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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: fedhead who wrote (26714)	12/28/2005 9:24:32 PM
From: Rarebird	Read Replies (2) \| Respond to of 57684

>>How do you know gold stocks are not predicting higher gold prices<< During the early stages of an advance, the gold stocks lead the POG. That is to say, it is the gold stocks which rally strongly while the POG lags. As the advance matures, the POG catches up. A Gold/XAU ratio under 4 has historically been a short term sell signal. The ratio is currently at 4.05, so there's still some room to rally. At the tail end of an advance, the stocks need the POG to surge in order to rally strongly. That's what I am looking at here. Eventually the stocks just stop rallying as the POG spurts higher. Then the rally is over. With the Barrons article over the weekend stating how the POG will continue to rally regardless of the economic environment, with the commercials massively short the POG in the futures market, with the Market Vane bullish consensus undoubtedly well over 90% bullish at this point in time, with every Tom, Dick and Harry gold fund (and some mutual fund) manager(s) painting the tape here, the table is set for a nice little blowoff to an area where an ex-polar bear like myself can only be patient and smile. PS GFI and HMY are toast again if the USD resumes its decline against the Rand (as I expect) in 2006.