Long-time readers of this journal will know that my main long-term position is a pair of (long gold + short S&P 500), with the view that the debt problem, not just in the US, but in many developed countries, has not yet been resolved properly. The pair hit a noticeable peak in August 2011, when there were significant concerns about (1) Europe and (2) US debt ceiling. Since then, the pair has done poorly, declining to levels last seen in April 2011. Before today (Thursday 17 January 2013) I haven't paid much attention to the story about Germany repatriating some of its physical gold holdings. However this morning I noticed that gold quickly rebounded from the declines induced by the decline in the weekly jobless claims number. It made up all of those losses, and then broke out above multi-day resistance of 1685. The articles about Germany repatriating its gold make for interesting reading, but ultimately they can be summed up by a tweet from Bill Gross: http://www.zerohedge.com/news/2013-01-15/bill-gross-gets-it https://twitter.com/PIMCO/status/291211759207985153 "Gross: Report claims Germany moving gold from NY/Paris back to Frankfurt. Central banks donât trust each other?â PIMCO (@PIMCO)" Links: Germany http://www.zerohedge.com/news/2013-...sbank-commence-repatriating-gold-new-york-fed Netherlands http://www.zerohedge.com/news/2013-...triation-train-first-germany-next-netherlands Goldcore (biased obviously, but still relevant) http://www.zerohedge.com/news/2013-01-17/germanys-gold-repatriation-unlikely-assuage-public-concerns Next resistance: 1690.50 is the high from January 3, the date when the minutes of the December Fed meeting were released. 1695.40 is the high from January 2, the day when risk assets went up by a lot on the fiscal cliff news.
Also this article: "Gold Breakout In Process, Thanks To Germany" http://seekingalpha.com/article/1117301-gold-breakout-in-process-thanks-to-germany
Yes of course, I should have been clearer with my discussion above. I did not mean to say that the German repatriation news is the only reason (or even a reason) for gold's strength this week. Rather, it is an interesting indication that over time, people are questioning the validity of paper currencies that can be created in limitless quantities. This is bullish for gold. Furthermore, the ability to recover from the weekly jobless claims number losses, and break above 1685 indicates technical strength.
I am short AMZN and LNKD and NFLX. I am considering shorting some other high-valuation stocks: CRM, N, WDAY, NOW "It Feels Like The Dotcom Craze All Over Again" http://seekingalpha.com/article/1134651-it-feels-like-the-dotcom-craze-all-over-again I don't agree with everything Paulo Santos has written, however, he does make some good points, especially with regards to the likes of AMZN and CRM.
http://www.zerohedge.com/news/2013-02-01/state-world-macro-glance Bookmarking this page of economic / financial numbers for future reference.
http://www.zerohedge.com/news/2013-02-11/goodbye-bond-vigilantes-hello-brent-vigilantes "Goodbye Bond Vigilantes, Hello Brent Vigilantes" Brent oil above $120 could start to make things difficult for equities, and in particular, transport stocks. Transport stocks are the clichéd "canary in the coal mine" with regards to how the entire stockmarket will react to higher oil prices. If and when transports (eg airlines) start underperforming the entire stockmarket on a multi-week basis, then it's likely higher oil prices are hurting. IYT (transport ETF) looks fine for now. $XAL and FAA (airlines index and airlines ETF) look a little less strong, and may have reached a multi-week double-top. Time will tell if this is just consolidation before a move higher or an oil-induced peak.