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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (7965)	2/13/2004 1:47:45 AM
From: ild	Read Replies (2) \| Respond to of 110194

Date: Thu Feb 12 2004 23:58 trotsky (gold price) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved why has the gold price been rising? one obvious answer is the decline in the dollar - it has simply moved inversely to the dollar. many people assume future inflation must be behind the rise - but i submit that a far more sinister fear could be the driver, namely beginning doubts about the viability of the fiat money system as such, in view of the massive imbalances it has wrought. consider the sheer size of Japan's interventions - they say 'there is already a crisis' - even if no-one admits it. note that the LAST monetary dispensation ( Bretton Woods ) disintegrated in a roughly similar manner - it began with foreign CBs trying to keep the dollar up via big forex interventions. similar to today, the US administration at the time didn't care. at the beginning of the 70's, no-one believed a decade of monetary and economic upheaval might be in store...mighty bear rallies recouped the ground lost in stocks beginning with the '68 top with some regularity...gold began to rise, although the consensus was that its demonetization should lead to a fall. however, this coming decade should be substantially different in many respects - all the higher stages of prodction suffer from enormous overcapacities and merciless price deflation for instance. you may not be aware of it, but computer technology has made entire swathes of industries obsolete. i believe what is happening overall is generally little understood, and furthermore i do not believe the PTB are in control of it, except maybe for short term periods. Date: Thu Feb 12 2004 23:36 trotsky (stock market) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved just wanted to pop in to make it known that the Investor's Intelligence bear contingent has now fallen to 15% - i believe that's a record low. consider that at the very TOP in '99 - 2000, this percentage was actually fluctuating between 30% and 40% - the 'normal' bull market bear percentage. as it says in Elliott's rule book: "at the secondary high of the B wave, the bullish consensus often exceeds that in evidence at the bull market top". in addition to the fact that there are obviously NO bears left ( the 'smart money fearless forecasters' have finally given up as well - they have only 23% bears and 54% bulls, after having stayed predominantly bearish throughout the rally. today's equity p/c ratio clocked in at an ultra-optimistic 0.43 btw., and Rydex bear assets are 50% down from their highs while bull assets are 300% up from their lows ) , there have been a few quite glaring divergences of late. e.g. the Dow Indu and the NYSE index made a new high for move on Wednesday , while transports , COMP and NDX made significantly lower highs. the complacency/options volatility premium measures VIX, VXO, VXN, QQV have made higher lows - albeit still firmly in lala land - e.g. the VXO is at 14.90. so what can be stated with confidence is that no-one is looking down, while the technical conditions are beginning to look more iffy - when the NDX begins to underperform the Dow, it signifies beginning risk aversion - one of the major red flags imo. also, 93% of all NYSE stocks are above their 200 dma, while the new highs have bearishly diverged with the new high in the index - the one measure says 'maximum overbought' while the other says 'the rally's breadth is narrowing'. it has been dangerous ( obviously ) to short this market up until now, and it still may be - but the air for the bulls is getting VERY thin here. note also that CoT reports in various commodities and currencies suggest that those trends are long in the tooth as well, i.e.,several trend reversals may be close by, although they probably won't all happen concurrently. note re. gold stocks: recently money flows have weakened - but generally, gold stocks can rise when the rest of the stock market falls, as long as the fall is not viewed as excessive, i.e. as long as it doesn't damage the bullish sentiment too much. lastly, i for one disagree more or less completely with the consensus on the economy - if one looks at recent rate-of-change charts in leading indicators, ISM, retail sales, one notices that a slowdown has already begun. this is no surprise - mortgage refinancing activity has ground to a halt, and we may be in the beginning stages of the consumer recession, which could be a lot worse than the tech boom collapse/business recession that preceded it. this is after all the most leveraged economy in the history of mankind and the 'authorities' have basically shot their wad with regards to fiscal and monetary stimulus. note that capital investment is extremely unlikely to kick in when a consumer recession commences - it moves in very long cycles, and the next up cycle is imo years away. why would businesses invest with some 34% of industrial resources currently idle? the very idea is preposterous.

To: mishedlo who wrote (7965)	2/13/2004 8:45:44 AM
From: russwinter	Read Replies (2) \| Respond to of 110194

Easy Al yesterday, "We ain't got no stinkin inflation!". Next day import prices are reported, and I have to ask why this guy would have any credibility at all? Attention Wal Mart shoppers. The export price increases should not be ignored either, as it shows US based operations are passing on costs as well. Reuters Import Prices Rise More Than Expected Friday February 13, 8:29 am ET WASHINGTON (Reuters) - The price of goods imported into the United States rose sharply in January, advancing by much more than expected and signaling the weaker dollar may finally be making itself felt, a government report showed on Friday. U.S. import prices rose 1.3 percent last month, the biggest increase since February 2003, after a revised 0.5 percent advance in December, the Labor Department said. Wall Street had forecast a milder 0.4 percent gain. It was the fourth consecutive monthly rise in the price of imports. Excluding petrol, import prices advanced 0.7 percent, the largest climb since March 2003, while petroleum imports gained 6.2 percent. Industrial supplies and materials were up 4.4 percent -- the biggest rise since February 2002. The department said export prices increased 0.5 percent after climbing 0.2 percent in December, with foods, feeds and beverage prices down 0.9 percent for the first decrease in five months. But industrial supplies and materials rose by 2.4 percent, the largest monthly increase since 1995. The import price data contrasts with comments of Federal Reserve Chairman Alan Greenspan on Wednesday. He noted that while the weaker dollar had led to a slight increase in import prices, the impact remained mild and was no concern at this stage. The dollar has slipped 13 percent against a broad basket of currencies since early 2002.