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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 8935
Posted: Feb 22, 2010 5:00
Comments: 8935
Forum Topic:
Gold, Oil & Indices (Equity & Bond Indices)
Discuss Gold, Oil & Indices (Equity & Bond Indices)
Ashraf
Have you backed off the short-term bearish stance on gold and expecting it to now continue to rise, or expect this USD to continue upward after a day or two more of consolidation, starting Gold back down.
Also, a lot of talk this weekend out of China regarding re-valuing. You mentioned O'Neill of Goldman felt Chinese would revalue sooner rather than later. How would a China revaluation, in your estimation, affect FX, particulary JPY and the yen crosses, gold and aussie?
Thank you.
Ashraf
Does it mean gold will break above 1140?
Same can be said about 1140 gold.
What you said about the fudge factor in commodities is important. And thats what i said about in my Gold presentation on Cantos last Monday http://bit.ly/diTigP
Ashraf
After a full year of relentless move upwards, the Market now has to make a major decision. The close on Friday at S&P 1138 was 88 6% retracement of the drop from the Jan. 19th high to the Feb. 5th low. A 100% retracement would naturally be to 1150. Only 12 pts. away or 100 DOW pts. Easily done. Possible scenarios:
1). Market breaks above 1150 and moves to 1200. This could be done s l o w l y over a few weeks or quickly over a few days.
2). Market enters a controlled (by the PPT of course) correction down to ~1075. The chart of the past few weeks shows the S&P in an 'expanding megaphone' pattern. (higher highs, lower lows, this is bearish). 1150 is at the top boundary, 1075 would bring it down to the bottom boundary. Then up and down sideways for quite awhile. (See a chart, if you can, of 2003 S&P for comparison of the rise from last March).
3). 'Cascading Fall'; The PPT loses control and the market does not rebound from 1075 and continues down to 1000. In market declines, regular bounces occur with new money coming in at perceived support levels and short covering. The PPT has done a masterful job at squeezing shorts out of the market day by day during the rise. Every afternoon shorts are squeezed as well as every Monday. With a much reduced level of shorts to support rebounds, bounces could be weak and lead to accelerated decline.
so, if,
1). (undesirable); Slow agony continues for those here who are shorting. Most likely no large drop in commodities if the market does not sell off yet.
2). (most likely); Nimble money to be made in the drop to 1075 and sideways up and down action thereafter.
3). (le deluge); PPT loses control and market cascades. Difficult to find levels for buying or selling.
Early next week should be interesting.
One confused view.
I've always used a little "fudge factor" margin of safety in the case of commodities to account for their tendency to slightly overshoot, creating false breakouts/breakdowns.
You still feeling confortable with the "Oil To Hold And Reverse" concept based on 81.4?