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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (68070)	11/12/2010 5:48:34 PM
From: TobagoJack	Read Replies (1) \| Respond to of 217617

just in in-tray overnight From: H Sent: Sat, November 13, 2010 2:41:09 AM Subject: Re: Observations - Week of November 8 what seems to be a better indicator of euro strength/weakness than the CDS on the debt of the peripheral nations are euro basis swaps (which essentially are a 'tell' on dollar funding of dollar liabilities within the euro area's banking system) . these have held up better until recently , but are now widening out again (into negative territory) as well. in any case, i don't think the euro-dollar rate is especially relevant for gold right now. From: H Sent: Sat, November 13, 2010 1:01:33 AM Subject: Re: Observations - Week of November 8 November = cycle turn month in gold. there have been important turns (lows or highs) in November almost every year over the past decade. sometimes they were a little early or late (i.e. came in late October or early December), but November is generally the mid point (the other major turn month is May). plus, Rydex traders are now finally excited enough about gold that they have moved a lot of money into the Rydex pm fund (up until recently they were cautious - but not anymore). the big turn day in silver recently may have been it already? i'd normally expect at least one more run-up to retest the highs, but that is not certain. bullish consensus on silver was at an extreme for a good part of the rally, so it may need a bigger shakeout. On Fri, Nov 12, 2010 at 7:06 PM, T wrote: H, I agree with your statement, but based on the interest we had in making sure the ECB designed a "good" stress test, I've always assumed a strong Euro/weak Dollar was part of the plan to ramp the markets. As you have indicated in your blog for the past two months, spreads on the PIIGS have been increasing and yet, the Euro continued to rally against the Dollar. Perhaps I'm too much in the conspiracy/agreement camp between central bankers, but I see a perfect fit for a weaker Euro to help with their exports while at the same time a stronger Dollar give Bernanke cover for his excessive printing. I wonder how long it will take before European buying of gold picks up the slack from those that are Dollar based selling gold. BTW, I covered my gold short this morning (DZZ) and just went long major miners at 1162 POG. Thanks On 11/12/2010 12:08 PM, H wrote: the euro doesn't need an agreement to come under pressure. bond yields of the PIIGS nations are back at their crisis wides, in some cases making new highs. but that is actually not negative for gold, if the last iteration of that crisis is any indication. e.g. today the dollar and gold are both down, so the dollar's exchange rate may at the moment not be so important for the gold market (in this context note that the biggest rally in the 1970's bull market occured actually while the dollar was busy bottoming). On Fri, Nov 12, 2010 at 2:58 AM, T wrote: There is almost nothing I like less than an endorsement by Cramer. I fear a gold smacking is coming, as I find it odd that margin requirements were bumped for silver, but not for gold. Zero Hedge has a comment about this, along the lines that an undefined potential margin increase is more effective that one that is known. zerohedge.com An idea I'm thinking about is that perhaps Trichet and Bernanke have an agreement that the Euro will "allowed" to weaken as the new and massive POMO schedule starts. This might give Bernanke some cover to print, while the dollar actually strengthens and the indexes stay fairly flat (or I would guess that would be Bernanke's assumption/goal).