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

To: ild who wrote (46771)	12/7/2005 2:26:32 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Wed Dec 07 2005 13:05 trotsky (ellix, 9:33) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved a better view of how long the last secular gold bull cycle actually lasted is provided by the S&P gold mining index. it only SEEMS as if the cycle began in '71, because gold itself was at a fixed price previously. the bull market in gold stocks however began in late 1953 ( with a secondary wave 2 low registered in early 1960 ) . iow, the market correctly anticipated that the gold price would have to be freed at least 10 years before it happened. gold stocks rose smartly throughout the 1960's. the 1970's bull market then saw gold catching up with those 'lost years' , which is why the rise was so extreme percentage-wise. Date: Wed Dec 07 2005 12:31 trotsky (@the sentiment front) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved it is astonishing how much skepticism attends this recent move in gold. for instance, there has still not be any significant buying of the Rydex pm fund. this is very unusual, considering gold has just bested the '83 and '87 highs. this break of the old highs needs to be sustained on a closing basis - if so, then i'd consider it the most important technical development in, well, 24 years. -vbg- anyway, the current move is marked by the conspicuous absence of the small trader. e.g. the net long position of small speculators at the COMEX is hovering close to a 4 year low. also indicative of this lack of small trader speculative activity is the sluggishness of the smallest and most speculative gold penny stocks, i.e. the long-shot variety of speculation. nobody is buying lottery tickets in a big way. the only fly in the ointment is the build-up of open calls in the gold sector in the January expiration series, but as we have seen in September, sometimes those also act as delta-hedging afterburners, and it is quite possible that the buyers were of the smart money category ( after all, the identity of the buyers is an unknown ) . anyway, it was mentioned to me that this market is beginning to look scary ( because it's overbought ) , but in view of continued bullish looking money flows ( especially on down days there's a lot of big trader dip buying ) and the above mentioned signs of skepticism i'd say the bull remains intact.