...About gold.
The support line I wrote about held for a couple of days and was then breached like it wasn't there. Several readers called me out as being wrong, good for them. Perhaps it was the blow to the head I took?
The market is below is 200 DMA. I posted yesterday about selling one stock at the close. Given the cash raised recently I may hold off on anymore sales today, I if I do sell something I will let you know.
The dollar is getting hit on that durable goodies number, which makes the gold decline puzzling (but makes me no less wrong).
Ed Keon now says equities are cheap? This guy is wrong more often than any other person with a similar title. Here I think he is trying to catch a falling knife.
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6 comments:
Roger, my sense is that the gold/dollar link has been weakened by the unwinding of futures bets fueled in part by the Japanese carry trade. Those bets were in commodities other than gold too of course. I think Jubak is largely correct when he surmises that tightening by the BOJ is also responsible for the hot money leaving emerging markets.
Countervailing factors aside, if the dollar continues to slide and US markets fall as well then that is very negative from my POV. Rising interest rates, relatively low equity yields, increasing market volatility, compressed leadership, etc. make for a very poor risk/reward profile IMHO.
Not making any predictions, just don't care for the odds and have raised cash and hedges accordingly; need to see some clarification of trend before making any further allocation decisions.
Roger:
How about Steven Roach and Richard Bernstein- weren't they bearish through the 3 year bull run and turned bearish at the top a few weeks ago- and how come they dont go on cnbc and defend their position
RW, you may be right this time or not but good discipline is always the right way to go.
David,
fair question. I will say that Roach is on CNBC Europe a lot. Maybe the bookers for US CNBC don't want him on?
Roger, you were not wrong about the support. It held, and then it broke.
That's what support does.
If support didn't break, and if resistance wasn't conquered, we would forever be stuck in a range. Or, in trends that would never end.
Support and resistance are really probabilities . . . nothing more.
Gold will be up tomorrow. You can tell by the last hour of trading - it's strength was a preview of tomorrow's open. This bird flu hoax will only fuel a renewed interest in metals after this 15% pullback.
Roger-
It's nice of Barry to drop in.
I've been calling for support at 640 area. That's what the chart-read says as that is intersection of congestion and Fibonaci retracement levels. Third attempt at breaching it this morning failed. All the while the junior miners had firmed and did not confirm new lows for gold. XAU and HUI had already tested support previously. That is a bullish sign.
I usually post at Cara's site. Readers there would recognize the calls.
(I also advised waiting for your entry on SU. Trendline said 72ish.)
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