Sunday, December 13, 2009
Gold Bulls
The Commitment of Traders chart shows a lack of bearishness despite the recent swoon in gold. The data is from close of trade on Tuesday, so it doesn't include the drop on Wednesday and Friday. Despite the big drop on Friday Dec. 4, it shows that commercials barely budged from their bearishness and speculators hardly dropped their level of bullishness. This is unusual behavior among commercials, who tend to fade the short term price movements. I think its a matter of time before gold drops below 1100. Probably will happen this week. Chart is from cotpricecharts.com.
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3 comments:
Elliot Wave Theory says that mkt rallies have five stages. Looks to me like we are in stage four.
If the market does what it does in 04, there is not much downside. And by the end of next year, we could have real 3% GDP growth that's not fueled by govt cheese money.
Even if the FED raises to 50 bp's, that's still very low historically.
What was the rate when Greenspan raised rates to kill the 00 rally? Like 5%?
Half a percent by the end of next year? Hahahahah. That's nothing.
We have a long way to go before equities become unattractive from discounted cash flow valuation.
If we go down in February/January, I see around 1000 +/- 50 bps.
I think the mkt moves based on expectations.
Given there is no Six Sigma event or other huge catastrophe, I think the mkt is going to be a self fulfilling prophecy.
All the strategists are saying 1200 by the end of next year, and 5 to 10% on the next pullback beginning of the year.
I don't think they were calling for collapse in 08, however, because of that investors will be wary of the downside and are much more vigilant this time around.
These expectations are baking in the possibility of any collapse, which was not the case in 08.
Abu Dhabi stepping to da plate with 10 bln. Futures up big. 1150 coming?
Bears are toothless. They are getting played like ragdolls. We are near the top of the range, probably worth it to short it and see if they can bust through. They haven't been able to for over a month.
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