Jump to content

Behind Bars


Recommended Posts

The Treasury Yield chart looks like AMGN. Just completed a 2nd wave down, and will be making a 3rd drive to a top to complete a bearish wedge.

 

This is consistent with a rally in equities into the year end.

 

After the "3 drives" is finished, the yields will tank and make new lows, as stocks go into a freefall.

 

Everyone is expecting higher interest rates. Maybe we will get the opposite, and rates could tank, causing all kinds of problems for the mortgage industry. The entire Mortgage Complex is currently hedged for rising rates.

I don't trade bonds and I don't share your bulishness regarding gold in the short term - but I agree with the above assessment. The ratio between the assets of the Rydex JUNO fund (bearish on bonds) and the Rydex Government Bond fund (RYGBX) is close to an all-time high (although a bit off its November top), indicating an excessively bearish sentiment on bonds. Since this is a contrarian indicator, the bonds are likely to rally.

 

Regards,

Vesselin

post-7-1040575348_thumb.gif

Link to comment
Share on other sites

  • Replies 144
  • Created
  • Last Reply
Sinclair advises against buying gold miners now and Bontchev is screaming from the top of his lungs

BitBull, that's probably a bit of an overstatement. B) I am only pointing out that the current spike to 354+ was unsustainable and that gold is due for a pull-back - probably at least to the 325-330 zone. And that we shouldn't get overly excited; emotions kill portfolios. Just be careful. I am still long various unhedged miners - I won't sell them unless they fall below their 50-dmas (and even then, I'll be on the lookout to buy them back, should they rise back above it).

 

Regards,

Vesselin

Link to comment
Share on other sites

this is what Art Cashin had to say about the upcoming "Santa Rally"

 

I'm afraid when we go looking next week all we might find is a warm pipe and a ransom note

 

Re gold, like Doc said, just accumualte the PMs and forget about them is the best strategy. Don't go too mental on it or you'll shake yourself out of them.

 

http://www.bearforum.com/cgi-bin/bbs.pl?read=267333

Link to comment
Share on other sites

For the ones that think gold is in a bull market now, what do you think about this chart? Thanks for the comments. I was thinking about buying some gold on a good pullback, but I'm having second thoughts now.

Slinger, this is precisely the Elliott Wave count that makes Prechter predict the POG falling to 185. Yes, the count is valid. Will it happen? I don't know. It's not a reason to panic; one just needs to be cautious. If you don't hold gold while it is below its 200-dma, you'll be OK even if what this chart suggests happens. For now, gold is still above this dma - and there is enough room until it falls below it, so it could have a healthy retracement/consolidation here without any problems.

 

Regards,

Vesselin

Link to comment
Share on other sites

What I find interesting about the long term charts is that they had a huge rally 30 months after the 1980 high, but moved into a lower low five years after the peak. Didn't the Nikkei have a similar path? Including the US experience 1929-32, the pattern of massive rallies 30-36 months after a market top may be a warning sign. Does the current stock market rally qualify? Or will it be in March 2003? See any similarities or connections we should worry about?

Doc, my intermediate-term indicators (described in my forum) say "no way". At the very best we can have something like the March Madness - but it inevitably will be followed by lower lows (lower than the ones in October, I mean), until these indicators reset themselves. Perhaps, once these lows are made (in the autumn of 2003, maybe?), we can have the powerful rally you're talking about. But now - no way; I can't see how it could happen - war rally or not.

 

Regards,

Vesselin

Link to comment
Share on other sites

jrc, I can't get such a long-term chart - but, yes, for the past 12-13 years the average (10-year MA) of the $GOLD:$WTIC ratio is about 16.64 and we're currently far below this average:

 

SharpChartv05.ServletDriver?chart=$gold:$wtic,uu[l,a]mallynay[dm][pb120!f].gif

 

Does that mean that gold will rally? Not necessarily. It could also mean that the oil prices will collapse faster than gold (which might even go up a bit). A scenario of successful occupation of Iraq and control of its oil resources (as well as a strong US military presence in the region), combined with a global economic slowdown (meaning less demand for oil) could result precisely in this.

 

The fact that the absolute values of $GOLD are much higher than the absolute prices of $WTIC means that it is much easier to move the above ratio by small decreases in $WTIC. If one is to move it the same way by increases of $GOLD instead, much bigger absolute increase would be necessary - which makes it less likely.

 

Regards,

Vesselin

Link to comment
Share on other sites

woooooooooooooooooooooowza,

 

HAPPY HOLIDAYS.... to everyone, Lana wishes all of stoolville a very prosperous and pork-fed new year.

