Bullish Information

[Jim Nickerson]

Re: Bullish Information Re. II bearish sentiment.

looks to me like the time to trade the bulls and bears was back in march 08 when the index was -10. anyhow... the correlation to the s&p is high but i do not see anything predictive about the bulls and bears... when it's up, the s&p is up, when it's down the s&p was down... it follows doesn't lead. what use for trades is an index with no predictive value?

metalman, I don't know if "predictive" is the best word or not. "Suggestive" of subsequent market direction is when extremes in investor sentiment seems at least to me to be useful, and my opinion is the extremes of lows are better near-term indicators than are extreme highs.

Another thing to consider is that betting (investing) is a piece of cake when one looks back at how things have gone--which your opening line seems to indicate. Knowing what to do tomorrow is the goddammed difficult part of my life, and I expect it is the same for most people, unless their bet is that regarding their opinion they believe they are right and choose to sit tight--to paraphase someone. For those who can do that, that is fine with me. I can't do that.

When I look at the bottom panel of the graph, it suggests to me that when the bull/bear difference is at or below zero, since 1998, it has been rewarding to be long the SPX, though not all the uptrends from those low indications were good for longterm buy and hold mentalities.

Right now, Friday, the DJI is near its 6-month lows, and as is posted elsewhere the other major equity indices are not so low as they were earlier this year.

I guess you read investment stuff as much or more than I do, but after reading for the past week, there is almost nothing I have encountered that suggests the markets are going anywhere but down.

This thread is open to all, including spooks like yourself, and it would be nice right now if anyone would put up some bullish arguments they are encountering if for no other reason than what might be the novelty of anyone venturing bullishness.

I definitely do not think anyone should act upon my opinions, but presently I expect the other indices are either going to correct mightily to bring them more in line with the DJI, or either there is going to be an upward bounce in here because of the rather extreme pessimism that currently is flourishing.

[Jim Nickerson]

Re: Bullish Information Re. II bearish sentiment.

I wonder if "never" goes back further than 1998?

Rob, just for clarification, it was not I who wrote the statement that included "never." It came from David Fuller about whom I do not know anything.

Perhaps bart has the data of Investors Intelligence that would show a longer time frame than just back almost 10 years and would be kind enough to graph it versus the SPX performance. He might be like I was when Barron's stopped publishing II data as a freebie for those who subscribed to Barron's. II cost too much for me to just to continue to collect that data. Currently II data is available free but there is no access to longterm data there.

If one chooses to bet only on things that are just "sure bets," then I for one would never bet on anything. I will gamble on what appear to me to be good bets with regard to stock market movements.

[Jim Nickerson]

Re: Bullish Information Re. Oil Bubble?

I'm not intending to continue the argument whether or not oil is in a bubble, but below is a technicians perception from 6/20/08.


http://www.decisionpoint.com/ChartSp...80620_oil.html

While fundamentals play an important role in futures prices, human emotions are also a big part of the mix. Occasionally, like now, irrationality rules the day and a price bubble forms. The easiest way to tell that a bubble exists is to check the monthly-based chart for a parabolic formation. This is w[h]ere prices move higher in an accelerating curve that eventually becomes vertical. On the chart below, you can see that this is the case with crude oil. This is a sure sign that prices are no longer connected to reality.

You will notice that just eighteen months ago oil was at $50/bbl. Now it is nearly three times that price. Have fundamentals changed so radically during that time? Of course not. The same kind of irrationally is at work in the oil market as we currently have in the housing bubble, and as we had in stocks in 2000.



The expansion in the number of oil mutual funds and ETFs has also placed a lot of demand for oil futures contracts. While this has helped drive prices higher, remember, it is a two-way street. When the parabolic finally breaks, there will be a stampede for the exits.

I can't guess how high oil prices will go, but eventually there will be a catalyst of some sort, and prices will fall almost vertically, quickly bringing oil prices back in to the realm of reality. The most obvious catalyst would be if congress lifted the ban on domestic drilling. While that doesn't sound likely now, the rising price of gasoline may eventually turn the screws enough to change some minds.

