My contribution to gold traders...this free site is very informative and he makes accurate calls and analysis. http://jsmineset.com/
A sample for the gold bugs out there. Posted On: Thursday, March 22, 2007, 5:40:00 PM EST Gold and Dollar Market Summary Author: Jim Sinclair Dear CIGAs, The script has played out so well that $682 and $761, which seemed so far away to some only a short while ago, is now in the crosshairs of the price of gold. The USD, which may take the title away from Fannie and Freddie as the âslowest train wrecksâ in history, gained a little in an inside day at the paltry .8281. The yen weakened as the media discontinued its blasting away at the yen carry trade nonsense where gold is concerned. Instead they were mesmerized by the discovery of the housing flop as if it did not exist two weeks ago. I wish I had some breaking inside news to offer you tonight, but today we have only success. Once again to you gold traders, you must have 24 hour access or you are crippled in your attempts. Gold last night traded between $665.50 and $658.00. That alone is a trading opportunity comparable to fish in a barrel as indicated by trend lines. Anyone that feels gold shares will not at some point in this run here and now outpace gold is simply living in a dream world devoid of experience. The invention of Hedge Funds was the end of the level playing field. The condition of regulation in this area simply does not exist. It is the hedge funds run by the gold-phobic numbies that have made their progress difficult so far. What is forgotten is that capitalization of the entire gold group does not equal the capitalization of two of the leading bull chips. Money is heading in that direction with the result being comparable to backing up a commercial hauler to a teaspoon. The carnage in the gold field will be greatest for the gold short of shares. Many modestly priced gold shares have large legal and larger illegal short. What has never been considered is that a short of a $7 share offers only $7 potential profit with infinite risk. When dealing in minerals, one day can make a new company and the short is screwed beyond their wildest dreams. It will happen. The most important factor in this market is the impact on tax revenues that the Formula accurately outlines. There is no escape from the explosion of the Federal Budget deficit caused even by the present fall off in business activity. Revenues tax wise come like cream a float of 90% of the business turnover. You drop a few percentage points and you wallop the amount of taxes paid. This quote from the following article condemns the Budget Deficit to a space launch. It precludes the US dollar well under .8057 as measured by the USDX. It calls for a higher all time high on the price of gold in dollar terms. It totally ends the dollar experience as the Universal Reserve Currency. âWeakening consumer confidence and scaled-back construction plans drove a measure of the U.S. economy's future course down by the most in a year last month.â
Blew out of the April gold futures at 668 off that 770 move on Wed. Time to see it settle back and reload again for the march upward. Bring it on and watch the bears get crushed.
I bought the put on 2/26 (the Monday before my post above) and closed it on 3/3, the day after my post. I decided the straight down move was too great of a "gift" and that a retracement was likely, so I covered. I'm currently holding a June 650 put I bought on 3/20. With a couple months to go before expiration, I can be patient for awhile. Yes, I'm still bearish. There seems to be no real concern about the downdraft (the same is true for the stock market), and the bulls are still trotting out all their experts and reasons why gold just HAS to go up. My rationale from 3/2 remains, so I'm still short. Time will tell, as always.
If I were long, that would concern me. After all, if everyone's bought, only sellers remain, right? Of course, the bulls are content right now, because they have the comfort of being in their happy, consensus driven herd.