Wednesday, October 31, 2007

Gold Passes $800

Gold last topped $800 an ounce in 1980, when prices reached as high as $875 an ounce in January. Adjusted for inflation, an $800 ounce of gold in 1980 would be worth more than $2,000 today.

Pick your poison. Place your eggs in a narrow basket or bet against stocks that are just plain powerful. Either way, risk is elevated and picking the right stocks is critical. Forget the dart board and keep a very close eye on the Nasdaq-100. There is your rainmaker. MICHAEL KAHN Barron's

Tuesday, October 30, 2007

Gold Stocks Pull Back--Broad Market Stalls

MER: Merrill Lynch has supplanted GM as the ultimate broad market leading indicator and MER is currently flashing yet another bearish intermediate-term signal.

IBD shows 6 distribution days for S&P 500, 5 for Nasdaq, 4 for Dow, NYSE composite in last few weeks. I look for possible surprise from the Fed interest rate announcement.

Gold/XAU Ratio 4.33

"An increasingly recessionary looking U.S. economy will likely require 1% real short rates and 3.5% Fed Funds in order to stabilize a potential growth contraction in lending not witnessed since the early 1970s or, to be honest, Roosevelt’s depressionary 1930s. We can only hope that Bernanke, Paulson, and their cohorts recognize the danger and that the music keeps playing with the lights still turned on." Bill Gross PIMCO Funds

Monday, October 29, 2007

Will the dollar rally short term?

“When (not “if”) the greenback catches the inevitable phoenix bid against all the other fiat currency lepers, short term that just might put considerable downside pressure on precious metals. It’s pretty difficult to find a dollar bull these days and the ones who do surface in the television media seem to be apologetic, meek and uncertain. And that scares pure contrarians. It’s often said on Wall Street when just about everyone is on the same side of the boat the boat is close to rolling over. Right now just about anyone who writes or talks about the dollar says it’s going lower, but the reasoning each of the pundits and experts uses to back up those assessments carries with it the fatal flaw that the forex markets are assumed to be rational, fair and open. Are they? Really?"

Friday, October 26, 2007

Gold hits another 28-year peak as dollar plunges

Gold is a runaway train to the upside. Four more trading days on my projected downside reversal timing point based on Fibonacci ratios.

So why do I try to call market turns instead of letting the market tell me when it is time to turn??? Even though I missed my last two trades in the gold stocks I remeber my last big trade from 12 months ago that netted over $150,000. So is it greed?? Or my ego wanting to be right? Or fear of risk or lack of focus or discipline?

At any rate the financial markets fascinate me. I would rather be a successful trader than an economist. (An economist was once described as a guy that knew 101 ways to make love--his only problem being that he didn't know any women.}

Gold/XAU Ratio 4.30

"One of the hallmarks of great investors is the ability to ride a wave of seemingly irrational action. Rather than fight it and try to come up with reasons that it is doomed to fail, great investors go with the flow and profit from having the wind at their backs.

The reason this can work so well is that trends can last much longer than we believe they will. People intent on calling market turns are inevitably too early. It is in those stages when we first start thinking the market needs a rest -- but keeps going and going and going -- that the trend-riding investor makes exceptional gains.

The secret to success is to ride that momentum as long as possible but to be quick to lock in profits at the first sign of trouble. Unfortunately that is a lot harder than it sounds. When we are distrustful of the market and believe it is acting irrationally it is very easy to perceive every minor hiccup as the beginning of the end. We know it won't last, so we overreact to relatively minor issues." Rev Shark's Blog: Why This Is not an Easy Market for Traders
Originally published on 5/04/2007 at 8:49 a.m.

Wednesday, October 24, 2007

Look for sizeable gold and gold stock correction over next week

Gold/XAU Ratio 4.34

The Fibonacci sequence involves the use of ratios, and the two ratios that are focused on in this trading tip are 1.618 and 2.618. Time can be forecast by measuring the horizontal time period between two points A and B, and multiplying by the Fibonacci ratios. The result as plotted rightward point to recent high as a reversal point.