One could certainly argue Swenlin's observations are bearish for oil, but I placed the reference here, because if oil were to undergo a significant correction, I take it as bullish for most everything else, though a question of duration of such potential bullishness would then arise.

[Jim Nickerson]

Re: Bullish Information Re. Reality TV an omen?

Reality Check By JACQUELINE DOHERTY Barron's 6/23/08

http://online.barrons.com/article/SB121400300766893327.html?mod=9_0031_b_this_weeks_ magazine_columns [Subscription]

When reality shows feature the market, a bottom may be near.

CRUDE OIL PRICES NORTH OF $130 AND $4 GAS ARE STARTING to hurt. They've pinched consumer spending. They've sent food prices soaring and squeezed corporate profit margins. They've stoked inflation fears. And all that seemed to catch up with stocks last week as the Dow Jones Industrial Average fell below 12,000 Friday, with the S&P 500 retreating toward 1300.

Oil punched out FedEx (ticker: FDX), whose shares dropped to 80.54, a three-year low, after the company reported operating costs increased 16% in its May quarter in part owing to higher fuel costs. General Motors (GM) shares, around 14, have returned to levels last seen in the 1970s, as consumers have stopped buying gas-guzzling SUVs. And on Friday Mexico's central bank was the latest to raise interest rates to combat inflation stoked by higher food and oil prices.

The market's latest tantrum led us to wonder how soon it will be before a ray or two of optimism penetrates the gloom. What if, say, the recent surge in oil prices is indeed a bubble soon to burst, as my colleague Andrew Bary suggests in this week's cover story? Andrew lays out in riveting detail the many reasons why oil could peak, to which we'd add a few more. Like last Wednesday's launch of the latest reality show Black Gold. Airing on the truTV channel, it follows the fate of three groups of guys competing to hit oil first in Texas.

Why should the financial markets care about the latest reality-TV offering? Because the debut of other market-oriented shows marked the top of two previous bubbles. In 2000, just as dot-com stocks were approaching the moon, Fox launched The $treet and TNT offered up Bull, both short-lived series about the financial world. Likewise, as the housing sector roared in 2005, shows about real estate and home renovations popped up on the tube like McMansions. Among our favorites: Flip This House on the A&E Network, not to be confused with Flip That House on TLC. Both remain on air today.

So, could it be more than coincidence that Black Gold caught our eye just a day before China announced that it would cut subsidies on gasoline and diesel?

The folks at Strategas Research Partners cite another contrarian sign: Since 2000, companies that have been added to the S&P 500 have lost 6.6% on average over the next 12 months, while those removed have gained an average of 21.7%. So what companies have been added of late? Southwestern Energy (SWN), Cameron International (CAM) and Range Resources (RRC), among others. And what's out? Financial and consumer names, like Ambac Financia l (ABK) and Circuit City Stores (CC), and companies that were acquired, including Bear Stearns and Tribune.

If the price of oil falls to $100, then recent inflationary pressures, which have the markets in a lather, will recede. The Federal Reserve won't have to raise rates aggressively. Borrowing costs can stay low. The market's earnings multiple won't compress, as it does during inflationary periods. And the Treasury-bond yield curve will remain steep, helping finance companies reflate their depressed earnings.

Certainly, the markets weren't forecasting such a future on Friday. But Thomas Lee, chief U.S. equity strategist at JPMorgan, has held onto his year-end S&P 500 target of 1450. He forecasts a second half in which the U.S. economy shows signs of recovery while higher interest rates abroad result in slowing growth in the emerging markets. The U.S. market has outperformed many foreign markets so far this year, and if Lee is on the money, that will continue. Time to change the channel?

