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To: Ilaine who wrote (23384)	10/1/2000 2:25:37 PM
From: re3	Respond to of 436258

i remember seeing a post with that bit a year or two ago ! and on gold : (from the toronto star today) Signs point toward gold resurgence Precious metals index takes stand on U.S. dollar Judging from my e-mail, many investors still have not got the message about the bear market in technology stocks. The March, 2000, spike was the high watermark for about 80 per cent of the group and most of them will never recover from the steep losses that followed. Our summer rally in the technology sector was simply a bear-market rally in the group that provided investors a second chance to reduce exposure to the technology sector. The technology rally is now over and the technology stocks are beginning a second down-leg, many of them to new lows. Some recent casualties are Calgary-based Cell-Loc Inc. (CLQ:TSE). That collapsed 50 per cent in a few days on an earnings shock. Toronto-based Microforum Inc. (MCF-TSE) collapsed after reporting a loss significantly higher than analysts' expectations. The next lamb to the slaughter was telecommunications equipment manufacturer SR Telecom (SRX-TSE), after a warning of weaker-than-expected performance at its Chilean operations. This second down-leg in technology stocks is serious because some of the bigger names in the sector are coming up with bad news on a larger scale. Two weeks ago, the shares of Intel Corp., the world's largest computer-chip maker, had its biggest drop in the company's history after warning third-quarter sales will fall short of forecasts because of weaker demand in Europe. A week later, Apple Computer Inc. shares did one better, dropping as much as 57 per cent, a record, after the personal-computer maker said fiscal fourth-quarter profit will fall short of analysts' expectations due to slow sales of new products. These shocks eventually affect other related stocks such as rival computer makers Dell Computer Corp. and Hewlett-Packard Co. Part of the problem is the powerful U.S. dollar, which has made U.S. manufacturers less competitive in Europe. Our chart this week - the upper plot - is that of the weekly closes of the U.S. dollar. The powerful advance over the past four years has depressed most world currencies and some commodities prices. Under the plot of the dollar, I have plotted the TSE Gold and Precious Metals sub-index, which is another casualty of the strong U.S. dollar. It is obvious their relationship is inverse, in that every advance in the dollar to a new high was matched by a new low in the TSE Gold and Precious Metals subgroup. The data for the TSE subgroup are quoted daily in most financial publications. The U.S. dollar index can be found in the futures section of most financial publications. I use the spot price for my work. I also use a semi-logarithmic scale - or percentage scale - when charting data that doubles in the chart window. The use of a linear scale would distort the magnitude of recent gains or losses. A strong U.S. dollar makes any U.S. exporter such as manufacturers and farmers less competitive in world markets because their customers must convert their local currency into an appreciating U.S. currency. The possibly over-valued U.S. dollar has been a problem for gold when quoted in U.S. funds. A strong currency such as the U.S. dollar can also cause friction between major trading partners because the partner with the weak currency has a price advantage that has the same effect as an invisible tariff. The partner with the strong currency eventually retaliates and places restrictions on the other's cheaper imports. The stage is set for a trade war that would disrupt commerce and impact the financial markets. I think the U.S. dollar is about to decline and give the price of gold a boost - our chart offers some evidence of this scenario. Note the recent advance in the U.S. dollar this year and note the refusal of the TSE Gold and Precious Metals subgroup to make a new low. This is called divergence and it is bullish for gold stocks. Investors now have lots to worry about: falling technology stocks and trade wars. Think of gold stocks as insurance.

To: Ilaine who wrote (23384)	10/1/2000 2:39:43 PM
From: Earlie	Read Replies (1) \| Respond to of 436258

Coby: I nominate CB as HSE #2. (g) Good job. I love that quote, primarily as it sums the current scene up so delightfully. Party on dudes. Best, Earlie