Market Discussion

[David Randolph]

Viewing the news from an historical perspective, instead of common sense:

U.S. consumer confidence plummets in February
Expectations hit a 17-year low on job, economic worries

U.S. consumer confidence plummets in February
Expectations hit a 17-year low on job, economic worries

17 year low means that the last low was in early 1991. Here's where the market was back then and what happened next:

[Garoh]

Really Excellent work david 

[BigSully1]

U.S. dollar hit a new low today. Got gold?

[Garoh]

U.S. dollar hit a new low today. Got gold?

Yes Gold is very hot
AEM Got it last week for $63 will sell it tomorrow for $70 and wait for a pull back which I expect very soon 

We could see a correction for gold but probably a small one ..

[BigSully1]

U.S. dollar hit a new low today. Got gold?

Yes Gold is very hot
AEM Got it last week for $63 will sell it tomorrow for $70 and wait for a pull back which I expect very soon 

We could see a correction for gold but probably a small one ..

Why sell it now when the dollar just broke down and hit a new low and inflation is skyrocketing? Forget your anticipation of a correction in Gold and look at the bigger picture. I'm in for the BIG ride.

[David Randolph]

Why sell it now when the dollar just broke down and hit a new low and inflation is skyrocketing? Forget your anticipation of a correction in Gold and look at the bigger picture. I'm in for the BIG ride.

I've been a bull in Gold since 2001 when $GOLD was at $250 and I think the big ride already happened.

Inflation is happening just in selected parts of the economy and it will continue to be contained in my view.

I remain a long term bull in gold, but one needs to consider that Gold's bull market is aging, it's not a new thing and everybody already knows about it.

[BigSully1]

Why sell it now when the dollar just broke down and hit a new low and inflation is skyrocketing? Forget your anticipation of a correction in Gold and look at the bigger picture. I'm in for the BIG ride.

I've been a bull in Gold since 2001 when $GOLD was at $250 and I think the big ride already happened.

Inflation is happening just in selected parts of the economy and it will continue to be contained in my view.

I remain a long term bull in gold, but one needs to consider that Gold's bull market is aging, it's not a new thing and everybody already knows about it.

Everbody keeps thinking it is in for a correction also . The best time to buy gold again was at the start of the interest rate cuts back in October and thats what I did.. Are you selling your DROOY? And I think inflation is a much bigger problem than you think. I'm keeping my gold, for now anyway.

[Garoh]

Why sell it now when the dollar just broke down and hit a new low and inflation is skyrocketing? Forget your anticipation of a correction in Gold and look at the bigger picture. I'm in for the BIG ride.

I've been a bull in Gold since 2001 when $GOLD was at $250 and I think the big ride already happened.

Inflation is happening just in selected parts of the economy and it will continue to be contained in my view.

I remain a long term bull in gold, but one needs to consider that Gold's bull market is aging, it's not a new thing and everybody already knows about it.

Sorry for replying too late BigSully1

Yes david you'er 100% correct (the big ride is already priced in Gold )
This is what I mean when I said we would see a correction for the gold ..

BigSully1 you'er riding the wave too late  
I wouldn't buy gold at these prices unless I see a nice pull back and that's why I'm planning to sell AEM at $70 .. I'm using my experience in Technical analysis which is saying to me sell at $70  

I maybe wrong , but I try my best to keep my money safe ... I expect gold to reach $1000 , but not in one day , we'll see some up and down moves before that ..
I don't know why I still think we'er in a bear market , we need to clear some resistances on S&P  any way .

[BigSully1]

Why sell it now when the dollar just broke down and hit a new low and inflation is skyrocketing? Forget your anticipation of a correction in Gold and look at the bigger picture. I'm in for the BIG ride.

I've been a bull in Gold since 2001 when $GOLD was at $250 and I think the big ride already happened.

Inflation is happening just in selected parts of the economy and it will continue to be contained in my view.

I remain a long term bull in gold, but one needs to consider that Gold's bull market is aging, it's not a new thing and everybody already knows about it.

Sorry for replying too late BigSully1

Yes david you'er 100% correct (the big ride is already priced in Gold )
This is what I mean when I said we would see a correction for the gold ..

BigSully1 you'er riding the wave too late  
I wouldn't buy gold at these prices unless I see a nice pull back and that's why I'm planning to sell AEM at $70 .. I'm using my experience in Technical analysis which is saying to me sell at $70  

I don't know why I still think we'er in a bear market , we need to clear some resistances on S&P

I'm not riding the wave too late. What don't you understand about me buying gold AGAIN back in Oct/Nov? I don't have the technical expertise you have, but until something changes I won't sell for now even if it does make a minor correction.

