Damn! I had just plunked down a grand for the Garzarelli newsletter.

i never get that people listen to TV for investment reasons...something has got to fill time so they are going to tell people things to keep them from changing the chanel.....right now cramer is busy buying the list he is going to talk about tonight so he can sell it tomorrow....how much easier does trading get than that......the best trader my be a deaf one who simply follows the chart (outside of cramer)....any cramer shorters out there?

I don't know if Shorting Cramer pays off but I don't think following his does.

Maybe the best way to short him is to see the reaction and follow thru on hiss picks after the crowd jumps onboard.

here is an example VPHM.
he recomended it on March 3rd and said it could do 50-100% but the buying got met with selling. and you can see what happened.
Andrew

So much for my theory that stocks would be held hostage to bonds... even today I am amazed that stocks can climb in the face of this bond dump.

A few updates on stocks I have mentioned in the past few months-

CHK- sold 1/2 on this rally, I'd like to see what prior sponsor, Ward does with his shares. Small loss on sale.

SYMC- clearly feeling good, long base, rising volume, good sponsor

TELK- ready to resume intermediate uptrend? broken out of short tern downtrend, good sponsor

VZ- sold 1/2 after it broke down from st uptrend and couldn't hold opening range this morning. Small gain.

long all mentioned

optionoracle-

Your views on THIS run-up? (And believe me I am not asking to be cute. I trade my own, and I decided to take some off the table.)

Isn't this like heads I win tails you lose (like music to a NR fans ears)?

"The biggest near-run risk for growth expectations, and thus commodity prices, is that the Fed tightens too much and the U.S. economy significantly disappoints. Still, such a setback would sow the seeds for renewed commodity gains because the Fed would go on an extended hiatus, given persistently low core inflation, and the dollar would resume its downtrend. Bottom line: buy industrial commodities on setbacks."

http://www.bcaresearch.com/public/story.asp?pre=PRE-20060330.GIF

stockman-

It's a thesis I have literally been banking on as you know. US equity slump caused by fundamentals and Fed provides tremendous LT entry points for the commodity bull market which, after a brief acclimative period, resumes in force. Only it's taking a long time to get here! Do they think they can reflate their way past the midterm elections, hmmm?

Really guys, what's the worry?

Bernanke's at the printing press, pumping up various asset prices and when there are enough bond shorts he will squeeze them, stocks will vault higher and we will all be rich.

So, just shut your eyes...buy, buy, buy...and hold...no worries...

Seriously, I am wondering where the equity buying will come from as this quarter ends.

Stockman, thanks.

“It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine - that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.� –Jesse Livermore, “Reminiscences of a Stock Operator� by Edwin Lefevre, 1923

On a public media such as this I know we have to rstrict ideas to larger cap / liquid names BUT I hope everyone appreciates that the best odds lay in the world of small caps, whatever your style or discipline for individual investors this is where the gold is. Not JMHO

SIZE matters-

http://www.cxoadvisory.com/blog/internal/blog3-27-06/

Well, I decided to take some profits today. Watched the price of gold go up while my mining stocks failed to keep up the momentum in the p.m. Will now look for an entry point and sit on the core position in the meantime.

I am also in the boat of having taken investment off the table, but have maintained core holdings in the form of leaps.

The breakout in gold is solid, though; the metal is now trading at $586. Based on the chart and the clean breakout, it would be intuitive to think we'd all now be talking about how we've added to our positions.

It would certainly have been more comforting if this upswing were driven by some combination of fundamental drivers, rather than 'news' that is no longer news / increased attention given to the precious metals complex.

If/when we are greeted with economic data indicative of a slowdown in the housing market and/or general economy, it is fathomable that the complex will drop like a rock.

Revisiting the precious metal bull of old (late '70's to early '80's), it can be seen that couched within the long-term upswing were unimaginable downswings, some to the tune of ~50%. I see nothing that would prevent such intermediate-term corrections from taking place during this cycle, wiping out many traders who are correct in their fundamental vision.

Take care; practice prudence.

academia-

Thanks for your thoughts. I hope you continue to post here frequently. We have a great group of readers.

I think some (including myself) are a little bit tentative on this move because it's "early". Personally, I was caught off guard by the little headfake on the daily gold chart which indicated a further move south a week ago. I saw the "bouyancy" in the action but still was convinced that the possible rise I was seeing would be short term. Then BOOM! So much for that.

Yes the charts show blue skies ahead. All indicators are positive except for the fact that its getting a bit overbought. Not terribly mind you but overbought just the same. I wouldn't be surprised at a move either way.