LAST WEEK CITIGROUP ONCE AGAIN SPOOKED the market by warning investors it would report large loan write-downs in the second quarter. Analysts now expect write-offs of around $10 billion and, as you'd expect, the shares fell with a thud -- down 6% on the week, to 19.21. Citi (C) now is down an eye-popping 65% from its 2006 peak and trades just a tad north of its March low.

Even after the latest news, Dick Bove, an analyst at Ladenburg Thalmann, is positive on the shares. Write-offs will continue, he says, but the bank has raised billions in capital; it's adding low-cost deposits, increasing its loan volume, controlling costs and improving margins.

Write-offs are like the proverbial pig swallowed by a snake. They take time to work through, and the snake doesn't look too pretty. But once Citi's cleansing is over, Bove says, the company will look better than before. His price target: $25.

Here is one bullish article.

[bart]

Re: Bullish Information Re. II bearish sentiment.

Perhaps bart has the data of Investors Intelligence that would show a longer time frame than just back almost 10 years and would be kind enough to graph it versus the SPX performance. He might be like I was when Barron's stopped publishing II data as a freebie for those who subscribed to Barron's. II cost too much for me to just to continue to collect that data. Currently II data is available free but there is no access to longterm data there.

Unfortunately I neither track it nor do I know where to get data prior to what that chart shows... but do have my own sentiment (calm or greed vs. fear or panic) index that I finally tuned up this year, and it goes back to 1990.

Although I did splice in other data since things like VIX don't go back into the '70s, my work isn't public yet for periods prior to 1990. I'm still in research mode on it.

[friendly_jacek]

Re: Bullish Information

Jim,
I agree, this was a good time to turn bullish again. I did that after the reversal yesterday when dow bounced from the support at 11,750. This time the signals were very mixed and not as clear as mid march or mid august 07, but nevertheless the negative sentiment was peaking indeed.
If the oil drops, as it should (ouch, I'm underwater on that trade), there should be a huge equities rally. By equities I mean any equities as everything is synchronized these days thanks to leveraged hedge funds. I personally like the FXI play.

[Jim Nickerson]

Re: Bullish Information

Jim,
I agree, this was a good time to turn bullish again. I did that after the reversal yesterday when dow bounced from the support at 11,750. This time the signals were very mixed and not as clear as mid march or mid august 07, but nevertheless the negative sentiment was peaking indeed.
If the oil drops, as it should (ouch, I'm underwater on that trade), there should be a huge equities rally. By equities I mean any equities as everything is synchronized these days thanks to leveraged hedge funds. I personally like the FXI play.

jacek, you, I and the guy in the article below must be the only three people in the world with any bullish sentiments, and after Thursday and Friday, mine have waned. Whew!

http://www.telegraph.co.uk/money/mai.../ccprof130.xml
Larry Kantor: The one bullish American economist amid the growling bears


By James Quinn, in New York
Last Updated: 1:20am BST 30/06/2008

Larry Kantor is not like other economists. While his peers have been engaged in a vicious spat as to who can predict the darkest scenario for the American economy, Kantor has been quietly and self-assuredly forecasting quite the opposite.

	Larry Kantor: upbeat on the US

In spite of oil closing at a new all-time record above $140 on Friday, more than one million Americans facing the loss of their homes, and major US stock markets on the verge of entering a bear market, Kantor remains one of a small band of economists to remain positive on the prospects for US financial wellbeing.

Kantor, global head of research at Barclays Capital, predicts that the US economy will experience a growth rate of 3pc in the second half.

Kantor's impression on the current situation is about 100% counter to any sentiment that I have developed.

Were he to be right, history would mark him as having taken one helluva contrarian stance.

[Orforded]

Re: Bullish Information

This guy Kantor sounds like my broker, "financial advisor" in reality as I recently figured out he's nothing more than a mutual fund salesman. (I mean my advisor, not Kantor, I can't speak for what he is) I ordered my "advisor" against his "advise" to sell all my personal equity positions in the beginning of May. Saved many thousands of dollars. Now in cash with tiny position in DXD for the fun of it.