[usedcasting]

Enjoy the debate. I'm solidly in the BigSully1 camp. Stagflation is just starting. The financial sector has just started their implosion and oil and gold make a good hedge. This is a long term outlook of course with short term corrections always expected.

uc.

[David Randolph]

Enjoy the debate. I'm solidly in the BigSully1 camp. Stagflation is just starting. The financial sector has just started their implosion and oil and gold make a good hedge. This is a long term outlook of course with short term corrections always expected.

uc.

Thanks for your opinion uc.

I disagree.

Focusing on the SPY, despite all the short term noise, I see the short term trend as bullish. I guess today we'll probably break down below $137 which will throw a lot of weak hands out of board ... but this is just to touch the ascending support line at $136.25. We'll close back above $137 and this time the market we'll move beyond $140 ...

Let's see what the future brings

[BigSully1]

Gold hits new record of $970 on dollar's tumble

By Polya Lesova, MarketWatch
Last update: 11:40 a.m. EST Feb. 28, 2008Print E-mail RSS Disable Live Quotes
NEW YORK (MarketWatch) -- Gold futures rose to a record high of $970 an ounce Thursday, propelled by the dollar's tumble to a new low against the euro.
Gold for April delivery hit $970 an ounce on the New York Mercantile Exchange. The contract was last up $6.80 to $967.80 an ounce.
"The recent string of U.S. data has been appalling and this is putting significant pressure on the dollar and supporting gold," said Mark O'Byrne, executive director at Gold and Silver Investments Ltd., in a note.
On Wednesday, gold rose $12.10, or 1.3%, to $961.0 an ounce. Earlier in that session, the contract hit a record $967.70 an ounce.
Weakness in the U.S. dollar boosted gold's investment appeal. Gold, like many commodities, is denominated in dollars, and a lower U.S. currency makes it more affordable in other currencies.
'The recent string of U.S. data has been appalling and this is putting significant pressure on the dollar and supporting gold.'
— Mark O'Byrne, Gold and Silver Investments Ltd.
On the currency markets Thursday, the dollar remained under pressure as it buckled to fresh record lows against the euro after lackluster U.S. data.
The 15-nation currency rose as high as $1.5194, its loftiest level since it began trading in January 1999, as U.S. Federal Reserve Chairman Ben Bernanke spoke on Capitol Hill for the second day of his report on monetary policy.
While he downplayed concerns that the U.S. economy might be in the grip of stagflation, a combination of low growth and inflation, Bernanke said there would likely be some bank failures, though not large firms.
The trade-weighted dollar index, which measures the greenback against a basket of six major currencies, fell 0.9% to 73.85. See Currencies.
The Commerce Department reported that the U.S. economy grew at an unrevised 0.6% annual rate for the fourth quarter, underscoring how economic conditions slowed toward the end of 2007. And for all of 2007, the economy grew at the weakest pace in five years. Read more.
Also Thursday, the Labor Department reported that first-time claims for state unemployment benefits rose 19,000 last week, reaching the highest level since late January.
Crude-oil futures rose sharply Thursday boosted by dollar weakness. See Futures Movers.
While global capital markets have already priced in a mild U.S. recession, the prices of raw material prices continue to hit new highs, S&P analysts said Thursday. Tighter global capacity along with strong demand from emerging markets has counter-balanced weak demand from developed countries, S&P said.
"We believe commodity prices are benefiting from investors' increasing worries that inflation, which has begun to inch up globally, will continue to rise," said Alec Young, international equity strategist for Standard & Poor's Equity Research, in a statement Thursday.
The current commodity bull market offers opportunities for equities in the materials sector, S&P said. Metals companies have been delivering solid earnings for a sustained period, said Leo Larkin, diversified metals and mining analyst for Standard & Poor's Equity Research.
"Gold has been particularly rewarding, as it has enjoyed a seven-year bull run, and we recommend the purchase of Barrick Gold (ABX:Barrick Gold Corporation
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Last: 52.59+1.14+2.22%

11:38am 02/28/2008

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ABX 52.59, +1.14, +2.2%) ," Larkin said.
"Copper also has been a nice surprise that has rewarded investors with strong returns," he said. Larkin has a buy recommendation on Teck Cominco (TCK:teck cominco ltd cl b
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Last: 40.74+0.79+1.98%

11:38am 02/28/2008

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TCK 40.74, +0.79, +2.0%) (TCK:teck cominco ltd cl b
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11:38am 02/28/2008

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TCK 40.74, +0.79, +2.0%) partly based on higher copper prices.
Also on Nymex, March silver gained 50 cents at $19.72 an ounce, while April platinum dropped $12.30 to $2,140 an ounce.
March palladium gained $5.55 at $561.10 an ounce and March copper rose 4 cents at $3.88 a pound.
Gold warehouse inventories rose by 219,916 troy ounces to stand at 7.3 million troy ounces as of late Wednesday, according to Nymex data. Silver stockpiles were unchanged at 134.8 million troy ounces, while copper supplies fell by 247 short tons to stand at 13,304 short tons.
The Amex Gold Bugs Index (HUI:amex gold bugs index equal-$ weight
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Last: 493.42+7.52+1.55%

