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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: accountclosed who wrote (1073)	3/29/1999 1:10:00 PM
From: ahhaha	Read Replies (1) \| Respond to of 3558

What has been happening in the major golds is representative of what is happening today. Small orders to sell take the stock down disproportionately to small orders to buy, yet big orders to sell don't push price down hardly at all. In fact, someone dumped 100K at 11:50 EST at 17 after several medium blocks on market order to sell took it down 3/16, 2/16, 1/16, and then several more small blocks at 17 and then the 100K and last several including the 100K were on 0- ticks. I call this a local sell regime. Today there has been almost no market orders to buy, yet in spite of this heavy flow of money out, price concession is minimal. This indicates that there is strong hands nearby. The selling is public institutional and represents the capitulation phase which is defined by no buyers and today you have that in ABX. It is partially based on the unfound view that industrial stocks and golds are inversely related so that if the DOW is rising, you should be selling the golds. It is a self-fulfilling expectation. Gold bullion held so you have to thrash around trying to find why these institutions are selling. You can only find the rumor that X fears central banks sales. Maybe it si the market doing its 3rd or 4th discounting of the same old news or maybe its fear of IMF selling bullion or...end of quarter window dressing. In contrast when there is a little buying which is rare price perks right up. You have to pay up to play. There are few block orders to buy these days so it has been difficult to assess what would happen if the institutions started buying. The net effect of these two markets states is to on-balance enable quite a lot of money to go in and stay in the stock. At this point today it looks like we're going to have quite a negative total flow, but the integrated differential flow will not be very bad because, for example, the 100K block on 0- tick will be integrated out. It had zero inelasticity with respect to marginal supply. This suggests though that ABX could get a reversing rally in the afternoon. I am not saying what you surmised. The preponderance of the action is being initiated by sellers, but their effect is absorbed, so there is little effect. The market is sold out. There are few buyers. The buyer's money stays in, but the seller's money comes out without price concession. It is at the top that selling dries up and where buying has the inverse effect of what selling has in ABX now. This is easy to understand if one knows how the specialist's book works. I do overall money flow on the market. The flow structure has diverged completely from price to a degree not equaled in 20 years. If the two were synchronized, the DOW would be at 7800 or so. This is another example of the inverse of what is happening to ABX in market state. Whereas golds and industrials are not always inversely related, their internal states more often are, but that doesn't tell you anything. The money flow analysis does not predict the future. It only tells you the state and the state of the averages is uniquely precarious. FED isn't printing too much money since it is mostly leaking out to Japan and other Asia. Is that good? It's about the worst possible thing that can happen, but I won't go into that now.