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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: gold$10k who wrote (4085)	11/16/2001 5:35:48 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 36161

["IMHO, anything below 52 on the XAU is in the "can't lose zone"] Valuetrader... I think we re-test 45-48 on the XAU - which is just a few tic's away. I'm adding on an average in basis each $2 down on NEM - in at $20ish here; sitting for 50/50 calls & common at $18 and will buy nothing but calls/leaps at $16 on down if seen. Sitting patiently to add in KGC GG AEM & PASS and a bit of CDE on further weakness. Just adding to core positions. NEM was a good $2-4 banded trader of late. I dumped all my HGMCY from the $4.50-$5 to $6 pop and am now redeploying those trading $ in NEM and that above watch list. I'd like to re-add HGMCY & GOLD - but they're not following the No American Golds down. I also think Silver is especially compelling if it breaks $4 for the physical and I love PAAS on any & all weakness from here. The Risk vs Reward scenario for Gold Stocks is as simple as this. XAU 41 is the "alltime" index low ever seen - which we got last fall. XAU 45ish for all practical purposes is the bottom of historic index range - with the index having penetrated XAU 125-150 5,6 times over the last 15 years - ie: once very 3 years on average. So for those adding on weakness here - we've got 5-6 points downside to the historic low of the index and 75 to 100 points upside to where we've been 5-6 times in the last 15 years. That's a 15 to 20:1 upside to downside risk vs reward ratio in the XAU folks... rarely does it get any better than that... a true no-brainer - chip shot.... as was OSX 45-55 in the fall of 1998. Buying XAU 45-50 is no different than buying OSX stocks in that same range.... both indices historically have traded in that 45 to 150 range. It amazes me how the average investor has fallen for this prop job by the Fed & the PPT/ESF. They know and work the technical levels well... the street gets the nod from the Fed/ESF and they all go "student body right" and run the market up... triggering positive technical levels - which in turn bring out all the pundits and also simultaneously force fund managers who must be nearly fully invested - to put money to work; as they can not miss any market moves by the essence of their OPM-oriented mandate. Then - when Mr. & Mrs. John Q Public get drawn back in - the Street then pulls out the rug (usually supporting a 50% retrace of the run) and take their prop job money out and rotate to other sectors. They realize they've got the "Greenspan Put" on auto-pilot here anytime the market tanks.... they just ride Greenpimps "prop job"; wait untill positive technicals are triggered and play the game all over again & again... Its going to happen right here... Greenspan is ramping money supply at unprecedented levels... every organic & fundamental catalyst for higher gold prices is aligning itself... only the absolute & understandable necessity of the Fed & the PPT/ESF not being able to allow GOLD to break out post the Sept 11th/WTC tragedy... has shaken out some speculators here... and why wouldn't the Commercials be short gold of late - they knew the Fed/ESF/PPT was shorting gold as part of the "Student Body Right" market prop job.... but, that short covering is just more coil to the eventual spring and NEM's arb blow off here - as well as it being THE sectors's barometer stock, giving it more than its fair share of shorting here - makes it fundamentally and technically the best buy among gold majors here - a virtual no brainer on a continual average down basis - and calls/leaps for leverage are a must at $18 on down. NEM's next move - given the short positions here; takes it thru $28 to $30 imho. I simply can not see any "real" positive news for the broad market here. Industrial output has had the longest & most negative decline since the great depression. We've got exponentially more money supply that will be chasing fewer and fewer goods very soon.... and what does that equal ? Nothing has changed on the nearterm global economic horizon... Argentina remains a basket case; Saudi Arabia may repeat the Fall of Iran to religious fundamentalism and the face & existance of OPEC may change dramatically as a byproduct of the War on Terrorism... There is absolutely no risk discount applied to the broad market for another Terrorist event and given the unsustainability of KING DOLLAR as well... this is perhaps the most irrational & propped up - "un-free" market in global history. The valuations are still insane - double the PE on the S&P of the last major recession - and there is simply no underlying earnings support to this rally, or to present valuations - NONE. John Chambers has said - it still could be as long as 8 quarters/2 years before Tech rebounds.... If Mortgage rates start rising here... that's going to effect consumer sentiment & spending very, very quickly...they needed to keep rates declining right thru the Xmas Retail season imho... the 10 year bond backed up & mortgage rates & their YSP's have backed up dramatically this week... don't underestimate how much of the positive consumer sentiment & spending bounce was purely mortgage refinance related... The BEAR is alive and well.... very well imho. All I want for Xmas is to be able to load calls/leaps on some $16-18 NEM... some .62 cent KGC, $7/$8 AEM, $8ish GG, $2.50-$2.75ish PAAS, one more shot at low-mid $4 HGMCY and I'll be pushing the PIG to HOG morph-zone real close (VBG). Unless we see Crude Oil spike due to a War/supply disruption event - the OSX revisits 45-58 again and that's allways a profitable trading area - as well as a longterm value entry level. Very little attracts me in the broadmarket long and we're actually only one more rally away from no-brainer short levels.