Stock Picks
- Thread starter Gyp Rosetti
- Start date
I don't follow currencies but PM has been going down so I figured as much.
I can see gold decoupling from industrial commodities too. A long-short hedge makes sense but I don't do this sort of thing. Actually, this would be my first short ever. I've been watching and waiting for a very long time and see a really good setup unfolding.
There are too many variables and wild cards (ex:Russia and China) for me to form much of a respectable thesis. I'm going on gold being nearly useless and overbought purely on emotion. The emotional tide always changes and I think people are becoming more comfortable with QE. There will be a snapping point in gold and I can only hope to get lucky and time it right. I'm going on gut feeling, combined with some pretty primitive TA (a series of slightly lower highs seem to fit my theory well enough). Plus, I put a high probability that the systemic shocks are well behind us. This means gold's upside and thus my risk is comfortably limited.
Really? based on what?
As far as I can tell most economists have been fine with the QE.
Not to step on Franklin here, and I'm sure he'll answer for himself, but I think the idea is that the people buying gold were the people who freaked out over QE and those people weren't really listening to economists that were fine with it.
If those people calm down they may realize they're sitting on an overvalued asset.
What he said.
To add, you're wrong on most economists being comfortable with it. This has been an extremely controversial policy. Many demand siders were comfortable with it, but not all. Supply siders aren't really the type to embrace it at all. Also, a lot of bankers, hedge fund operators, industry strategists, and talking heads have been very uncomfortable with QE. Many of these people help move gold and have serious influence on the market.
Examples: https://www.guardian.co.uk/business/2010/nov/15/us-economists-open-letter-qe2
Joseph Stiglitz is another big name. https://www.telegraph.co.uk/finance...tz-Americas-QE2-poses-considerable-risks.html
David Einhorn bought physical gold.
Eric Sprott, but he's a gold bug anyway.
John Burbank.
The most notable is probably Tom Hoenig from the Federal Reserve who has openly dissented from the other 10 for quite some time.
Read the last sentence from Martin Feldstein https://www.nber.org/feldstein/projectsyndicatenovember262010.pdf
If you want more then google things like "crowding out" and "QE trade war". I'm sure there is enough to keep you busy for days.
I knew our resident goldbug would come out of the woodwork today.
Depends on the time frame. The long term trend is still in motion. Next few days, weeks, or maybe months not so much. Breaking the 50 day moving average after a triple top is not a good sign, especially against the back drop of significant public participation. The dollar has got hit and commodities have been climbing higher and now predictable chatter about world wide food inflation should be sending gold to fresh new highs. When the correlation breaks down and an asset class doesn't do what it supposed to it is a huge red flag.
You have an 8% immediate downside risk to the 200 day moving average. As often does, the 200 day is right on the trendline from the 08 and last summer's lows. If that support is broken, you are looking at probably a 30% correction.
Be careful, certainty is the worst attribute one can internalize as a trader.
Personally, I think we bounce and rally off the 200 and rally back to some approximation of the most recent high. I believe the top will take longer than most think. Most are expecting a bursting of the bubble. But that is just a trading template going forward.
There is a case based on previous price action in other asset classes that result in large bubbles that gold could double here, however, the long term chart of gold is an absolute disaster from a technical analysis stand point. As of now, jury is still out. I suspect the easy money has been made for the gold bugs.
If anybody has any rudimentary technical analysis skills, they would never be a serious investor, long term holder of gold with that multi-year chart. That has disaster written all over it. That is right out of the internet, Japan, real estate, and 07 commodity bubbles.
https://www.mrci.com/pdf/gc.pdf
I hope that link works
https://www.mrci.com/pdf/gc.pdf
I hope that link works
Einhorn has surprised me with his gold position. The rest of that crew is worthless. Einhorn is a frickin stud.
Gyp Rosetti
Banned
Einhorn's Finkel? Finkel's Einhorn?