11:58am 02/28/2008

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HUI 493.42, +7.52, +1.6%) rose 1.2% at 491.81 points.
As for the sector's exchange-traded funds, the StreetTracks Gold Trust ETF (GLD:streetTRACKS Gold Shares ETF
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Last: 95.20+0.42+0.44%

11:38am 02/28/2008

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GLD 95.20, +0.42, +0.4%) gained 0.6% at $95.36, the iShares Silver Trust ETF (SLV:ishares silver trust ishares
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Last: 195.38+4.05+2.12%

11:38am 02/28/2008

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SLV 195.38, +4.05, +2.1%) surged 2.2% at $195.48 and the Market Vectors-Gold Miners ETF (GDX:market vectors etf tr gold miner etf
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Last: 53.56+0.40+0.75%

11:38am 02/28/2008

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GDX 53.56, +0.40, +0.8%) rose 1.2% at $53.79.
Deutsche Bank (DB:deutsche bank ag namen akt
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Last: 115.00-1.29-1.11%

11:37am 02/28/2008

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DB 115.00, -1.29, -1.1%) said it will launch on Thursday a trio of exchange-traded notes linked to gold prices. DB Gold Double Short ETN, DB Gold Double Long ETN and DB Gold Short ETN will trade on the NYSE Arca under the tickers DZZ, DGP and DGZ, respectively.
"The ETNs will be the first to offer investors short or leveraged exposure to gold," Deutsche Bank said in a news release. ETNs are debt securities that have similarities to exchange-traded funds, or ETFs. 
Polya Lesova is a MarketWatch reporter based in New York.

[usedcasting]

Enjoy the debate. I'm solidly in the BigSully1 camp. Stagflation is just starting. The financial sector has just started their implosion and oil and gold make a good hedge. This is a long term outlook of course with short term corrections always expected.

uc.

Thanks for your opinion uc.

I disagree.

Focusing on the SPY, despite all the short term noise, I see the short term trend as bullish. I guess today we'll probably break down below $137 which will throw a lot of weak hands out of board ... but this is just to touch the ascending support line at $136.25. We'll close back above $137 and this time the market we'll move beyond $140 ...

Let's see what the future brings

Ah the gauntlet has been thrown down. The answer to Life, the universe and everything is on page 42.   

Lots of fun!

uc.

[BigSully1]

Gold's Not Done Yet
Lance Lewis  Feb 28, 2008 12:05 pm 
Tags: GLD
     
Demand pushing yellow metal to new heights. 
   


Why Do The Markets Do What They Do?

Based on the amount of misunderstanding regarding the Commitments of Traders, or COT, report for gold, I thought I'd try and clear something up. I see many people citing the large COMEX speculative net long position in gold as a reason to be bearish on the yellow metal. These individuals do not fully understand the gold market.

Nevermind that the GLD gold ETF continues to inhale physical metal at current prices, which is obviously investment demand. The spec long position, however, is also investment demand, and not merely "trading demand." And investment demand is what drives big bull markets in gold.

Prior to 2005, large spec net long positions vs. large commercial net short positions in gold were a sign of "toppiness" in gold, while large commercial net long positions vs. large spec net short positions were signs of bottoms in gold. This was the case because producer dehedging and jeweler-type buying were still the primary drivers of the gold market (i.e.- the commercials determined the price of gold).

However, there was a big shift in 2005 when investment demand became the primary driver of the gold market and the "specs" (i.e. - "investors" in gold) became the primary driver of the gold market. As you can see in the chart below, the spec net long position exploded in mid-2005, but that was not a "top" in gold and instead was merely the beginning of a rally into mid-2006.

If one didn't pick up on the shift in market behavior, one was bearish all the way up and wrong. What in fact happened in 2005-2006 was that commercials were squeezed by the specs until they were finally forced to cover. As you can see in the chart below, the peak in the gold price in 2006 came well after the peak in the net spec long position. Commercials buying back shorts as specs liquidated into the buying drove gold from $450 to $700, which accounted for the majority of the move at the time.

Along those same lines, note that today the spec net long position is still hitting new highs, suggesting that the majority of the current intermediate move in the gold price still lies in front of us, not behind us as many seem to believe.

[BigSully1]

1:45PM Comex Metals Closing Prices (COMDX) : Gold settled the session higher by $7.80 to $968.80/oz, silver ended up 43.2 cents to $19.765/oz and copper closed higher by 3.05 cents to $3.8770/lb.