A larger problem is that he is also handling the profit sharing 401k plan for my business which he still has about 60% in domestic and international equities. I don't dare manage this account myself but don't know who to turn it over to.

Unlike Kantor I see no hope for US economic recovery in the short or long term. Who will come to the rescue? The Fed? No can do, between the rock of needing to keep capital as liquid as possible to avoid deeper recession and the hard place of inflation fostered by among other things low interest rates. SWF's why should they invest in this second rate currency or for that matter in this dying economy? The so-called cash on the sidelines? More and more of the US investors money is going overseas where the action is. I see nothing in our economic prospects to bring it back. Soon BRIC consumers will be more significant than US consumers and flight of capital and business away from the US will be complete. And we will then begin the era of our permanant status as a second tier economy. I.e. no recovery of stock market ever. I hope I am wrong about this and if anyone can point out why I would appreciate it. So far all I hear in response to these arguments are platitudes about American "resilency" "ingenuity" etc as if we have the market cornered on these characteristics. Give me a break.

[Jim Nickerson]

Re: Bullish Information

This guy Kantor sounds like my broker, "financial advisor" in reality as I recently figured out he's nothing more than a mutual fund salesman. (I mean my advisor, not Kantor, I can't speak for what he is) I ordered my "advisor" against his "advise" to sell all my personal equity positions in the beginning of May. Saved many thousands of dollars. Now in cash with tiny position in DXD for the fun of it.

A larger problem is that he is also handling the profit sharing 401k plan for my business which he still has about 60% in domestic and international equities. I don't dare manage this account myself but don't know who to turn it over to.

Unlike Kantor I see no hope for US economic recovery in the short or long term. Who will come to the rescue? The Fed? No can do, between the rock of needing to keep capital as liquid as possible to avoid deeper recession and the hard place of inflation fostered by among other things low interest rates. SWF's why should they invest in this second rate currency or for that matter in this dying economy? The so-called cash on the sidelines? More and more of the US investors money is going overseas where the action is. I see nothing in our economic prospects to bring it back. Soon BRIC consumers will be more significant than US consumers and flight of capital and business away from the US will be complete. And we will then begin the era of our permanant status as a second tier economy. I.e. no recovery of stock market ever. I hope I am wrong about this and if anyone can point out why I would appreciate it. So far all I hear in response to these arguments are platitudes about American "resilency" "ingenuity" etc as if we have the market cornered on these characteristics. Give me a break.

As I recall, you were hoping/waiting for a bounce to liquidate some things that were losers. I am glad you got the opportunity you were seeking.

From what I recall, "overseas" may not be totally immune to what's happening here. Right now China is off 51%, India 38%, Russia 11.5% and Brazil as I write 13.5%. Presumably they will recover but who knows when.

If you are happy with your decisions on your money outside your plan and unhappy with the guy's, it would be a simple decision for me: manage all your own money. Take personal responsibility for your financial future.

[Orforded]

Re: Bullish Information

Jim, yes I finally mustered the courage of my conviction and sold all my personal equity positions in the last market bounce in late April, when the Dow was just under 13,000. As for the profit sharing/401k plan, although the bulk of that asset belongs to me I am also a ficuciary for my employees. I don't think I have the experience or know how to make financial decisions for others. That's the problem. I think as a fiduciary I am obliged to have a professional at least technically responsible for the account. The question is how to find a good one.

[Jim Nickerson]

Re: Bullish Information

Jim, yes I finally mustered the courage of my conviction and sold all my personal equity positions in the last market bounce in late April, when the Dow was just under 13,000. As for the profit sharing/401k plan, although the bulk of that asset belongs to me I am also a ficuciary for my employees. I don't think I have the experience or know how to make financial decisions for others. That's the problem. I think as a fiduciary I am obliged to have a professional at least technically responsible for the account. The question is how to find a good one.

