This post focuses on Gold again. An S&P report will come out tomorrow before the normal trading resumes.
From a trading perspective Gold is in a sort of "No Man's Land" at $1,212. A case can easily be made for an explosive and violent conclusion that takes the yellow metal to the $1,400 area in the next few months. In fact, from a Wave perspective, that looks like what is going to happen. The thing that gnaws at me, though, is the extreme level of bullish sentiment. How could we possibly witness a blowoff top that goes to $1,400 when sentiment is already at such a bullish extreme? It's going to take some kind of new event, something that the market has not yet discounted, to make that kind of move. (Maybe Kim Jong Il really drops the bomb this time?)
So, in light of the current bullish extremes, I have to give the model on Slide 4 equal weighting. We may just end up grinding between 1166 and 1250 before collapsing hard. There is certainly precedent for major moves to conclude with a "grind". For instance, the Euro peak in 2008 looked like bullish sideways congestion before the next leg up (remember back when the Dollar was going to ZERO?). Instead, it turned out being the prelude to a major collapse.
Bottom Line: The final -E- Wave in Gold has not yet completed. A break of $1,250 should send the market dramatically higher. Sideways congestion at this point should be considered bearish. $1,166 and $1,124 should be considered the first and second levels of medium term support. A break below $1,124 would confirm that the Supercycle C-Wave (of a Triangle) has concluded and that the Supercycle D-Wave is underway. This would mean several years of choppy sideways/lower price action as bullish sentiment gets "wrung out" of the market.
Gold Report 30 May 2010
Hey, can we get a pic of the "Solid Gold dancers" with this?
ReplyDelete(By the way, rumour has it that "Cvienne" is really "Denny Terrio" from a competing show.)
"It's going to take some kind of new event, something that the market has not yet discounted, to make that kind of move."
ReplyDeleteIsrael v Iran
????
On the subject of gold, Denninger posted a really satisfying take-down of the infinitely tiresome "Gordon Gekko," a name you will no doubt recognize with a groan if you've ever skimmed the comments at Zero Hedge.
ReplyDelete@McF
ReplyDeleteOK... here's a new event...
The NOT takedown (by Israel of Iran)...
But the fact that that was "expected" (& "priced in")... It became UNEXPECTED (in an unexpected way)...
OMG - I'm going to have to get about "pricing that in"...
I'm falling behind! :-)
CV
@The Mullet
ReplyDeleteMy guess is tho, that 'Gordon Gekko' DOES have that PRICED IN...
Wanger too... :-)... Gold=1097 LOL
Andy - THANK YOU SO MUCH xxx
ReplyDeletehttp://www.reuters.com/article/idUSTRE64R3KK20100530
ReplyDeleteGreek budget goal too ambitious as austerity hits
Sun May 30, 2010 12:08pm EDTATHENS (Reuters) - Greece will likely miss its budget deficit target for this year as recession wreaks havoc on construction firms and small businesses, leading to lower tax receipts and higher social spending.
Greece
Research firm Capital Economics expects the deficit to shrink to about 9 percent of GDP from 13.6 percent in 2009, short of an 8.1 percent target set out in Greece's bailout deal with the International Monetary Fund and the European Union.
"While Greece will make significant inroads into its deficit, there remains a strong chance that it will miss its 2010 deficit target," said Capital Economics analyst Ben May.
Greece this month received the biggest bailout in financial history, with the IMF and the EU pledging 110 billion euros ($134.8 billion) in 2010-2013 to save the country from default.
....Merely as we do here in America, the first guess. This is going to get really, really interesting as all of Europe tightens the pursestrings. Some are even betting China will have problems, and betting big:
http://www.businessinsider.com/hugh-hendry-will-make-500-million-off-270000-if-china-collapses-2010-5
Hugh Hendry Will Make $500 Million Off $2.7 Million If China Collapses
The more I read the more I think that the Euro as a currency union is almost over
ReplyDeleteSpain is trapped in a 'perverse spiral' as wage cuts deepen the crisiss
And this
Greece urged to give up euro
Ok ok. Who is taking time off in the Hamptons and pushing futures higher?
ReplyDeleteNic
ReplyDeleteWow. 1.6 million unsold properties and 20.5% unemployment in Spain. Not looking too good over there.
>> 1.6 million unsold properties and 20.5% unemployment in Spain.
ReplyDeleteWho wants a Holiday in the Sun?
http://www.youtube.com/watch?v=iB-eetwPPJA
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ReplyDeleteGeopolitical tensions rising ...
ReplyDelete19 dead, 25 injured on Gaza Aid Flotilla attacked by Israeli Navy (no Israeli's killed)
http://news.bbc.co.uk/2/hi/middle_east/10196585.stm
Bloomberg:
ReplyDeleteChina Real Estate Bubble Bursts in Bond Market: Credit Markets
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ReplyDeleteHugh Hendry Op-ed in FT today:
ReplyDeleteChina: like a cocktail party without the cocktails
http://nowandfutures.com/key_stats.html
ReplyDeletehttp://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.html
....OK, all you chartists...take a look at these two sites and mull it over for a minute. We know the ECRI is declining now for months...I know all here have read those headlines. Many governmental fiscal years start in June. Taxes and government layoffs on the horizon....
What do you make of the money supply?
It says to me we can expect more QE.
ReplyDeleteThe scary thing is Europe where Trichet today made a big deal out of draining more liquidity from the system to balance the bond purchases and they are still firmly focused on avoiding inflation.
http://www.nytimes.com/2010/05/31/business/global/31deflation.html
B in T @ 1:35
ReplyDeleteNo need to worry... all that Congress has to do is "grit its teeth", and we'll be fine.
>> they are still firmly focused on avoiding inflation.
ReplyDeleteAre they? Or are they saying "we worry about inflation" in order not to scare everyone out of the currency all at one time (or cause bonds to collapse), while at the same time desperately trying to drum up political support for more QE (which you expect anyway)?
(I don't know the answer to that question...)
Judging from a (Bloomberg?) article mentioning apartment bonds declining in price lately, I'm inclined to believe a significant flush is commencing in China.
ReplyDeleteIf I think that's true, what's the best way to trade it? Go long the dollar?
A chink in the Microsoft armor: http://www.ft.com/cms/s/2/d2f3f04e-6ccf-11df-91c8-00144feab49a.html
ReplyDeleteGoogle ditches Windows on security concerns
Google is phasing out the internal use of Microsoft’s ubiquitous Windows operating system because of security concerns, according to several Google employees.
The directive to move to other operating systems began in earnest in January, after Google’s Chinese operations were hacked, and could effectively end the use of Windows at Google, which employs more than 10,000 workers internationally.
“We’re not doing any more Windows. It is a security effort,” said one Google employee.
“Many people have been moved away from [Windows] PCs, mostly towards Mac OS, following the China hacking attacks,” said another.
New hires are now given the option of using Apple’s Mac computers or PCs running the Linux operating system. “Linux is open source and we feel good about it,” said one employee. “Microsoft we don’t feel so good about.”
In early January, some new hires were still being allowed to install Windows on their laptops, but it was not an option for their desktop computers. Google would not comment on its current policy.
Windows is known for being more vulnerable to attacks by hackers and more susceptible to computer viruses than other operating systems.
Employees wanting to stay on Windows required clearance from “quite senior levels”, one employee said. “Getting a new Windows machine now requires CIO approval,” said another employee.