The always persuasive and resonable Theresa Lo has this to say about gold recently. http://powerswings.com/2006/09/23/the-case-for-gold/ No end of the world , gold to $5000 stuff here, so if that's your 'bag' don't bother.
thanks for the link ... she should be more often featured at those trader expos ... that get some of the other so called gurus not that she is a genius or that the others are either but she probably is an entertaining speaker and knowledgable gal in chart reading
Some say: The last major bubble, real estate, has trapped the remainder of the publicââ¬â¢s reserves and we are headed into a period of deteriorating growth and lessening liquidity. We are about to enter one of those long bear periods and the global cooling off indicated with the bust in oil prices and gold dropping $150 is the early warning signs of what will come out of the current real estate crisis. the ââ¬Ëbaby boomââ¬â¢ generation has basically peaked in terms of home ownership so over the next 10 years we will see massive excess supply of homes for sale with no buyers in sight. This will compound the liquidity problems for stocks, bonds, and the economy. Money flow to SPY and tops of index funds(more liquidity less exposure) Don't be short above 1320 S&P this month. DON'T be long mid Oct to early Nov
First off, a reasonable gold commentary! Rare in this sector. Agree with her thought process on trading this range. Second, I would argue that this october/november is not likely to be anything but bullish given upcoming elections. Continued pause, with some of the economic #'s looking QUITE soft. Housing debacle will unquestionly demand a drop in interest rates on the short end of the curve if to do nothing but inject liquidity into the system. OTOH, longer term OTM puts are fairly cheap (in cash terms, not necessarily vol) and if you are willing to burn the theta, might be a nice time to pick up a few as a portfolio hedge or outright two or three sigma spec play. Third, while I do think that the demographic issue is an important one, there are a few issues: #1. Immigration is a longer term help to that problem. Of course, not if we chase them all home. #2. The pension reform bill MAY have similar effects to the failed effort to reform social security and allow private accounts which would have spurred investment in the equity markets among the younger set. This MAY convert traditional DB pension plans which had certain restrictions on investment to IRA's which don't. #3. Target date for a mess due to demographics is 2010-2012 from everything I've read that has some economic teeth behind it. Hmm,that's interesting about the pension reform bill. I think I'll post that over in economics.
I agree, with some reservation. The next six weeks should lend more insight into the cycle we'll follow and the direction US and global markets will move.
while i agree with some of her ideas and especially about trading it objectively and not loving the shit while it falls apart in your account (cough cough qg) - she fails to adress: 1)supply>demand 2.) the dollar has been tanking despite the past 17 interest rate hikes which is supposed to be good for the currency. take a look at the major currencies that make up the usd index - they are all super bullish bull flags mostly on the verge of breaking out. when they break - gold goes up. the correlation is inverse. overlay a chart of the dollar and gold so not sure where she is going with that on if growth is slowingin the us - sure its not good news for the rest of the world but its worse news for the usd. as for slowing global growth - china, india, brazil, russia are still going to grow 2 to 5* faster than the us... 3.) The biggest bag holders (currency reserves) of USD are openly admitting to diversifying out of USD this year and into gold. This demand alone could lock up next years supply of gold. Imagine what kind of price increase that could bring....India China to name a few 4.) Production is dwindling despite increases in price. 5.) Geo political strife is only going to get worse.... Iraq. Iran. Israel/Lebanon, Korea to name a few... 6.) Huge short positions in gold and silver whether they be gold producers hedging or big money manipulating the price or whatever - eventually they will panic and get squeezed out I dunno - I see this as all very bullish for metals and gold and see weakness as a buying opportunity... I am not over the top - but i have 14 or 15% of my portfolio in high quality metal names (used to be 8% but just grew and grew and was 18% before this fuckbag pullback). i bought some siler a while back too and want to hold that for decades so am not to stressed about price wiggles. i dont like it - but i am not too stressed.... anyway - my two cents... best nne