I plan to trade the Horizons BetaPro Gold Bear Plus Fund (the "Gold Bear Plus Fund") seeks daily investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to two times (200%) the inverse (opposite) of the daily performance of the GSCI® Gold Excess Return Index. Intra day level of $HUI at 390 will confirm entry to this trade. Stop loss will be new highs in $HUI (418 level) Trade objective will be Fibonnaci retracement to HUI 355. This is a high risk trade and will only risk 2% of my trading capital.

Tuesday, October 23, 2007

Watch support levels DJIA and DJTA


Monday, October 22, 2007

Sunday, October 21, 2007


Gold/XAU Ratio 4.39 Ideal sell points are 3.64 to 4.40 see graph of Tuesday October 16 Blog.

Saturday, October 20, 2007

Nasdaq Takes A 2.6% Plunge In Broad Sell-Off

Please see Alex Roslin's comments of Oct 13th COT--nasdaq 100 turned bearish and note key reversal day on QQQ --see last weeks comments.

All 30 dow stocks closed lower.

The Hindenburg Omen gave us early warning and signaled three times this past week before the market tumbled. see Ian Woodward's blog High Growth Stocks.

"The probability of an S&P 500 move greater than 5% to the downside after a confirmed Hindenburg Omen within the next 41 days after its occurrence is 77%, the probability of a panic sellout is 41% and the probability of a real big stock market crash is 25%.The occurrence of a confirmed Hindenburg Omen does not necessarily mean that the stock market will go down. On the other hand there has never been a significant stock market decline in history that was not preceded by a confirmed Hindenburg Omen.”

Wednesday, October 17, 2007

yen/euro cross

If the yen/euro cross trades down to 160 from its highs, gold could trade significantly lower.

Tuesday, October 16, 2007

Gold Stocks and Nasdaq Lower

Oil gold ratio moving in favor for gold

Note key reversal day for QQQ last Thursday

Gold/XAU Ratio 4.33
Nasdaq lower on decreased volume--3 distribution days in recent weeks--today was not a distribution day.

Monday, October 15, 2007


Gold/XAU Ratio 4.21 Gold fibonacci retracements are 717 702 687 levels---I am still looking for a correction to this level.

Stocks fall on higher volume--3 distribution days for nasdaq and S&P 500. Once gold and broad market sell off together a good short term trade will be Horizons Beta Pro Gold Bear Plus Fund

Sunday, October 14, 2007



Saturday, October 13, 2007

the Dow's real, inflation-adjusted value over the last seven years is actually a 68% loss!

Since its peak in January 2000, the Dow has lost as much as 68% of its value in terms of most other assets!

"Let's say you bought all of the stocks in the Dow Jones Industrials on January 3, 2000. And for simplicity's sake, we'll just say you paid $11,357 (the index's value in dollars) for the whole lot.

Now, fast forward to today, with the Dow hovering around 14,000. In pure nominal terms, the index has gained 2,643 points since January 2000, or 23.3%.

Never mind just how lousy that is when you consider it translates to an average annual return of just 3.32% over seven years.

Instead, compare the Dow's measly gain to the performance of a basket of commodities (in this case, the Commodity Research Bureau's CRB Index).

Dow's gain since January 2000: 23%

CRB's gain since January 2000: 307%!

Translation: Your dollars have lost so much purchasing power as measured by basic items such as oil, sugar and cotton that instead of a 23.3% gain, " Larry Edelson

NASDAQ 100 Turning Point?

NASDAQ 100 Goes Bearish

"My trading setup for the NASDAQ 100 has flipped to bearish. This is because the "dumb money" large speculators have suddenly gone from being heavily net short in their futures and options positions to a historically extreme net long position as a percentage of the total interest, according to today's data from the U.S. Commodity Futures Trading Commission." Alex Roslin
IBD reports 2 distribution days for nasdaq in last several weeks. A 50% retracement of the latest rally would be to the 1806 level.