I have no intimate knowledge of John Serrapere who has contributed here, or if your money is enough for someone as he to take you on as a client. It pops into my mind that he hedges his investments. Maybe someone uses him, or has. Search for his articles here and there may be contact information. Just an idea.

[friendly_jacek]

Re: Bullish Information

jacek, you, I and the guy in the article below must be the only three people in the world with any bullish sentiments, and after Thursday and Friday, mine have waned. Whew!

http://www.telegraph.co.uk/money/mai.../ccprof130.xml
Larry Kantor: The one bullish American economist amid the growling bears


By James Quinn, in New York
Last Updated: 1:20am BST 30/06/2008



Kantor's impression on the current situation is about 100% counter to any sentiment that I have developed.

Were he to be right, history would mark him as having taken one helluva contrarian stance.

I'm not a permabull and I never heard of Kantor. I actually believe in great depression coming in the next few years. However, the market never goes in a straight line and one can make money both ways. Now, it sounds like the oversold markets will rally for a few weeks or months before plunging more. I admit, that I covered my shorts a few days to early, my timing is less than perfect, but I'm buying heavily now. Today, it sounded like a reversal day. This strategy worked very well for me in August 07, January 08 and March 08. I hope it will work now. It better, as I lost some money shorting oil.

[Jim Nickerson]

Re: Bullish Information

I'm not a permabull and I never heard of Kantor. I actually believe in great depression coming in the next few years. However, the market never goes in a straight line and one can make money both ways. Now, it sounds like the oversold markets will rally for a few weeks or months before plunging more. I admit, that I covered my shorts a few days to early, my timing is less than perfect, but I'm buying heavily now. Today, it sounded like a reversal day. This strategy worked very well for me in August 07, January 08 and March 08. I hope it will work now. It better, as I lost some money shorting oil.

jacek, I believe you and I are using the same faulty crystal ball. One can make money both ways, IF you get the timing correct. You are correct, the equity markets are oversold, but they were oversold as far back as 6/12, 6/24. and certainly the 30th. I believe only the NDX had a key reversal day today. I was moderately long today, but hit stops right at the bottom of today's down move. I hate to get pissed off at anything the markets do, but that pissed me off. PM's have kept me afloat barely for the past week, and their charts (GLD and SLV) look okay to me. I think I would like to see a bottom on the RSI and some indices and then see a test of that low or a lower low with a positive divergence setup in the RSI and MACD. If you are long, and I am not, then you are probably nicely positioned to benefit from a pop up in here. Hussman has said at times like now, the markets may experience a fast, furious upward move that is prone to failure.

I'm resting for a while.

You mentioned FXI a post or so up. Right now $SSEC on stockcharts.com seems to be setup or is setting up technically for an up-move, BUT I think it needs to go up and breakout above 3000 at least. Otherwise buying in here is bottom fishing and my usual experience is the bottom keeps getting deeper.

[Jim Nickerson]

Re: Bullish Information Re. Hulbert

This is now two days old, but possibly pertinent to those who find any usefulness in sentiment.
http://www.marketwatch.com/news/stor...&dist=morenews

MARK HULBERT
Was Friday the bottom?

Commentary: Capitulation watch continues, but contrarians see bullish omens


By Mark Hulbert, MarketWatch
Last update: 11:33 p.m. EDT June 30, 2008

ANNANDALE, Va. (MarketWatch) -- Did the Dow's close Friday represent the closing low of the correction that began last fall?


When I last reviewed the sentiment evidence from a contrarian perspective, 10 days ago, I argued that advisers had yet to throw in the veritable towel and that, therefore, the capitulation that contrarians look for to mark a bottom had yet to take place. I quoted Ned Davis of Ned Davis Research as saying: "We may need more extreme pessimistic sentiment before we can call sentiment clear-cut bullish."

Since I wrote that column, the Dow Jones Industrial Average ($INDU: has fallen more than 700 points, and -- not surprisingly -- advisers have grown more discouraged.

