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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 (69837)	9/15/2006 4:50:07 PM
From: orkrious	Read Replies (1) \| Respond to of 110194

Hambone@sentiment indicators -- trotsky, 16:11:37 09/15/06 Fri 'quantitative' only means 'sentiment indicators involving measurable money bets'. they are technical indicators, and are subject to the same limitations as other t/a indicators - i.e., they are context-dependent as well as only indicating probabilities. per experience these indicators work extremely well, but that doesn't mean that you don't get exceptions to the rule now and again. for instance, i would ascribe the failed break-out in the gold indices and the apparent failure of the sentiment indicators to a set of short term extraneous trigger events. after all, before gold suddenly swooned, the gold shares were on an outperformance streak, which seemed to support a bullish outcome. the extraneous trigger events are the recent rumors of accelerating WAG sales (this, if true, is actually medium to long term bullish, but it's always short term bearish) as well as the sudden slide in oil prices. now oil also has nothing to do with gold longer term, but the funds playing commodities futures move in herd-like fashion, so this definitely counts as such a trigger. the quantitative indicators are superior to anecdotal ones as they indirectly measure the amount of money on the sidelines. interpretation of sentiment indicators is as i said context-dependent. that is why e.g. a slightly LESS bearish reading from Rydex fund flows coupled with price action that looks bearish such as recently is a positive. this indicator has moved in a tight band - and it continues to show that there is a lot of money that used to be committed to the sector that is currently not in. if positive price action develops from here, we can expect these funds to flow back in and support a rally. in all likelihood such a rally would end with another divergence in fund flows. Hambone@sentiment -- trotsky, 14:04:16 09/15/06 Fri actually, in terms of quantitative indicators, sentiment has become LESS bearish, not more so. in the meantime, anecdotal, or sentiment via polls, has become much more negative of course (see e.g. Hulbert's gold timers index). however, this is not a bad thing. as i've mentioned, one of the effects is that e.g. the cumulative Rydex CF ratio is producing a higher low vs. the fund's lower price low. this is frequently seen at turning points - it does not guarantee a turning point of course, but it heightens the probability that one is forming. this type of divergence also accompanied the May '05 low for example. frustrated@GG -- trotsky, 13:42:35 09/15/06 Fri "I wonder how Apollo is feeling about it..." blue. @Iraq - another re-run -- trotsky, 13:28:51 09/15/06 Fri from RIP's earlier link about the Baghdad trench digging operation: "One of the few positive developments for the U.S.-led coalition and the national unity government was the reported killing of a senior member of al-Qaida in Iraq and the capture of another al-Qaida leader. The Interior Ministry said Abu Jaafar al-Liby, who it described as either the second or third most important figure in al-Qaida in Iraq, was killed by police earlier this week. " and thus, al-Quaeda's number two in Iraq has been killed for the 813th time. @Guenther Verheugen -- trotsky, 12:46:16 09/15/06 Fri Verheugen is the vice president of the European Commission (he used to be a German politician in the German Freedom Party if i remember correctly). actually, quite a level-headed and likeable guy for a EU bureaucrat. for instance, he's against state intervention in the economy and an avid anti-protectionist. he's trying to push economic liberalization in the EU. he must never travel to Australia though...when at rest, he looks a lot like a cane toad. they'd shoot him on sight. @HUI -- trotsky, 11:10:42 09/15/06 Fri it would get potentially interesting if the HUI manages a close above 300. in that case it would have experienced both a false upside break-out and a false downside breakdown in the space of 9 trading days. noteworthy: yesterday's standard outflow from the Rydex pm fund was once again very small, which has left the positive divergence between the cumulative CF ratio and the fund's price intact.