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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 (62429)	6/1/2006 12:34:31 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Thu Jun 01 2006 11:29 trotsky (guac@XAU) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved why 'ouch'? imo it looks extremely strong today - even better than i expected - see my 'downside in pm stocks is limited' post at the start of trading today. the Rydex fund flows are statistically significant as a sector-wide sentiment indicator imo, and the main message from those is that most of those who were likely to sell have apparently done so by now. gold has lost nearly 40 bucks in two trading days, but the XAU is 7 points ABOVE its low of 8 trading days ago. the downside momentum is clearly waning - imo a warning signal for those short the metals themselves. Date: Thu Jun 01 2006 10:11 trotsky (@pm stocks) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved further to my earlier remarks, if the XAU/HUI manage to stay close to current levels today, we will have yet another bullish divergence between the pm indices and the PoG. a bit early to call perhaps, but i rate the chances to be quite good - pm stock money flows look good so far. Date: Thu Jun 01 2006 10:06 trotsky (traderneal) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i would amend JD's comment with the remark that financial markets are almost NEVER 'rational'. price moves are 90-95% based on emotions, not rationality. it is herding behavior that is reflected in financial markets, not some 'if A happens, B must happen' type of formula. Date: Thu Jun 01 2006 10:00 trotsky (copper) ID#248269: limit down today, although trading has meanwhile resumed again so that it can fall further. Date: Thu Jun 01 2006 09:41 trotsky (@pm stocks) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved yes, such big drops in the PoG are scary, but if one recalls the major corrections in crude oil in the course of the '03-'05 rally, those were similarly harsh and fast. the downside in gold stocks should actually be limited - yesterday, ANOTHER $1.6m. flowed out of the Rydex pm fund, putting the cash flow ratio within whispering distance of its 2005 low ( another $5m. and we'll be right there ) . meanwhile bearish sentiment is also more evident now on an anecdotal level such as this recent marketwatch article entitled 'gold ready to crash': marketwatch.com usually the general investment world doesn't even care enough about gold to comment on it - as the author admits, "Neither of the editors of Index Rx would have recommended precious metals twelve months ago." but now they recommend to sell what they didn't recommend to buy in the first place - so they suddenly 'care', now that a correction is well underway. typically that only happens once a correction is nearly done price-wise. Date: Thu Jun 01 2006 09:13 trotsky (Bank of China IPO) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved the fact that this huge IPO simply skipped New York entirely and took place in Hong Kong instead looks to me potentially like one of those 'tipping points'. which town will be the 'financial capital of the world' of the future? the success of this IPO will likely embolden others to go a similar route. this could turn out to be a very significant event in hindsight.