Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (62779)	1/26/2007 11:15:29 AM
From: mishedlo	Respond to of 116555

@back on topic - gold sentiment -- trotsky, 10:52:28 01/26/07 Fri interestingly, money continued to flow into the Rydex pm fund yesterday - $6.4 m. all told. in short, the previous bearish sentiment continues to unwind at a pretty fast rate. now, it's not a bad thing when a rally is backed up by money inflows, generally. however, we want a certain degree of skepticism to live on. XAU p/c OI at 0.98 is basically in neutral territory right now, i note though that it normally confirms rallies by growing, and that hasn't happened yet. another observation on cash flows and potential cash flows: the average mutual fund in the US has a tiny cash reserve of 4% of assets - which is basically an all time low (and a bearish long term indicator for the stock market). by contrast, i've recently looked at a few gold funds and noticed that they hold on average a much larger cash reserve. e.g. USERX had 23% of its assets in cash as of 3 or 4 days ago. this may well exert a continued positive influence, as the budding rally will likely lead to some of that cash being shifted back into gold shares. consider though that there's a feedback loop at work - we need positive price action to get this cash flowing, which in turn then leads to more positive price action.