The good ole USO and the GLD

Discussion in 'Stocks' started by michaelscott, Jun 16, 2007.

  1. I am back from my business trip and looked at how things did on Friday.

    It appears that oil has escaped out of its indecision triangles and is now poised to go much higher to the 70s. I believe a breakout will take it to 77 dollars shortly making the USO a worthy consideration.

    I've had several theories on oil over the last 6 months. One theory was that there was a macro move correction occuring. Then we got hit with several formations on the chart that left me questioning if that theory was truely correct. On Friday, the picture became clear and now I believe oil will now be able to continue its trek up to over 100 dollars per barrel. I have created several models on the ultimate target price. Conservatively, the ultimate 1 year target is 110, a more liberal valuation would place it at 130.

    Many people think and believe that the demand from abroad controls the price of oil or maybe some guys with a bunch of guns in Nigeria. The real factor is rig counts. The number of rigs has expanded, but there are still too few in the world to make a real difference. As with price, the number of rigs in the world can be accurately charted and analyzed with standard technical analysis.

    Now with the GLD, I am truely in indecision. Gold will continue to fall and there are three obvious levels on t the chart. You have the 200 day MA, 625 level, and the 550 level.

    There are some things that in my mind I am most certain. I have been certain for the last 6 months that Berrnanke would raise rates and that inflation would become out of control. Inflation is now out of control (unofficially). On the reports we have a different picture evolving then what is happening in the real world. The Bush administration is corrupt, absolutely, and I can only imagine some tricky Goldman Sachs guy like Paulson somehow having access to these reports and manipulating reality. The reality is all too clear by walking the streets and visiting the stores. The reality is not within the reports.

    If the GLD is able to pivot off of the 200 day MA or the 625 level then it might go much higher and probably to the 900 level.

    If the GLD falls below 625, then surely it will hit 550 unless there is a good old fashioned bear trap as I know many will be shorting under that level and some might get caught in the snare.

    The huge triangle tells me that price is contracting into a tight range and there will be a breakout eventually. This triangle also tells me that Gold traders are in indecision of how all these factors will ultimately effect the price. If the price starts to expand then the expansion could lead to a breakout either way and a situation that I will be actively monitoring.

    I feel as if we are in the 70s again during the first 6 years of the chop. Gold and oil slowly moving upwards. The ten year moving upwards as well. The SPX doing a dance up and down meeting back at a certain line in the sand again and again. One picture being painted by government reports yet another picture evolves on the streets of America. A war going on in another part of the globe where the purpose unclear.

    The reasons why I turned bearish on the SPX is simple. Its not because of an individual chart, but a confluence of factors. How can the SPX rise much further with both oil and yields in super-cycles? Something has to "give". It cant last forever like this. Pick one, SPX, TNX, Oil, Gold...Something has to fall, it is not possible for all to rise in lockstep for any extended period of time. My bet is on the SPX to fall...
  2. Here is my master gold chart.
  3. You should be telling this to your therapist. He can give you the help you really need since it appears you're having hallucinations and delusions.

    Why you keep ignoring your AAPL, GOOG, MA, and RIMM shorts?

    DId you cover AAPL and GOOG yet?

    No one takes you seriously because you're a flipflopper. One week you will rcommend a set of stocks and then completely ignore them without following up on them.
  4. $80 barrel max. At this price alt. energy comes back into play.

  5. The Gold/Oil ratio is now below 10 barrels per oz of gold. This is very low historically, and usually not sustainable. The ratio usually averages around 14-15. This says either lower oil, higher gold or both.
  6. You ignore me everytime I ask you how old you are. I also told you my returns after all your endless drivel and you didn't respond. And FYI stupid, GOOD and AAPL are shorter than when he wrote that, no?

  7. I'd like to hear more of this oil/gold ratio. Do you have a link or other information?
  8. Interesting, as oil price rises tend to lead higher inflation numbers, and gold is of course an inflation indicator.
  9. Here are the relationships I am looking at.

    Draw your own conclusions. I say oil rises to meet up with Summer 2006 levels and then makes its decision to pivot higher from there to the 100s.

    Gold will turn down to 625 and will test that level before deciding if it wants to advance upward through the triangle or downwards to test the 550 level.

    USD- US Dollar will strengthen from here.

    DJIA- Rising dollar, rising oil, higher rates and lower gold mean chop and fall.
    #10     Jun 17, 2007