ROLEX18K

Update on the Gold Trade

No question Gold looks very strong technically and that's why I am short since 900$, Crude Oil or Nickel or Coffee had all the same technicals indicators screaming when they were on the top, when something looks too good and it is on the top, the only way is down.
All technical indicators follow the price action, not the opposite, if chicken/egg maybe sill unanswered question in science, in the markets it is known that first was the price, then indicator.

Silver in Backwardation; Has the Last Cantango Been Danced in Washington?

Now regarding backwardation, not only in Gold or Silver but in other commodities as well.
Silver futures have about 1 year of backwardation, Gold only 3 months.
What it means in this case? It means that deflation that is witnessed in global economy finally starts to work reaching almost any asset, the Nickel, Copper or Steel crashed at some point 80% in few months while Gold didn't and explanation is that investors look at Gold as some magic metal, in fact it is not and backwardation while very insignificant already states the mind of producers who sell Gold today for later delivery, they know that they have expenses in USD$ not Gold ounces, for them Gold is a commodity same as potato to a farmer, they digg it to sell it, not to collect.
Silver will crash more than Gold, that's why almost 12 months of backwardation, the main Silver use silverware is almost non existing anymore and out of fashion, the industrial use is declining together with declining industries that use it and the best barometer of world industries is DJIA, DAX, FTSE, NIKKEI indexes which are all down.
From my past observations, backwardation in any commodity is a bearish indicator for up to 5-7 years.Stay tuned.

Bonds Slumping, Metals Looking Bullish

The 20-30 years Treasuries that are linked to inflation (TIPS) are the best asset preservation for a smart investor.
Stocks are going to decline from current prices additional 60-80% in the next 20 years, it have no sense to hold stocks and be bunkrupt when retirement will knock the door.
Gold same as stocks, another dumb asset that is going to collapse 80% in the next 10-15 years.
If you lost already in the stock market, forget it, clear your tears, invest in inflation linked long term government bonds and that's it.
Maybe you will not make much, few percent a year but you will recover in 20 years what you lost in 2008-2009, I know it sounds grim but this is the only option to get something, other option is to go bankrupt for retirement.

Gold Rising as Equities Tumble; But Where's It Heading?

5,000$ Gold is a dream of every goldbug, but it will never happen, already at this prices jewelry retailers are going bankrupt almost in every country, at 5,000$ there will be only sellers and no buyers but it will not come to this as Gold will never brake 1030$.
If you were bears not humans and were going for a winter sleep for 6 months, then you wake up till August 2009 Gold will be no higher that 500-600$.

Hedging Can Cause Volatility in Earnings and Stock Price

If there is nothing else in your brain then better relax, as this article is almost a copy of another article about airlines and their Jet Oil hedging.
I understand that SA lost about 50% of audience since last year as this is natural way of bear market force, when people lose money and lose interest in the financial news as this money are gone and nothing improves.
But by giving everybody a right to publish whatever he wants, you make out of your website a information junkyard.

The End of Gold, Part Two

I don't care, I am short since 900$ as I know that this is the cliff but I wonder how it will crash, I mean proportions, will it be one bad week that will take GC to 700$ first and then in few months to 200-400$ or it will be some unloading of Gold reserves by Central Banks to form a new agreement where instead of Gold they will hold each other's currencies.
As Buffett said ( he lost 40% this year but he is not stupid ) that he don't invest in Gold as it has no utility, it doesn't generate income in the same way as Coca-Cola, Hershey's, Wrigley's or insurance policy, he said that people are crazy who digg it underground in Africa in some dirt then bring it to Europe and US and store it in underground again, I also agree with him, Gold is industrial matal and jewelry, it is same as Steel, Nickel or Lead and it also can crash.
I don't say Gold is not nice, it is very nice and precious when in jewelry but it is not immune from declining 80% same as Nickel or other bubble assets.Everything is good when price is right, I am proud of US and especially COMEX that they allow me to sell it short from Frankfurt in Germany, I havn't even been to USA and don't want to go there ever, but GOD BLESS AMERICAN CAPITALISM for allowing foreigners to sell it short.Same I made few hundred thousans $ selling Dow Jones futures not even holding ever 1 share of any DJIA stock.
I love America, God bless you!

Why Are Gold and the Dollar Running Together?

Gold and USD are running together as there are too many investors who are short both, when USD started to appreciate greatly last year, in the beginning common sense prevailed and GC crashed to 700$ but later investors with billions ( think biggest investment banks, not some stinky hedge funds ) realized that there is too much money at stake on the GC short side and started to buy it.
USD is too big an animal for any bank except the Fed to sell it when it is in the rally mode, but GC which is mostly traded on COMEX and other futures venues is easy to manipulate.
Even 1-2 billion $ strategy buying GC constantly can shift a balance of positions to net long, the shorts who can't keep their shorts go out at loss and new shorts enter.
In general this is very bad for GC price when it will start to be dumped when some other banks will sell physical GC ( 100oz of physical sell equals 10,000oz in futures game ) and we are very near such change in direction as price moves are very fast in Gold, it looks as big players do all they can to prop up the price.But it will all stop when small physical sell order will enter the pit.
Remember, not investor who buys 1 American Eagle to hide all his wealth in the coin and then writes on SA that he is a gold bug, controls the supply/demand in gold, same as not some conspirator end of the world freak who bought gold stocks that are down 70% controls it.
The pit belongs to the banks and banks belong to the Fed, also it can be that Fed is happy that some investors are buying GC at this prices and sells it's GC slowly to this big manipulators but in the end THE BOSS will set up everybody and gold will crash.
I see the gold bug's face when they will face it, the total crash in gold.

