Charmin Posted May 2, 2003 Report Share Posted May 2, 2003 Tom O'Brien made note of heavy volume on April 11 for RANGY and it did squat Apr-11-03 open 11.67, high 11.73, low 11.51, close 11.60 429,700 ASA on its way to $38, GLG on its way to $13, Link to comment Share on other sites More sharing options...
alceringa Posted May 2, 2003 Report Share Posted May 2, 2003 thanks - some nights it's interesting to see what's going on the other side of the planet :grin: Won many a drink at the bar with this quiz- Lead in- 1) Start at San Francisco, CA. Go straight through the center of the earth and end up on the other side of the planet. Then swim to the nearest land fall. What language is spoken there? Answer- French, Seychelles Islands (Formerly French Seychelles. Off Madagascar) 2) Same question, except start from New York City? Answer-French, Amsterdam Island. (lle Amsterdam-in the Indian Ocean) Now for the "bet a drink" question- Same question, except start from Paris, France? Link to comment Share on other sites More sharing options...
Charmin Posted May 2, 2003 Report Share Posted May 2, 2003 let me guess - chinese - Hong Kong I need a cup of starbucks this early Link to comment Share on other sites More sharing options...
alceringa Posted May 2, 2003 Report Share Posted May 2, 2003 a-English b-French c-Norwegian d-Portugese ..............Want to use a lifeline? Edit-oops got an unintentional smiley in there. Link to comment Share on other sites More sharing options...
Charmin Posted May 2, 2003 Report Share Posted May 2, 2003 I'll make it a turd of a turd with french - Doc's hometown in Canada somewhere near Quebec city ----- I can't believe someone could be so bullish on the broads at this point - I must be missing something - maybe we get a presidential rally out of this and flop Link to comment Share on other sites More sharing options...
Guest Posted May 2, 2003 Report Share Posted May 2, 2003 Interesting studyy from Mr Saville as why gold stocks weaker than POG... Comments welcomed here!! A bearish message from the gold sector? Over the past week we've seen the first bearish action in the major gold stocks since the Amex Gold BUGS Index (HUI) bottomed on 13th March. We say this not because the gold stocks have pulled back (pullbacks are normal and are often 'healthy'), but because they have pulled back sharply relative to the gold price. The recent weakness in the gold stock indices can be partly attributed to strength in the South African currency (Rand strength is putting substantial downward pressure on the prices of the SA gold stocks). However, the below chart of the NEM/gold ratio (the Newmont Mining stock price divided by the gold price) confirms that there is more to this pullback than just Rand strength (NEM is not adversely affected by Rand strength but it has significantly under-performed the gold price over the past week). So, what's wrong with the gold shares? When we look around at what is happening in other markets the lousy action in the gold shares doesn't make a lot of sense. In particular: a) A weak US$ combined with a firm stock market provides the ideal environment for gold shares. Over the past week the stock market has edged higher while the US$ has been soft, so this was a period when gold stocks should not have been unduly weak. Although the overall stock market has been reasonably firm over the past week it has probably already reached an important peak or is within 2-3 days of doing so. This is a time when the performance of gold stocks should be improving, not deteriorating. c) Gold's price action has been constructive, suggesting that a higher bullion price is likely over the next few weeks. The only relationship we monitor that does provide a possible explanation for the weakness in gold stocks, not just over the past week but also over the past 3-4 months, is shown on the following chart. The chart compares the TSI Gold Stock Index with the yield spread (the yield on the 30-year T-Bond minus the yield on the 13-week T-Bill). Gold stocks tend to move with the yield spread, that is, they rise when the yield spread is rising and they fall when the yield spread is falling. Note that the rally in the yield spread that began last Sep-Oct failed to make a new high (above the May-2002 high) and that the yield spread has been edging lower over the past 2 weeks. As to why gold stocks often trend in the same direction as the yield spread, we can think of two possible reasons. First, one of the main differences between the yield on a 30-year bond and the yield on a 13-week bill is the inflation premium that is built into the bond yield. So, when long-term interest rates rise relative to short-term interest rates it could be because investors' inflation expectations are rising. Second, when the investment demand for short-term Treasury debt increases relative to the investment demand for long-term Treasury debt, causing short-term interest rates to fall relative to long-term interest rates, that is, causing the yield spread to rise, it can be a sign that investors are becoming more risk averse. Another way of saying this is that long-term bonds are inherently more risky than shorter-term bonds, so when money is flooding into short-term debt at the expense of longer-term debt it means that investors are more worried about the future (they are less willing to make long-term bets). Gold stocks, in turn, tend to be favoured by investors during those times when the general confidence level is low/falling. Whatever the reason for the recent weakness in gold stocks relative to the gold price, it shouldn't be ignored. As such, in the Weekly Update we suggested that it would be appropriate to do some selling of trading positions in gold stocks. In other words, it would be appropriate to take out some insurance. If the past week's price action in the gold stocks turns out to be a storm in a tea cup then the stocks that are sold now can be re-purchased if the HUI moves above last week's high (131.5). If the short-term bearish case is confirmed over the next week or so, either via the HUI closing below Tuesday's low (120.44) or via continued weakness in the HUI relative to the gold price, the long-term bullish case for gold stocks would be unaffected. However, a drop to well below the March low would become likely. Current Market Situation During the past month our expectation has been that the gold price would trade up to around $360 over the coming 1-2 months. At this stage, gold has done nothing to indicate that this view is off the mark. For example, the below daily chart of June gold futures shows a breakout from a falling (bullish) wedge, a consolidation just above the 200-day moving average for 6 trading days, and then a move above the 50-day moving average. It would be normal for another brief pullback to begin soon from around the 340-345 range, after which a rally to the major channel top at around 355-360 would be on the cards. The only apparent fly in the ointment at this time is the recent weakness in gold shares as discussed above. The Dollar has dropped to a new bear market low. Recall that our forecast is for the Dollar Index to bottom in the 95-96 range (about 2% below yesterday's closing level) during the next few weeks, so we are not anticipating major weakness in the short-term. We are, however, anticipating major additional weakness over the next 12 months. Perhaps the recent sogginess of the gold sector is providing some confirmation that the Dollar is NOT going to collapse in the short-term. Link to comment Share on other sites More sharing options...
