick. The dark left line is when they started their hedging program, and is/was based upon interests rates. The right line demonstates a stiff maximum short line.

mypage.direct.ca
This is a mean correlation plot. If you look at the rightmost price of ABX you can see it is a demonstating a price of gold of $310 +/- 5.00 as which it's over valued. So either GOLD must signifacantly rise, or ABX must fall.

My guess is a hedge fund unwound it's long position, while everyone was falling for the Faber opinion that LTCM was short Gold. A timely event. {would explain the ABX spike to 32.20}
quote.canada-stockwatch.com
quote.canada-stockwatch.com

It may be time on monday to run a hedge. Consider shorting shares against a call position {short expiration}... Me, I'm looking for put optiions. But I'm a speculator.

Similiar charts appear for NEM & PDG
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