But have they become discouraged enough to satisfy contrarians' requirement that pessimism become extreme?

Let's take a look at the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term stock market timing newsletters tracked by the Hulbert Financial Digest. When I wrote my June 19 column, the HSNSI stood at minus 24.5%. At the close on Monday, June 30, the HSNSI stood at minus 35.9%.

So, in the wake of a greater-than-700 point drop in the Dow, the average recommended equity exposure among short-term market-timing newsletters has fallen by 11.4 percentage points.

That may be low enough to qualify as capitulation, but I'm not so sure. It's a close call.

Contrarians would be more confident that this is a bottom if there had been a more precipitous decline in bullishness over the last couple of weeks. As it was, the decline appears to be a tad too orderly to be classified as, "throwing in the towel."

To be sure, bullishly-oriented contrarians can find at least some degree of support in the sentiment data. At minus 35.9%, the HSNSI is now lower than it's been any time this decade - lower even than where it stood at the end of the 2000-2002 bear market.

That's a bullish omen.

Another bullish omen: The slightly higher low to which the HSNSI descended at the market's March lows (minus 29.4%) was still bearish enough to be the springboard for a rally of more than a thousand Dow points.

What do the contrarian-oriented newsletter editors have to say?
Michael Burke and John Gray, editors of Investors Intelligence, are moderately bullish. Last week they reminded subscribers that "bottoms take time to complete." They aren't necessarily saying that the exact bottom has been seen, but they do think we're in a bottoming process.

Richard Band, editor of the Profitable Investing newsletter, is forecasting a bounce. He wrote after the close Friday, "We're in a very tough phase for the stock market, and there may well be more thunder and lightning before the storm passes. But a sharp bounce is coming."

Band, you may recall, was forecasting in late March that the Dow would reach the 16K level by late this year or early 2009. See March 27 column
Band didn't mention that forecast in his communication to subscribers Friday. But, in any case, the rally that he is forecasting this time around is on a smaller scale than what he was recommending then: "We're due for a rebound," he says, "possibly a furious run-up lasting three or four weeks."
Mark Hulbert is the founder of Hulbert Financial Digest in Annandale

Using some breadth indicators the equity markets have been oversold back to 6/11/08 using the McClellan oscillators for the NYSE and Nasdaq, and using advance/decline data from 6/23/08 almost continuously except for 6/25/08. And this oversold condition persists through today's close 7/2/08.

OEX put/call ratios since 6/23 have tended toward bullishness with all ratios below .89 except for 1.32 on 6/30 and 1.53 tonight. If it is correct that the OEX represents the "smart money," then the "smart money" has been relatively bullish while the SPX was losing 78 points.

Despite the significant drops even accelerating with DJI having some daily losses of -358, -106, -167 points in the last 5 days, the Equity put/call ratio reached its highest on 6/20/08 at 0.91. Now with the SPX 71 points lower today than on 6/20, the Equity put/call ration is at 0.71. Remember this is supposed to be the "dumb money." Usually the "dumb money" gets frightened as the market declines to new lows and the put call ratio generally gets close to 1.0 or higher. Back on 1/15/08 the Equity put/call ratio got up to 1.05. On 3/6/08, two days before the low of the SPX the put/call ratio was at 1.12.

Even though the markets are at or nearing the previous lows of the year from Jan. and Mar. there seems to have been no capitulation that I see from looking at my own data, and this goes along with what Hulbert noted in the first bolded paragraph above.

Also the VIX has not yet reached the heights it reached back in Jan and Mar when it got to 31.01 on 1/22/08 and 32.247 on 3/18/08. The VIX was at 25.92 tonight.

Last week the II bull, bears, neutral were 33.7 33.9 and 27.0 respectively.

The AAII data were 31.3 52.3 and 16.5. These latter data were through last Wednesday before the DJI lost 465 points over the next two days and 600 total through today's close from a week ago. AAII bulls got down to 19.6 in Jan and bears up to 58.9, and bulls 20.4 and bears 59.2 in March.