Lest people forget it is MARCH 2006. There are nine more months of this year to get a position in gold to carry you through the year if need be. More moves like we saw in November through January are in the cards. Miners will still double. The only caveats are a coming equity sell-off and the volatility in the PM complex, which should only increase (as foretold by g034 and others). $10 moves are going to become the norm. Last year it was $5 moves. At some point it will accelerate to $20 moves. The gold bull should continue for years. The U.S. is not going to fix it's problems overnight unless you want to bet that Bernanke allows a wrenching recession that purges the system. Anyone betting on that course?

If you don't have a position wait for the inevitable correction back to trendlines and enter. That's what I plan to do to get my trading stake back and even to add to GLD. I know that Bill doesn't prefer holding the underlying metal but for me it's better than CASH and should provide good insurance against what may be coming our way. It may be a better holding also if the markets get the April to October blues that so many are watching out for.

That's my thinking this early Friday morning. Might be some EOQ window dressing done today! (Which happens to have been my father's profession for 34 years until malls came along and there were no more windows to dress.) Back to taxes!

MarkM--

And that is my problem with investing on charts. As gold approached ~$568 two days back, I discussed its move higher with a technical trader friend (who, 'in real life', is a distressed securities analyst).

He forecasted, based on the chart, what seemed all too obvious: gold was ready to take a fall back to ~$540 after brushing resistance. My question to him follows:
"Isn't that move too obvious, though? What bothers me with that call is that every trader of dollar gold on the planet is looking at this chart and thinking the same thing. Even from a fundamental standpoint, I would have to concur, unless of course Bernanke ends up signaling that the end of hikes is at hand. I am just uncomfortable that everyone and their mothers will be trading on that same thought."

To me, it is obvious, that the long-term fundamentals supporting a bull market are intact. Those drivers of the value of gold have been aligning with one another in a fashion reminiscent to their alignment during the 70's and early 80's. Although our economic environment is quite different today, mainly due to the Fed's markedly effective management of inflation expectations, conditions not before seen perhaps make the case for gold today even stronger than during its previous bull market. In my view, the most important factor driving the price of gold has been and will be the unprecedented growth in emerging markets; MOST INTERESTING about this growth is the associated growth of dollar reserves held by foreign central banks. Japan holds between $850 billion and $1 trillion, China approximately $820 billion (forecasted to exceed $1 trillion by FYE 2006), and South Korea approximately $200 billion in dollar reserves.

Furthermore, on January 5, 2006, China's State Administration of Foreign Exchange (SAFE), on its website, indicated that it could begin to diversify its rapidly growing foreign exchange reserves away from the US dollar and government bonds – a potential shift with significant implications for global financial and commodity markets.

In a brief statement, the Chinese government's foreign exchange regulator said one of its targets for 2006 was to “improve the operation and management of foreign exchange reserves and to actively explore more effective ways to utilise reserve assets...(in order) to improve the currency structure and asset structure of our foreign exchange reserves, and to continue to expand the investment area of reserves.� (This, in my opinion is what drove gold higher at the beginning of '06.)

With time, I believe similar shifts in policy are likely to be announced by other Asian central banks, marking a secular shift out of the US dollar and potentially into other currencies but more likely out of financial assets and into hard assets. I believe such moves will increase the upward momentum in hard asset valuations and will especially benefit gold, which occupies a significantly smaller percentage of emerging economy central bank reserves (10% of central bank reserves).

Also, as many on this blog believe, I also believe that inflation is gradually TRENDING higher (meaning that I don't YET believe it to be a problem in any way, shape or form), but may not emerge as a threat until late in 2006. It goes against intuition to have seen big commodity moves unaccompanied by sizable advances in the inflation indices. I believe that the reason for this is that China and India and other emerging countries are changing the balance of supply-demand in labor. They are contributing to a global surplus in labor, such that the pricing of labor in China, for example, is holding down the pricing of labor in the US; and, this is contributing to disinflation in the pricing of manufactured goods and increases in productivity. This surplus of labor, coupled with changes in productivity, has effectively negated the price rise from commodities.

However, world economies are now late in the economic cycle, and as we traverse 2006, the economy will run out of slack, such that the inflation-containing forces become insufficient in negating the effects of depreciation in the value of the dollar and further appreciation in commodity prices.

