Tony Crescenzi Blog
10 Golden Reasons for a Gold Rally

http://www.thestreet.com/p/pf/rmoney/tcrescenziblog/10263147.html

Don't see anything new here. But I believe this list pretty well summarizes fundamental reasons why managers have to buy gold and/or miners. Much like energy 12 months ago. What can go right for gold may be bad for some of your other investments, so you have to own it as insurance. That attitude about energy SAVED the year for many managers in 2005. If this view becomes accepted in 2006 it insures THE YEAR OF THE METALS.

stockman-

I think that is a subscription link but with a 30 day free trial.

For those who can't spring for the real$ sub:

Diversification of central banks' portfolio assets. In a nutshell, the world's central banks are signaling that they would like to diversify their portfolios...

Speculative activity. The most recent data from the Commodity Futures Trading Commission indicate a high degree of speculative fervor in the gold futures...

Liquidity remains superfluous. Most of the major liquidity indicators in the U.S. show an abundance of liquidity to power gold prices higher...

Rise in appeal as an asset class. Similar to the way in which both high-yield and emerging-markets bonds become more acceptable as asset classes...

Growing bets on an end to Fed rate hikes. Perceptions are that the Fed will soon end its interest rate hikes...

Japan exiting a deflationary period.

Industrial metals: There has long been correlation between the behavior of industrial metals and the price of gold.

Oil: Similar to the correlation with industrial metals...

Geopolitical: Geopolitical tensions have escalated of late...

Jewelry demand: Led by strong demand in India, which is the world's largest consumer of gold, jewelry demand has increased worldwide...

I find REal$ to be worth the price. Not so Street Insight.

Long DJIA futures.

Err at 10681 now, intraday speculative trade.

stockman-

Thanks for the summary. I am buying my kids a treat for after school with the subs $ you saved me! :)

Ok, time to sell, bounce over. 10703 now.

First Consul-

I'd say! A couple more points and this goes into the RED. Good call.

Seasonality favors energy move- Chart of the Day, "Today's chart takes a look the seasonality of the Dow Jones Oil Companies - Secondary Index and illustrates that these oil stocks tend to do especially well from late January to early June. A relatively strong global economy, global tensions, and seasonal strength makes for potentially powerful combination indeed."

Rydex investors are all over service fund, so be careful.

COT data looks bullish for gas, neutral on crude.

I'm reviewing charts for some mid cap names in the energy patch, might have to add a small basket play for the season.

IF the market regroups and moves higher, can it do it without energy and metals? I don't think it can. They have the best fundamental story out there as a group and a manager would hardly be criticized for being overweight the companies in these sectors.

stockman-

Nothing is moving this market BUT energy and metals and dead cat bounces of techs. I was reviewing a lot of Bill's picks and half of them have weekly RSIs in the 30s, 40s and 50s. THEN you review the metals and oils and they are all upper 60s to 80s in some cases.

Let us know if anything looks good.

Crude should be near its S/T peak. Not so for NG. Should just be beginning to move. ECA should get a push. Perhaps Bill is right in selling into oil strength and rotating it to gas.

MarkM

Added to ECA on this weakness. Added a basket of small cap independents (5%). Too small to mention names. As this is a basket to play a theme and my selection of individual names is primarily charts... the names are unimportant anyway.

My adds from last week pre-selloff... AVP, POT, N, SIRI, PNR... are acting well over all with the xception of SIRI. I'll give SIRI some room as I dated her after that Mel insider buy last year which ultimately worked out quite well.

On insider trading, note that IGT had some sellers yesterday as a result of option exercise. Not usually a big deal, unless you purchased the name specifically due to net insider buying as I did. Gone.

long- ECA, SIRI, AVP, PNR, POT, N

JRCC-

I have made several comments in regards to Pirate Capital's accumulation of JRCC shares. Also notes that due to trading activity and a weak market that I had sold most (2/3) of my position.

Yesterday HARBINGER CAPITAL PARTNERS filed that they had sold 195,000 shares; AND REMAIN LONG 2.2 million. This could help explain the stock trading poorly as holders anticipate additional selling by this holder into any strength.

To put this in perspective the company has only 16.8 million outstanding shares.

stockman-

My chart read on what was happening was quiet distribution. Spike opening on low volume followed by selling. Rinse. Repeat. I could be wrong.

stockman-

JRCC. Spike opening on very good volume today. Chart is looking better. If there is follow through this may be the turn.

stockman-

Chart misread. Ignore that last comment. Volume late yesterday. Sorry for the meddle and muddle.

TLT-

Out of 1/2 position. Locking in small gain. Break of recent last low will sell balance. Not a hedge today!

TLT-

With 30 yr yield breaking cleanly through trend AND exceeding most recent high I am out of all TLT.

stockman-

Hedge with GLD. :)

If that break in the tyx is in fact change of trend this will likely bring an end to the rally in stocks-

imho

TLT-

BOND/STOCK ratio now neutral

Rydex Bond Bull/Bear now at most bullish level since 3/2004

Rydex Bond net cash flow at bull extreme

The last two were cause for concern and the trend break was reason to act. I will hold my 5% STRIP position as hard landing insurance.

CWEI

FYI- with break in short term trend yesterday I sold most of this position.

JRCC-

Seller working hard on unloading their inventory:

1/26/2006 16:18 - James River Coal CO- [JRCC] Filing:
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD. Checked: 10% Owner
Common stock 01/24/2006 S 616,756 $38.81

Remaining long:
Common stock 01/25/2006 1,540,000

Actually think that's positive the stock absorbed that supply without breaking down, must have been that volume spike MarkM noticed near the close a few days ago.

long JRCC

stockman-

Look for the same pattern to repeat itself holding down the price. When this inventory is finally absorbed, the stock should rally. No more repeated spikes to cover the distribution will be your key. It happened about 7 days of the 10 I looked at the charts.

Good luck. I will not be commenting as much from here on out.

Best,

WSJ Heard On The Street- "Prospecting for Mining's Winners
If Gold Prices Maintain Heights,
Even Less-Efficient Small Firms
May Offer Benefits to Investors'"

http://online.wsj.com/article/SB113833233794257903.html?mod=mkts_main_todays_mkts_tac

Are we in the late stages when we're reading this in the WSJ?

Sentiment-

AAII Bull Bear <1 (bullish)

Rydex Cash spiked lower, but compared to 50 dma is not extreme. (neutral)

Rydex Bull Bear spread extreme bear (bullish)

Rydex PM assets rising, but well below extreme vs 50 dma

I know it doesn't have to be rational but...

MCD IPO's CMG...

CMG original expected 15-17; comes at 22; opens at $44!

MCD retains 80% of shares and is DOWN on the day (with the DJIA up 100!)?

GM- misses by $2! and falls $0.80; SNDK beats both top and bottom and is bid down $8???

long- memories of 1999