 

as per Aussie's question, quite the correct read. as i related many moons ago here in stooltown, i went long the yellow metal by way of Kruges, i yanked out near all my cash from my passbook accounts and sank near a quarter of my netliq into the yellow metal. some here, i will not name names, thought this action to be folly falling over follies, a 'true contrary indicator' i believe one participant said.

 

well a few months into it and gold certainly is gleaming aint she. gee i wonder who sleeps better at night, me or the spooz 905 -915-925 level holders???? bwahahahahahahaahahahahahahahaha

 

Aussie, in deference to Maxpain, deflation is REAL, as real as the fingers on your hands and the toes on your feet, when in doubt, just count them.

 

i went long gold not as a trade per se, even though i'm a trader, but as true security and safety hedge/investment in THE most liquid and fungible hard asset EVER. i'm no gold bull or bug, i'm just a guy who's trying to stay alive- and as i see it when BBY, RSH, CC, WMT, FD,F, GM , DCX, XOM, GT, SNE, MSFT, IBM, MO and BA can't find any takers for thier wares, well its time to head for the hills, cause doctors, lawyers, accountants and consultants don't 'MAKE' anything.

 

they diagnose, counsel, (mis)account, and advise the hard goods producers on what's good, what's bad and what's ugly. and lately we've seen that there's lots and lots o the bad and ugly to prescribe 'advice' on or about. bwahahahahahaahhaahhaahahhahhaahahahahahhahaahah

 

the trouble is many consumers look at these advisors' price increases and say gee my 'cost o living' is rising not declining, so what are these deflation derelicts talking about? i will answer these questions with the following real life example, recall the halcyon days of the 'eighties' when a college drop out or high school slacker with a diploma could make a $40,000/yr salary as a travel agent? see, you don't do you. because the mind works like that, its called survirorship bias, just like all those nixed dog funds of five and ten years ago, that magically go poof in the night never to be recorded again for 'performance measures'. service data is the same way for GDP measures.

 

ever wonder why Uncle Al is always crowing about the service economy's 'productivity' gains? well the above should make it fairly obvious why, its the easiest measure to manipulate PLUS it self- degrades, the more flameouts the better the number looks. but if you really think, deflation isn't real go talk to a salesperson, ANY salesperson who is commisioned-based, and hear what they have to say. doctors salaries have DECREASED in the last five years in real prices, so have Accountants' and the McKinsey/Booz consultants'. here in Chicago i know more than a few McKinsey types, and their biz is hurting too, no big bonuses this year, or last year for that matter.

 

 

now back to gold, as per the oil debates well, i think oil futures are a sale in the low 30s, i think gold is buy up to 500 and i think if you own a a home seriously think about what price you would sell out for, because if rates tank, everybody and their mother will be bidding realestate, the tax advantages waaaaaaaaaaaaaaaaayyyyyyyyyyyyyyyyyyy outweigh those of 'paper' assets/stock and bonds. think i'm kidding- why do you think San Fran is still bid( mid market) cause Aunt Sue knows, i can write off my interest, how can i do that with CSCO stock? i can LIVE in the house, how can i do that with CSCO stock, if i file for bankruptcy, i can keep my house, can't say the same for the old mutual fund or the PreIPO CSCO stock, can you?

 

its simple, in deflations hard assets increase in value, if they dont then its not deflation. its some weird stag/dis- inflation permutation. the key for this trader is TGT, as her fortunes go, so do Mr and Mrs America- and by the looks of it they are heading to the poor house.

 

i said it before and i'll say it again this market is sideways to toast!

get the butter and the bbq sauce ready- cause pork done come a cropper- bwahahahahaahahahahaahahaahahahahahhaaahahahahahahahhahahahaa

hahahahahahahhahahaahahahahahahaahahahahahhahahahaahahahahahha

 

for now i will hold my Kruges tightly, and sell spooz lightly. as i see it safety first in this pos market. i think whoever can keep their netliq even in '03 will be a 'winner'!!! that's what i think of what's to come. no place to run, no place to hide, just ask ACF, KSS, BBY, TGT, and RSH. remember my Haloween post about how the mall looked horrible? well after the Procto induced run up over Oct and Nov, all these piggies are doing the well deserved Rover, you know what Rover does right? right, he rolls over. bwahhhahahaahahhaahaha

 

stay nimble, stay focused and hey smoke em

 

so says i,

 

MERCILESS

Link to comment
Share on other sites

Thanks Doc for the chart. What do you think about the 1993 higher low and the 1996 higher high? Wouldn't have traders watching that chart action back in 1996 been saying gold was in a bull market based on the definition of higher low and higher high? Also, can you clarify which secular downtrend that was broken? The monthly chart is showing that this month's high bounced off the higher trendline. I'm confused. Thanks for the clarification.

