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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: paulmerch who wrote (151)	7/10/2005 5:59:19 PM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 50135

Long USD Spec's & Short Gold Commercials...... Per Dan Norcini's comments below (from Jim Sinclairs Site) - the Spec's have overloaded pretty heavy - long the US Dollar....and we already know of the heavy Commercial Short Position in Gold. That combination is "potentially" a highly combustible propellant for Gold's upside. There is still a rather large contingent of International Currency Players and Major Hedge Funds who are longerterm US Dollar Bears & Gold Bulls - for them, this is kind of like handing a pyromanic a pack of matches and can of gas... ============================================================================ Saturday, July 09, 2005, 7:10:00 PM EST Jim’s Mail Box Hi Jim: I have attached two charts detailing some of the internals in regards to the US Dollar Index which I think you will find enlightening. Today’s release of the COT data reveals a continuation of the staggering build-up in the spec long positions which show no sign of abating. What we are witnessing is, in my opinion, a near manic condition in which we really do have a massive imbalance of positions among the speculators. As you and I have both repeatedly stated, specs can build positions larger than many people can envision and that makes fading them quite dangerous when it comes to taking contrarian positions in a market based solely on the COT data. However, there does come a time when we really do have the proverbial situation that occurs in which the majority of specs are piled over on one side of the boat. That being said, I believe we have reached such a point in the dollar and are close to the tipping point. I say this based not just on the sheer size of the imbalance but also on the market internals which reveal a loss of upward momentum in the dollar. I am not saying that a dollar top is imminent within the next few days. What I am saying is that the conditions are ripe for such a top to occur and for a hard sell-off to take place. All it will take is either an extraneous event or further continued stalling at this level which will trip the indicators over to the sell side. When that occurs, the trading funds, which live or die by their black boxes, will simultaneously and unthinkingly head for the exits, precipitating a real “religious” experience for any of those who happen to be on the wrong side. It goes without saying that such an event will put a strong tail wind into the gold market and could very well be the spark which takes us through overhead resistance near the $440-$445 region. The current dollar rally, when the sell-off finally does occur, will be then seen for what it is and was – a short covering rally induced by Fed and Wall Street spinners which fed on itself due to the poor timing by European officials on the EU Constitution vote. Perversely, the dollar rally will only serve to have further worsened America’s chronic Current Account Deficit. Very best, Dan Norcini Please click on charts to enlarge in PDF format: sortweb.com ========================================================================== Thanks for the kind comments everyone... the next 90 days is going to be very interesting for Gold & the USD imho. $`