Friday, October 12, 2007

Gold Falls as Dollar Strengthens on Retail Sales

Gold/XAU Ratio 4.18

Gold for December delivery fell $2.90 to $753.80 an ounce on the New York Mercantile Exchange. For the week, gold still gained $6.60, or 0.9%.
Metals mining shares still advanced with the broad market on Friday, with the Amex Gold Bugs Index (HUI:amex gold bugs index 413.34+2.87+0.70%

Thursday, October 11, 2007

-Gold hits 28-year peak, platinum sets record-

By 1:00 pm NY time spot gold was up $12.20 to $752.00, while silver jumped 32 cents to $13.86.
Gold/XAU Ratio 4.23

Saturday, October 6, 2007

Are you having fun trading? Get rich by doing what you love.

“If you cannot treat your quest to get rich as a game, you will never be rich.” Felix Dennis

I know I am fortunate because I have a great profession and also have fun and a great passion for my trading. I enjoyed the following article by Robert Frank:

July 23, 2007, 10:37 am
Getting Rich By Doing What You Love

Last year, I interviewed an entrepreneur named Ed Bazinet. He had made millions by launching a company called Department 56, which produced miniature ceramic villages that people collected and put around their Christmas trees during the holidays.

Ed had worked 18-hour days for more than 20 years to make the company successful. When I asked him if it was all worth the money, he looked puzzled.
“It wasn’t for the money,” he said.
“Not for the money?” I asked. “But you gave your life to this company.”
“I know it’s hard for people to understand,” he told me. “But I’m not money motivated. For me it was all about the product line and having success with that product that was in high demand.” He added: “It was about doing what I loved doing.”

When Ed first told me this I was skeptical. Most people saw their jobs as jobs, after all. And if someone worked as hard as Ed had for 20 years, it had to be for the money. But as I met more rich people, most of them said their job wasn’t a job — it was their life and, often, their greatest joy. By doing what they loved doing, the money often followed. Or so they said.

In Nick Paumgarten’s vivid profile of billionaire Mort Zuckerman in the New Yorker last week, Mr. Zuckerman says that he’s “never worked a day in his life.” His success, he says, comes from doing what he loves doing — whether it’s building office towers, owning newspapers or participating in the professional shouting match known as the McLaughlin Group.

Louis Uchitelle’s New York Times piece last Sunday on the new Gilded Age quoted Citigroup tycoon Sandy Weill as saying “I worked because I loved what I was doing.” And hedge-funder Ken Griffin says: “The money is a byproduct of a passionate endeavor.”

Following your bliss and making a bundle isn’t just an American notion. In an article in Australia’s Sunday Mail, Queensland’s billionaires say that “if you love what you’re doing and do it well, it’s never hard work.”

Still, doing what you love isn’t necessarily the ticket to riches. A teacher or jazz musician could be doing what they love and never get rich. The key to getting rich — or at least one key — is to love a job or product that’s actually in high demand in our current economy.

And I’m a little weary of people who spend their whole day moving money around and doing deals and saying they do it out of “passion.” (Is anyone else sick of the word “passion” becoming so, well, passionless through its recent overuse?) Perhaps these are just passions I just don’t understand. But Ken Griffin, the “passionate” hedge fund manager makes a telling remark in the Times article. When he’s asked about raising taxes on the rich, Mr. Griffin says that if his taxes are raised, he would lose some of his incentive and ” I would not be working this hard”
So what is really motivating today’s rich? The passion or the money?

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Tuesday, October 2, 2007

Gold down as traders lock in profits after record highs yesterday

I will buy Terrane Metals Corp. metals when I get my next buy signal

Here are some charts I am following added to my watch list.

Monday, October 1, 2007

Gold and $HUI close still higher

Gold/XAU Ratio 4.30
Two new junior golds have been added to my watch list:TRX.V Terrane Metals and CUU.V Copper Fox