Charmin Posted May 2, 2003 Report Share Posted May 2, 2003 Hey SCHROL, where did you get that one How about part 2 of Nate's take on the HUI ratio Goldheart Indicator mid-term and long-term has met in the middle http://www.gold-eagle.com/charts/goldheart.html Link to comment Share on other sites More sharing options...
Guest Posted May 2, 2003 Report Share Posted May 2, 2003 Hey SCHROL, where did you get that one How about part 2 of Nate's take on the HUI ratio Goldheart Indicator mid-term and long-term has met in the middle http://www.gold-eagle.com/charts/goldheart.html speculative-investor.com (try their free trial)..the info is on the interim update an is date 30 apr Link to comment Share on other sites More sharing options...
OldMan Posted May 2, 2003 Report Share Posted May 2, 2003 Interesting studyy from Mr Saville as why gold stocks weaker than POG... Comments welcomed here!! Here's my take on it: The $USD has dropped quite a bit during the past few days, so a little bounce wouldn't be a big surprise. This could pull gold down, and with it the $HUI. This possibility may already be factored in (in the $HUI). OldMan Link to comment Share on other sites More sharing options...
Charmin Posted May 2, 2003 Report Share Posted May 2, 2003 I get reminded of what Richard Russell said awhile ago about Buck - gold should be $400 about now with Buck as low as it is - that smacks of POG being held down Richards latest comment: Subscribers must note how tentative, how reluctant, the gold shares are to react to any better action in gold, the metal. This is typical action during the early phase of a bull market. It's obvious that the public is not in the gold shares (do any of your friends own gold or gold stocks?), and thus gold shares are being bought by only the most enthusiastic element of the "gold-bug" fraternity. This has meant that buying of gold shares has been tentative, sporadic and erratic. With years of denigration and bad-mouthing by the central banks of the world, the public is hardly going to turn bullish on gold in a matter of a few weeks or months. It's going to take a long period of "good action" by gold before the public and most funds become "friendly" to gold and gold shares. http://www.321gold.com/editorials/russell/...sell050103.html ----- so, if buck doesn't factor heavily into the POG equation because POG should be a lot higher with buck down then where does our leverage come from in the shares? at least for the moment while everyone waits to see gold get over $350 and stay there Link to comment Share on other sites More sharing options...
Charmin Posted May 2, 2003 Report Share Posted May 2, 2003 dropping p/c - so, answer me this - does this tell us that half the action in the shares is from shorts covering? http://www.schaeffersresearch.com/streetoo...y_OIPCRatio.asp Link to comment Share on other sites More sharing options...
SevenOfEleven Posted May 2, 2003 Report Share Posted May 2, 2003 Interesting studyy from Mr Saville... <Library of Congress> ...in the short-term. Interesting reading but I got a stye in my eye now *owie* please tell Saville that reader's digest wasn't just a fad Link to comment Share on other sites More sharing options...
Charmin Posted May 2, 2003 Report Share Posted May 2, 2003 TIGGY was looking for 96.15 for any bounce - this is his chart with a closeup view for buck Link to comment Share on other sites More sharing options...
Charmin Posted May 2, 2003 Report Share Posted May 2, 2003 last friday Bernie S had some concerns about the gold contract and the 50 day ma and it not breaking above it. http://www.schaeffersresearch.com/schaeffe...ons.asp?ID=7562 guess what Bernie and what does he think now http://www.schaeffersresearch.com/schaeffe...ons.asp?ID=7593 Link to comment Share on other sites More sharing options...
SevenOfEleven Posted May 2, 2003 Report Share Posted May 2, 2003 Here's an update of this chart. Do we expect a snapback to the bottom tine? To the centerline? None? Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.