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Thanks Stig--found it very helpful. Nice to see good copy about the fundamentals without all the hype and self promotion attached. The task for any us now, is finding low risk opportunities as set ups to re-enter the metal market successfully. Blind faith in someone else's understanding of the fundamentals, as
we all know from experience, can be devastating.
I sold all my silver futures and most of the gold calls day before yesterday simply by recognizing the markets had all the symptoms of a blow off top. However, I bought back some Dec Silver today because of a rule I use to trade around inside days: buy the gap-down opening of the first day that follows an inside
day-down, against a rising trend. That got me safely past break-even with the slightly higher close today. Gold didn't gap down, so I didn't buy it. This trade, however, is usually only good for the extent of the second day. It would seldom serve as a trigger to new highs after the trading range we saw in
silver the day before yesterday, otherwise it can be. After a possible up day Friday (tomorrow), I would either exit at the close or play a tight stop into the efp night session. (Thank God for the efp in gold and silver or I wouldn't play the futures at all). Hope this helps. Good luck with your positions.
Scheier
PS Keep the charts comin', you do such good work.
Stig O wrote:
> With the risk of being drowned by hate mail I'm including one of those GATA mails, The reason is that being long gold and being long goldstocks, is not neccesary the same thing during present circumstances , and if you do (I do) own goldstocks, I think you should read the post below, even if it's not confirmed.
> I am also including an adress were you can see the lease rate for gold. It's really scary - and if you did read the article "The gold Pyramide"I included in one of my last posts, It's REALLY scary. (for lease rates. http://www.kitco.com/lease.chart.html )
>
> I am also including a monthly chart of Palladium and gold from 1978, so you can visualize what the guy is talking about.
>
> Regards
> stig
>
> -Emne: [GATA] No sell signal until there's a bankruptcy
>
> >11:25p EDT Tuesday, September 28, 1999
> >
> >Dear Friend of GATA and Gold:
> >
> >What I'm sending below is just an anonymous post at the
> >Kitco board tonight, purporting to be from a Wall
> >Street trader, so you have to take it even more
> >skeptically than most things. But it may have the ring
> >of truth and I know you'll enjoy it as much as I did.
> >
> >CHRIS POWELL, Secretary
> >Gold Anti-Trust Action Committee Inc.
> >
> >* * *
> >
> >>From www.kitco.com
> >
> >September 28, 1999
> >
> >Gold looks to be following the palladium script. Both
> >markets were artificially sold down, both had large
> >supply/demand deficits financed by producer and spec
> >short selling plus the added kicker of government
> >liquidation of stockpiles. Both markets imbued the
> >players with the same sense of one-wayedness, and that
> >way was down. Both turned on a dime. One market is in
> >its 3rd year of bulling, while the other has snorted
> >for barely a week.
> >
> >If palladium is the guidepost, then the big lesson to
> >be learned, is not to lose your position.
> >
> >Markets which have been one way for a very long time
> >often turn explosively and give little or no chance for
> >bulls or bears waiting for a pullback. It would not be
> >at all surprising for the price of gold to go straight
> >up until it reaches a price which might be a high for
> >many, many months, perhaps even a year. This will
> >ensure that bears waiting to cover get slaughtered, and
> >would be bulls never make a dime, or buy at the local
> >top, because they were waiting for the pullback that
> >never came.
> >
> >In this environment the only technical indicator that I
> >would put any stock in is the lease rate. If it is true
> >that central bank leasing is now on hold, then changes
> >to the lease rate are now purely a function of loan
> >demand. Loan demand only rises as a function of
> >speculator or more likely now, producer short selling.
> >It falls as producers or specs do buybacks or specs get
> >long.
> >
> >Today lease rates went higher. The order flow at one
> >desk which gives me some info indicated that producers
> >were selling into this rally. They are insane.
> >
> >If this is going to be a really "big" move in gold,
> >which seems quite likely, then there are going to be
> >some producer casualties before this thing is over,
> >along with the bullion banks which supplied them with
> >the dope ... errrr ... gold.
> >
> >Back in the last great coffee rally in '94 (I think)
> >the price of coffee started from a low of around 80
> >cents. At this point according to market lore,
> >Starbucks, one of the biggest consumers, could not find
> >it within themselves to buy any price protection. You
> >see, coffee was going to $0.60. At $3.00 the same
> >geniuses hedged about 18 months worth of consumption,
> >oops.
> >
> >There are lots of rumors currently flying around the
> >market about Mr. Armstrong's position, which is
> >supposedly still uncovered. Rumor has it that the
> >counter-parties are going to take a big hit.
> >
> >There is still the matter of millions and millions of
> >ounces of calls sitting from 360 on upwards. They
> >together will act as a giant attractor sucking the gold
> >price into an accelerating upward spiral.
> >
> >They are the evidence of the real story which is the
> >producer hedge book, which is going up in flames.
> >There will be some companies that did their hedging by
> >selling tons of out of the money calls 'knowing' that
> >they could always delta hedge them back if things
> >started to rally. The models did not call for the price
> >of gold to go vertical with a concommitant rise in
> >option vols.
> >
> >I'm still waiting to see the headline which I've spoken
> >of in the past, GOLD RISES $60, XYZ Gold Declares
> >Bankruptcy.
> >
> >That will be the sell signal, and not a day before.
> >
> >-END-
> >
> >------------------------------------------------------------------------
> >
> >eGroups.com home: http://www.egroups.com/group/gata
> >http://www.egroups.com - Simplifying group communications
> >
> >
> >
> >
> >
>
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