My conclusion for the moment is even though the markets are very oversold, based on reported sentiment the sentiment does not reflect much fear, but new sentiment figures were being collected through today for AAII and perhaps through last Friday for II. I have to presume when reported they should be more bearish that the figures I noted above. Ah, just checked II data which come available sometimes on Wednesday at
http://www.schaeffersresearch.com/st...inv_intel.aspx

Bulls 31.9, bears 44.7, neutral or for a correction 23.4.

I think the markets can still hit a low in here and for sentiment to get a bit worse which should then lead to some upward bounce in the equity indices. Understand that is my opinion.

[Jim Nickerson]

Re: Bullish Information Re. Gold $1200?

http://www.marketwatch.com:80/News/Story/Story.aspx?guid=a0027fb3a3bb41db94196837a51bee7e&siteid=nwhnwhnr&sguid=-w8tVxDtyUmg6jBl4jGhbg

PETER BRIMELOW 6/29/08
Fed's flinch galvanizes gold

Commentary: One expert sees price topping $1,200 an ounce this year

NEW YORK (MarketWatch) -- The Fed flinch galvanizes gold, and the gold bugs think victory is at hand.

Comex August gold closed Friday at $931.30. Australia's The Privateer, adhering to a refreshing national tradition of blunt expression, wrote: "In what is an all but unprecedented event, gold has soared almost $50 straight up in the immediate aftermath of an FOMC meeting at which the Fed did what (almost) everybody expected them to do -- precisely nothing.

"But it was not the Fed's lack of action that galvanized financial markets, it was the amazingly fatuous 'reasons' they gave for their decision not to decide in the official press release ... Then the stress really did make itself felt. ... Gold woke up with a vengeance. In short, everything that Mr. Bernanke and crew have been desperately seeking to avoid for months blew up in their faces at once. The signal could not have been clearer, and it was heeded. The Fed is helpless."

The Privateer's magnificent $US 5x3 long-term Point and Figure chart turned upwards decisively. See chart

Dan Norcini of Jim Sinclair's MineSet Website wrote on Thursday: "Boy howdy, did the market waste no time in letting Ben know what it thought about the recent FOMC statement! Gold began recovering from its yesterday-morning beating minutes after the FOMC statement hit the wire yesterday afternoon Bernanke's bluff has been called and the weakness of his hand revealed ..." See Website

Dow Theory Letters' Richard Russell added: "Gold began a vicious correction in early-March. The chart suggests that the correction is almost over. If August gold can close above 934, that should end the correction."

Physical offtake from India continues, according to Bill Murphy's LeMetropole.com, which judges by the Indian gold price's premiums to world gold that it calculates regularly. See March 31 column See Website

Murphy's stable of writers regard this as critical. If India, far and away the largest bullion importer in the world, is willing to buy, then gold bears simply will not be able to make much downside progress.

There's a real juncture there. It's a generation since the financial community regarded the Fed with contempt. But memory (alas!) serves to say when the Fed is so regarded, a t was in the 1970s, there are dramatic consequences, especially for gold. Dan Norcini remarked on Friday:

"This has the 'feel' of being the real deal. Inflation is becoming a serious threat ..."

Norcini, whose frequently acidic gold comment is usually posted within a few minutes of the Comex close, is reportedly a professional trader in other areas. Gold bugs take his comments very seriously.

Jim Sinclair, the proprietor of MineSet, has a history of brilliant business decisions in the gold area. Having recently resurfaced after many, many, years, he said on Friday: "The price of gold will find resistance at the high $950s and again at the major round number of $1,000. The opposition at the latter level will have more gusto.

"The second try on $1,000 will be followed by a modest reaction. After this reaction, a third attempt will see the price of gold burst upward through $1,000. "The pull from the $1,200 magnet is irresistible and will be accomplished in 2008. All else is noise."

JN emphasis