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Gold shares continue to act fairly well. A pullback is to be expected, but they are still grossly underperforming the metal. Nobody believes the rally in gold. A breakaway gap is coming. I suspect that the shorts are piling in now for the setup.

A snippet from The Daily Reckoning (Monday, 13 January 2003)

 

- According to the latest Commitment of Traders report from

the Commodity Futures Trading Commission, the speculative

traders in the gold market have amassed one of their

largest long positions in many years. (I.e., they own a lot

of the stuff). Meanwhile, the commercial traders in gold -

considered the "smart money" - have amassed their largest

short position in many years. In other words, whatever gold's

long-term virtues may be - and we here at the Daily Reckoning

think gold's virtues are considerable - the short-term sentiment

indicators suggest the yellow metal is ripe for a sell-off.

Unless foreign buying continues to support it, in which case those commercial shorts will be ripe for another bungee snap to the upside, kind of like what we saw between 338 and 348/oz.

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ditto on that b4.

 

especially wondering about GE. reports friday after the bell. P/C open interest has been dropping steadily & today dipped to 0.53 (which according to schaeffer's gives a one year percentile ranking of 0.0%)....but the jan 2004 P/C OI at the money is like 1.5. hmmmmm

 

anyway something seems a little....off. too quiet or something. grabbed some feb 22.5 puts on friday and am considering averaging down....while there's still a couple hrs in which to do it. :D

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Sure is quiet around here......

i'm here mark.....

 

just got in from work and looking at the charts today.I think if we fail to make a new high in the first hour tomorrow,we will start to drift down.I'm holding some qqq puts I bought the other day(I'm even on them right now).but i think we will see the start of a nice downtrend any day now.

 

the market can't handle too many more pop and drops.

 

the christmas poo has spoken!

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Yep Mark and Phat-it is too quiet and we all KNOW what it means! PHAT- One of Schaeffers anal cysts did a piece on GE and INTC today-have a look around their site you'll probably find it. That 0.53 ratio means everyone is on the bull boat-but man are they negative on INTC. Trade Safe!

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On machine tool orders. $140 million something for a month. This is nothing. More was spent on pantyhose last week. You just as well be computing buggy whip sales. The trend is indicative I suppose but this is sifting thru the ashes.

 

How many billion swapped hands in the NY financial markets today? It isn't even the tail wagging the dog anymore. It's just a big tail flailing around. The dog's floating in the East River.

 

The State of Michigan, my home, had a special buget cutting session last month. Today they got together to hear how bad tax receipts were in Dec. They were bad. How bad nobody will say till tomorrow. More cuts forthcomming. In 60 days the consensus for all state deficits has gone from $40bln, to $60bln and now $90 is being used. No word yet on Uncle Sams Dec. number. Tax receipts are simply collapsing and this stuff can't be faked or spun. The absense of chatter about a broader meaning in these numbers might be our real tell here folks.

 

One more big ramp job for old times sake? Hats off to them if they can pull it off.

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ernstime -ditto question - i was tinking bout dat trying to allocate some year end cash for "safer" investments. I like a combo of NEM and BGO - NEM won't all out tank on a pull back, and is the Big Mac of gold stocks for those starving newcomers wanting a fast gold positon with little nutritional value. BGO is my favorite junior with a likely growth spurt in the next few months (or sooner).

 

Stay away from BuryIck and PlaceboDome.

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ERNSTIME- I own several but my flat out favorite is (GG) Goldcorp-superb management-no debt-tons of reserves-it's Canada's 3rd largest mine and it has outperformed all of it's peers this year-in percentage gain-best of all it's cheap twelve bucks and change. NEM as pointed out by Lou is o.k. but they inherited a big hedge position when they took over an Australian miner which will hurt profits for awhile. I also own RGLD, VGZ and AEM. Trade Safe!

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Hmmm well, interesting development here. The All Ords has pushed through resistance in a very zigzagging type of fashion. That's the bad news. The good news is that it looks like it could be losing momentum so hopefully by close it will have sagged below the resistance line again, otherwise I will be thinking seriously of dumping some puts. Those of you thinking of a blow off before a meltdown could be on the right track. How about the DOW last night hey? Zipped up through 8800 and did a swan dive down through again...crazy market! Golds are having a down day and oils are up. Argggh how much longer do we have to put up with this!!

 

Mark, loved the comments re 2003 from the bullish anal cysts. Like a stuck record, those guys. When they start getting bearish then we have to worry!

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