Posted on 09/23/2007 1:50:53 AM PDT by joefrocks
The gold traders who know what they're doing, the savvy usually non contrarian gold Commercial Traders, are going massively short. They added a very respectable 17,083 short gold futures and options contracts in the latest report/5 day period ending 9-18-07, and, a massive 52,000+ short gold futures and options contracts in the previous report (possibly the largest weekly change I've ever seen), while also trading long in recent weeks (added 1303 long futures and options contracts in the latest report for the 5 day period ending 9-18-07, and, over 10,000 long futures and options contracts in the previous report), see the last/third data at COT Data.
This jives with HUI/XAU possibly putting in very important countertrend Wave B (of the Wave 2 Cyclical Bear Market since 5-11-06) double top cycle highs early today/Friday 9-21 (5 Day HUI Chart), with HUI putting in (potentially) a bearish double top at 402.27, only 0.14% above the Wave 1 Cyclical Bull Market cycle high at 401.69 on 5-11-06, see HUI Chart, and, with the XAU putting in (potentially) a bearish double top at 173.17, only 0.85% above the Wave 1 Cyclical Bull Market cycle high at 171.71 on 5-11-06, see XAU Chart. The huge spike move since 8-16-07 is typical of what happens near very important cycle highs.
Also, the NEM Lead Indicator is SCARY. The NEM Lead Indicator = +0.07% versus the XAU today/on 9-21, -1.46% versus the XAU on 9-20, +0.69% versus the XAU on 9-19, -2.33% versus the XAU on 9-18, -0.53% on 9-17, +0.12% on 9-14, -1.34% on 9-13,+0.02% on 9-12, +0.25% on 9-11, -0.69% on 9-10, +0.42% on 9-7, -1.39% on 9-6, +0.06% on 9-5, -1.81% on 9-4, -0.98% on 8-31, -0.03% on 8-30, -1.86% on 8-29 = an extremely bearish -10.79% versus the XAU the past 17 sessions, see six month NEM Lead Indicator at NEM Lead Indicator Chart.
While Wave B cycle highs technically should be below the "ultimate" cycle highs, the market isn't an exact science (definitely a science though), indexes' components are changed periodically, and, often cycle highs will occur in dramatic rollover mode, that's very similar to a countertrend Wave B upcycle (basically the same as a Wave B when double tops occur, which is what might have happened today with HUI/XAU). The point being that, if one was in a basket of HUI or XAU components, the time to sell was in May 2006 not September 2007.
HUI/XAU should head down to their primary multi year Secular Bull Market (since late 2000) trendlines at 220ish and 90ish in the next 3-6 months, see charts 7 and 9 at HUI/XAU Charts. Gold should head down to it's primary multi year Secular Bull Market (since April 2001) trendline at $475-500 in the next 3-6 months.
Fundamentally, the current deflationary real estate/mortgage bust is a major negative for gold, just as the inflationary real estate/mortgage boom from 2002-2006 was a major positive for gold, coinciding with gold's Wave 1 Cyclical Bull Market from April 2001 until May 2006. Gold does well in inflationary economic cycles and gold does poorly in deflationary economic cycles, which is pretty basic stuff that a true gold analyst would understand.
Just curious if you don't mind. What are your "suspicions"?
I’d tell ya.......but then I’d have ta...you know.
There is always a way to save face and make it nice.
I have nothing to “save face about.”
I guess I was speaking about your paranoia that you display. Loosen up a bit.
Acknowledging past “popcorn” comments is not paranoia.
Including a “lol” indicates a sense of humor about things, to most people. I guess that was lost on you.
Oh well.
I'm no gold bug but I do own both GLD and CEF. I'll sell them both under the 200 day MA.
The offer to voice your "suspicions" is still open.
LOLOL!
It would serve no purpose. You have already dragged a comment long enough.
That is fiat money(central banks) worst fear. They will do everything in their power to hold gold down. It won't work.
What's the matter with you? You arrive on a thread with nothing to say.
???