With the fundamentals intact for long-term price appreciation, I have found it prudent to maintain a core holding in my portfolio, regardless of short-term price fluctuation. Like many here, my above-mentioned trader-friend has missed out on gold's big moves (both the one beginning in Oct '05 and yesterday's), by trading solely based on technicals -- chart patterns that the entire trading world has come to recognize and trade off of. Such wide-spread following is what now has me questioning yesterday's "breakout". It will attract many more eyes, all of which will interpret the move as one and the same, a beautifully clean "breakout". I stress caution, and would rather add to my positions after gold takes a huge hit, falling "back down within its prior trading range" or, better yet, even lower.

With that said, I should qualify my definition of core holding as one that will NOT wipe me out if the gold price takes a 50% hit during its voyage higher (and, I do anticipate this to eventually happen).

Take care; practice prudence

I should mention that I do, however, trade around my core holdings...because it is fun. Looking back over time, though, the greatest moves and the biggest money made in my account have been resultant of these 'core' holdings. My record in trading around them has been mediocre (but fun).

I should mention that I do, however, trade around my core holdings...because it is fun.

Looking back over time, though, the greatest moves and the biggest money made in my account have been resultant of these 'core' holdings. My record in trading around them has been mediocre (but fun).

Academia-

Thanks for your thoughts. Could I ask for a clarification? What would be the thesis for a 50% correction in gold's price? Would it be a stock market swoon? A technical adjustment? I ask because although this bull run has seen corrections down to its 200dma, such a move has been absent lately and may continue to be, since Phase II of the run has quite likely arrived.

BTW, I "trade around" also and the Sched D I am filling out "seems to indicate" much the same thing regarding my skills! :) However, I can say that 2005 was a good bit of learning and I consider myself better equipped going into 2006 (or so my ego wants me to believe).

To MarkM:

Ciao

carriertom-

Okay, I'll bite. What does that mean (other than goodbye?)

Yeah, I don't get it either? My guess is, he's saying that you won't get a re-entry point because gold is going up; although today's retracement belies that assertion somewhat.

EJ-

I would be surprised if that's his meaning. This isn't the kind of forum where snide comments are usually made. Bill won't abide it.

MarkM

Oh no, no, no, no. Sorry guys, I thought you knew. You read me too deeply, Stockman. I am not that bright.

Mark plunked down dough for the Elaine G letter. She signs off with "ciao", not "so long" or something else. That's all I meant, nothing more clever than that.

With Elaine, as I mentioned the other day, I subscribed and came to regret it. She "ciaoed" me until her indicators gave a false negative. Then it was a more modest sign-off for a while.

But it was just wrong place, wrong time, wrong mindset on my part. I'm sure she's very good.

Ahhh, I remembered that but I didn't make any connection to the topic string.

BTW, I DIDN'T subscribe to her newsletter. That was just me being funny. I don't agree with her thesis at all. The performance of the market doesn't agree either. You can't have the late cycle rally that she posits when commodities are going through the roof, interest rates are rising, gold is a moonshot etc etc. It just doesn't make any sense. I'll take my cues from Bill, stockman, g034 and the others here.

he'll take his cues from the "stockman" not ejstockman... i'm one of sheep, not the shepherd...

GLD down over 1% at 325pm. But, sigh... Watching my USGL up another 10% after I took profit yesterday. That must be some company. :)

Waiting anxiously for a retest of lows... Higher lows.

MarkM,

The '50% correction' is my approximation for a worst case scenario and is based on based upon the largest corrections in the spot price of gold during its bull of old.

Such a correction is not probable, but should not be ruled out in the process of portfolio construction. (Obviously, based solely upon the apparent, a large correction can be expected if several economies slow in unison.)

Academia-

Gold flourishes when economies turn down. Why? Because interest rates get cut in order to restimulate. That increases gold's monetary equivalent value. For more on this topic vistit John Hussman's site (www.hussmanfunds.com)and read his article on gold. It's under his Favorites heading.

All-

Here's that link. I really enjoy John's writing.

http://www.hussman.net/html/gold.htm

Yes, MarkM, but I refer to the gold stocks, which I hold in my portfolio. Most of the equities in this industry are near 0 Beta; however, when worst comes to worst, correlations converge and when markets tank, these equities recouple with the market and are severely affected by the downdraft among them.

It takes some amount of time for the equities to decouple/'break free' of market influence and to recouple to the price of gold.

I just reread my previous comments and have noticed that I am speaking from 2 different pages.

Here, I'll clarify. With regard to gold spot: If global economies slow in unison as the result of a global decline in aggregate demand and if we enter deflationary recession, then gold spot is negatively affected.

With regard to gold stocks: Over past equity market downturns, gold equities have followed the broad market downward, in essence decoupling from gold spot for some time before again marching to their own tune.