Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (14625)	11/2/2004 3:37:02 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Heinz on gold and the US$ Date: Tue Nov 02 2004 10:51 trotsky (pm stocks) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved even more weakness to come imo - money flows have turned negative in recent trading days, speculators are massively short the dollar ( i.e., the dollar will likely embark on a post election technical rally ) and as i've previously mentioned, there are way too many bulls in the pm sector judging from the cumulative inflows into the Rydex pm fund. previously i was a bit more sanguine because big trader money flows still looked decent, but that has now changed. note though that a LOW in the cyclical turning point period in November is far better for the long term outlook than a high - so there's something positive to be gleaned from the current sell-off.

To: NOW who wrote (14625)	11/2/2004 3:43:22 PM
From: mishedlo	Respond to of 116555

From Heinz: Tuesday, November 02, 2004 dollar, addendum this is a purely technical comment on the dollar - judging from the speculative net long positions in non-dollar currencies per last week's CoT report, the rational expectation would be that the dollar will soon embark on a technical rally, iow. the double-bottom support WILL probably hold. the context is also obvious - as soon as the election results are known, the previous 'uncertainty' will be removed from the market and prompt profit taking by the hedge funds that hold these dollar short positions (they're really longs in other currencies, but the effect is the same). the current size of these net positions is at, or close to, record highs. we can already observe a pre-emptive sell-off in gold, which foreshadows the coming dollar bounce. the only case in which this expectation is unlikely to be met is if 1. the election result ends up being contested (highly unlikely), or 2. a terror attack occurs (which is inherently impossible to forecast, and should thus be ignored in terms of trading strategies). of course, IF the technical backdrop that strongly argues for a certain outcome is ignored by the market, it can sometimes be meaningful, but this is not a hard and fast rule (often support gets violated for a brief period , but still holds in the end - a 'throw-over'). so it seems that for a while at least, various pre-election market trends will reverse post election. imo, contrary to what many are saying, it DOES matter who wins. if Bush is elected, the trends that prevailed during his first term are highly likely to reassert themselves (especially w.r.t. gold and the dollar). a Kerry presidency may initially be interpreted as dollar negative and gold positive, but ultimately Democratic administrations tend to be far more fiscally conservative than Republican ones (counter-intuitive, but true - the historical record on this question is quite clear), which in turn lends support to the dollar in medium to longer term time frames. posted by pater tenebrarum at 11:10 AM worldmarket.blogspot.com