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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 (69497)	9/8/2006 10:42:00 AM
From: orkrious	Read Replies (1) \| Respond to of 110194

@metals sell-off -- trotsky, 10:16:07 09/08/06 Fri palladium is getting crushed - this is the metal with the biggest speculative participation (speculators are collectively 8:1 net long), so clearly we have the funds selling all commodities indiscriminately, and the more lilliquid markets with the largest relative long positions are getting slapped the worst. @gold, pm stocks -- trotsky, 09:58:36 09/08/06 Fri gold is right at 'must hold' lateral support here. it's disconcerting that it only took two days from possible upside break-out to possible breakdown, but there it is. many gold stocks still look resilient though - funny enough, the ones that SHOULD be the most resilient, the SA stocks, aren't. anyway, with a failed break-out in the HUI/XAU now evident, there's a danger that the short term trend is changing from up to down. apparently gold is following oil here, which looks very weak. it should not follow oil, but it does. this is bad news because oil looks set to go lower still.

To: ild who wrote (69497)	9/8/2006 11:08:58 AM
From: No Mo Mo	Respond to of 110194

Thanks to you and Ork, both.

To: ild who wrote (69497)	9/8/2006 11:19:18 AM
From: orkrious	Read Replies (1) \| Respond to of 110194

@the dollar -- trotsky, 10:52:47 09/08/06 Fri with everybody and his auntie short the dollar (look at the CoT reports on the currencies and you'll see), anecdotal as well as positioning sentiment on the dollar almost uniformly bearish, it is little wonder that the dollar is suddenly coming to life. there is an additional, historic reason to expect dollar strength: the lag between Fed policy and its effect on the dollar. traditionally, rate hiking campaigns are dollar positive with a 6 - 9 month lag. iow, the dollar tends to be strong up to 6-9 months AFTER a rate hike campaign ends. the same goes for rate cutting campaigns in the other direction. note though that dollar strength against other fiat currencies does NOT necessarily imply gold weakness, beyond the usual short term kneejerk reaction. on CNBC, Rick Santelli just pronounced that 'it's difficult to imagine strength in gold when the dollar rallies'. however, this is precisely what happened in late '05 for instance. according to Bob Hoye, in a deflationary era one SHOULD expect strength in the dollar to eventually coincide with strength in gold. i originally rejected this idea, but i'm not so sure anymore since the late '05 episode.