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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: CuriousGeorge who wrote (48039)	7/18/2000 8:50:54 PM
From: pater tenebrarum	Respond to of 94695

CG, a cycle turning point is scheduled for just about now (tomorrow, to be exact). it may result in a counter-trend move in the XAU, as presumably a weakening stock market could hit the dollar as well. we'll see what the ECB does next - its Euro-zone inflation target has been exceeded by 0,4% according to the latest data, and a hike would serve to narrow the rate differential, which in turn should boost the Euro vs. the dollar. also the BoJ's zero rate policy is probably going to end soon. a weaker dollar is a prerequisite for a move in gold and the XAU. the XAU is at a historically very favorable ratio to the gold price...usually this ratio coincides with bottoms, in price if not necessarily in time (meaning some patience might be required). i'm legging into index puts here... the premiums are very low right now, and if the cycle downturn materializes they provide great leverage with relatively little capital at risk. however, the risk with options is that one can lose 100% of the capital invested. if you have never traded options, you should 'paper trade' them first to familiarize yourself with them. you definitely shouldn't just plow ahead, unless you can really afford to lose the money you risk in option trades. another way of playing downside potential is shorting either the QQQ or the SPY. however, if you do that, you should employ tight stops, especially with the QQQ. note, cycles can sometimes invert. however, since we have just hit a high for the current move coupled with some of the worst sentiment data in the market's history, i don't think this one will. regards, hb