 

I'll dip my toes in the gold if it pulls back to the 330's or lower and the indicators are turning up or if the trendline on the monthly chart is broken upward. I think that is the safe trade.

Link to comment
Share on other sites

MERCI MAN,

Good to have you back, your post sums up alot of my thoughts on this once great country. America was built on the backs of hardworking men ,ingenuity and necessity being the mother of invention. At one time we had enormous resources, exports and manufacturing effeciencies. We are now nothing more than a country of burger flippers, and service providers with incredible misallocation of capital. As a physician your point regarding the service sector is well taken. We probably are a drain to resources rather than a contributor although we provide an essential service unlike wall struck and attorneys who contribute zero to GDP and do nothing more than redistribute wealth. The next five years will be about self preservation and financial survival....may even consider a trans atlantic move as my philharmonics will spend just about anywhere...lol

When will it all end? cant say but I dont see em holding this house of cards up much longer...dont expect to be able to flip on the tube and catch an NFL or NBA game in the near future...wadda shame!

Link to comment
Share on other sites

My first post here, so I'd like to bring up a topic which hasn't been discussed yet, the results of the SEC settlement.

 

I've heard the pundits on Proctovision saying how this settlement will be good for the market, but I'd have to voice my opposition to this viewpoint, at least in the short run. I just find it hard to believe that ANALcysts will be able to continue to recommend buying stocks in companies with no earnings and selling at more than 5X sales. It could prompt wholesale downgrades based on valuation. I think we're just starting to see subscription to this new religion. Comments, anyone? Just another piece of a complex puzzle.

 

As an addendum, wouldn't this ring even truer if fee-based research becomes a real occupation again, with those making the right calls being rewarded monetarily?

Link to comment
Share on other sites

You know I do not understand the paranoia about GOLD-there is as Mark says something in the human brain that refuses to see or understand a BULL market-that is the proverbial "wall of worry" which is being expressed now on this Board. Bontchev is CORRECTO as long as POG stays above $330.- she's a BULL even if it declines (likely) to $321.- she's a BULL-the XAU above 71 is a BULL and yes even on a pullback to 65. The first BIG MONEY-I ever made was back in the time of 20+% interest rates and soaring inflation-I bought 2 kilo bars of POG at $173 and $189 an ounce and shoved them in my safety deposit box and bought 2,000 shares of Campbell Red Lake Mines at $18.- @ share. I sold the kilo bars north of $750.- an ounce and the shares at $86.-. All during that crazy time every two bit anal cyst and expert said it couldn't go higher-yet if you could read a chart-the chart always said higher. That was inflation-this time is deflation-yet POG's action is the same-HIGHER-never, ever ignore GOLD's siren song it will provide SAFETY for you and your loved ones. Now I hold GG, AEM, ASA and VGZ-on a pullback I am a buyer-would I take profit here??-no way-we are staring WAR in the face-we are staring an economic collapse in the face-as GOLD consolidates BUY- as the markets rally over the holidays-SHORT the hell out of it-for BEARS with balls-being long POG and long term short the market-is the opportunity of our lifetime. Someone E mailed me and wanted to know WHY? I was long SPX at this moment- well I am long 900 and short 880 and 885-if the market rallies for awhile i will add shorts as it moves up-if it tanks-I dump the calls-but do not be surprised to see more of a rally than you expect into mid January-then it's Light-Out! Trade Safe!

Link to comment
Share on other sites

Happy Sunday to you PHAT- To me it's just about liquidity and leverage. There is nothing wrong about going long the inflatables-but I would rather be long the whole market to get the MOST out of any rally and I can be in and out in a flash which is not always the case with the inflatables-Torah last nite said he tried to sell his KLAC puts and only had 1 go-SPX is point, click and gone. As well my strategy is long January short March and April (so a long straddle) and every day it goes up I add higher shorts as I build my ladder-it has worked for me for a long time-but there is nothing wrong with your way either. Trade Safe!

Link to comment
Share on other sites

Great thread as usual. I know some of you are reluctant to start new threads, but some of these pots are clearly deserving of their own thread. I know, I'm just as guilty as everyone else.

 

So I would encourage you that if you have a new thought that is not in the ongoing context of this trhead, by all means post it on Look Out Below as a new topic.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Tell a friend

    Love Stool Pigeons Wire Message Board? Tell a friend!
  • Recently Browsing   0 members

    • No registered users viewing this page.
  • ×
    • Create New...