Economy Watch: What if Stocks Were Priced in Gold?

Whatever DJIA will do, the price of gold can't rise much further, yes, gold is a bubble same as stocks were a bubble last years.
But there is one crucial difference, stocks even when overvalued serve some good to society, to investors who bought/sold them, to employees who work, to consumers...I think you all can imagine that stocks are not some ticker symbols on exchange, there is much more about stocks than gold.
The normal ratio for DJIA/Gold would be 20-40 historical average 30.
Today's gold price is very close to collapse as there is no even money to pay back credit card debt, morgage.
How something can rise when even very rich people cut spending like crazy, I ask who then buys gold.
Maybe you?

Random Observations on the GDP Announcement

GDP is empty indicator for the grey masses, all crashes started with all mainstream indicators look good, all the recovery's started when indicators looked dead.The market don't watches this junk, we have our own tools and play short term, to us it is not a secret that you - buy and hold investor, will be bankrupt and sell all the remaining shares when DJIA will reach 2000-3000.For us when Dow will rise 10% is between 40-80% frofit, we buy on margin not stocks, futures.Then we sell and stay short.
Friday's GDP was so bad that it will take the market higher in near term but most of you will not make any money on it, you will only watch your stocks and do nothing hoping for DJIA to go back to 14500.
This are dreams, but short covering rally is warranted.

Don't Expect Oil Prices to Break $50 Until Q2 - FirstEnergy Capital

I think in 2009 we will speak more about 20-30$ Oil than 50$, but market is the market, there is no free lunch and some major world event can take prices to 50-60$ in few days but in general the major trend is down.

Global Sovereign Bond Watch: Overstuffed Supply

Everybody is an expert, only why 95% of investors lost in 2008 and now anywhere from 40-90%.
But probably writers on SA are the 5% of winner takes it all.

Getting Fired Up on Cleaner Internal Combustion Technologies

Every investor believes his stocks are the best, ask any investor from any country what he thinks about his stock or even if he holds 1000 stocks, he will say you endless stories why his stocks are better than the rest.
I hate stocks as I don't trust people who run and milk them, I can only buy stock if it is well hedged with 2X3X short index ETF.
Also many investors wonder and follow hedge funds holdings, without understanding that successful funds don't make money in stocks, they only made money is selling against it SP 500 index futures.

Coffee from the ETN Perspective

IPATH DJ-AIG COFFEE(PCX: JO) have 3 month average volume of $100,000 a day, while KC (coffee futures) have average 100 days trading volume of 675,000,000$ a day.
For a very small investor, who invests 1000-5000$ in JO this may be appropriate, but not for serious investor who want to trade coffee or who wants liquidity.
JO has volume of 2000-3000 shares at the price around 40$, bid/ask spread is sometimes 5-10%. It is cearly not for everybody, but if you believe in coffee and want to buy JO, then you have to buy and forget about it, as even if it will go up 10% you will be only even because of bid/ask difference.
This is very illiquid ETN with only 50,000 shares outstanding (2 million USD) and have expense ratio excluding crazy bid/ask difference, of 0.75%.
Really not for everybody, even if Coffee I believe is a good investment.

Hedge Fund to Measure Returns in Gold Rather than Currency

In the times where 95% of hedge funds are going to liquidate, some small Bermuda fund is fighting for survival and finding new marketing tricks to keep investors in.
Instead of making profits in the markets and let investors decide what to do with their EUR,GBP,CAD,CHF,USD,JP... this hopless manager tricks them to stay with some fairy end of the world tales.
If I am an investor, hedge fund made from 1 mln $ 50%, i made 500,000$ I will decide myself what to do with this money, buy gold,sell gold,buy Porsche,buy house, buy paintings...what the hell some silly hedge fund honcho is proposing, is a prove that he is losing money and looks for other ways to keep dissapointed investors inside.
Sell the hedge fund boy short.

The Shedlock-Schiff Affair: A Chronicle

There is nothing knew in it, 50% of hedge funds are scam like Madoff, not exactly stealing money ,as investors signed agreement to pay a manager 20-50% from generated profits and most profits are generated in OTC internet websites turned trading pits supported by banks who make commissions out of hedge funds trading in exotic, non existing assets.
The other 49% of hedge funds are delivering long term returns same as passive mutual fund investing in SP 500, only hedge funds charge 20-50% for it, mutual fund 0.25%.
And then there is 1% of hedge funds who survived crash of 70's, 80's, 90's, 2000 and current crash, are not funds that manage billions $$$, only small funds can make money consistently and their size can not be more than 500 mln$, the big hedge funds that had billions and now will be liquidated were not made to make money from trading, they are good marketing firms and good fraudsters and bear market found them naked and now it's time to face it.