I'm still trying to learn, so I want to get comments from as many different points of view as possible to form the most complete synthesis.
Cheers!
I was PINGED to a thread, and did say something.
You’ve said more than is necessary, and I have nothing more to say about that or this thread.
Why would central banks want to hold gold down?
Downward Economic Spiral Gains Momentum Faster Than Expected
Author: Jim Sinclair
My Dear Extended Family,
Looking out the window you can see that business has rolled over but there are no beggars on the street. Many of the new kids wonder what all the noise is about concerning recent developments. The answer is that the foundation of economic activity, the credit markets, has been broken and cannot be put back together for a considerable amount of time.
There is one and only one tool that can work to camouflage the damage until after the election. After the election and assuming the more liberal party wins the problem will only worsen in terms of fiscal stimulation.
I have for a long time told you that monetary inflation comes first and without any exception causes price inflation that few can understand.
Price inflation always seeks out the hot market, making it hotter. Once it was equities, once it was bonds, once it was derivatives but these are not now the hot-comfortable place for participation.
The place drawing in the price inflation is commodities. You haven’t seen anything yet. I say that because the US dollar is now buffeted by a ragging commodity bull and the start of lousy business.
Business is going to crater for one reason. Its foundation and the foundation of free enterprise, even personal free enterprise, is the availability of credit. The credit system is totally decimated, ruined and broken.
You can be sure interest rates are headed for zero and fiscal spending is going skyward even if it takes another war to accomplish that.
The US will under the edict of a preemptive strike attack Pakistan if a clandestine relationship between management and the Taliban/al Qaeda takes shape.
Intelligence agencies as you can see are painting this picture. They have closed off the Iranian situation because of the investment there by large and influential others. Pakistan is on the front burner and truthfully may well deserve that distinction.
The minor magnet pulling at gold is $961. The major magnets are $1050 and $1650.
This is happening faster than anticipated making me think that I may be wrong in my suggestion $1650 is the high side target. As we see what the market wants to do and when it wants to do it we will discuss what new magnets develop.
This time gold will not crater after reaching its maximum market valuation. I have already shown you the vehicle that will prevent that while preserving the values for the real force behind all of this.
For the time being know that the expansion of fiscal and monetary stimulation must continue. There is no choice in that. It is mandated by the broken credit system.
Nothing can stop the march of gold up or the march of the dollar down. Monty and Dan have identified the return of dollar that has muffled its decline here, however I believe that the pressure downward is so much greater than the inflow that the US dollar has no chance of making any real gain. The potential for a total flop is much higher than any improvement.
Keep this all in mind when you start to panic as many of you did a week ago.
Gold is going without any doubt in my mind to $1650, a magnet that was originally published in 2000 and has not been altered since.
Below is a reposting of the valuation model I did for you recently on your gold shares.
When you wish to vomit it is the bottom of whatever you are contemplating vomiting over. The rises in a commodity price take all shares representing that commodity with it, first to reflect and secondarily to predict future increasing prices in the commodity itself.
For those of you that believe I can be beat or am wrong in any of my activities, know that I do take it personally. Know you haven’t connected the dots as I advised you to do. Know I will win this game as I have many times before. Know your risk is infinite while mine is finite and defined.
I will prevail and multiply in this battle because I have the ammunition of knowledge; that, I promise you. This I am dedicated t -.it is my life experience.
I am half Irish and half Jewish so clearly I love to fight and make money.
Respectfully Yours,
Jim
Because the more valuable gold is the less valuable their leveraged (& debauched) currencies are.
For those of you that believe I can be beat or am wrong in any of my activities, know that I do take it personally
Jim, you're an idiot. But don't take it personally.
I’m no gold bug but I do own both GLD and CEF..........
Then you should get Jim Sinclair’s emails and visit his website. He is old and wise counsel
It is not a gold Bull market. Gold stays essentially flat except in speculative times when it has some peaks and dips. The average runup is really a flat line. The nominal money value chart laid on a basically flat gold chart is much more informative.
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