The Dollar vs. A Basket of Others

[Guest]

Re: The Dollar vs. A Basket of Others

... The 61.8% Fib retracement is about $15 though, and gold & silver have been known to track each either other pretty well now & then. ;)

I thought so too, although arrived at by strictly untutored means - that somewhere around $15 for silver seemed "about it" for mid 2008 and a nasty correction. But WTFDIK. Could easily be too optimistic.

BTW, your second chart there evidences a break of the 200 day MA right in around September / October of 2006 which looks suspiciously similar in action to the current 200 day line break. Very ambiguous as that turned out to be a total head-fake on gold's subsequent price direction.

So that's another point, these "major red flags" seem to be rules which get ignored by the market's action just often enough to keep us all guessing as to how reliable they even are as major signals. Look at that scary trend line break in late 2006, which signified "not much of anything".

Of course after having gleaned this fabulous insight the market will likely smack me across the head next week just to prove I didn't understand or decipher a damn thing about the 200 day MA's signifiers. I'm feeling like a prime candidate for "hamburger-meat" this weekend. :p

[bart]

Re: The Dollar vs. A Basket of Others

I thought so too, although arrived at by strictly untutored means - that somewhere around $15 for silver seemed "about it" for mid 2008 and a nasty correction. But WTFDIK. Could easily be too optimistic.

BTW, your second chart there evidences a break of the 200 day MA right in around September / October of 2006 which looks suspiciously similar in action to the current 200 day line break. Very ambiguous as that turned out to be a total head-fake on gold's subsequent price direction.

So that's another point, these "major red flags" seem to be rules which get ignored by the market's action just often enough to keep us all guessing as to how reliable they even are as major signals. Look at that scary trend line break in late 2006, which signified "not much of anything".

Of course after having gleaned this fabulous insight the market will likely smack me across the head next week just to prove I didn't understand or decipher a damn thing about the 200 day MA's signifiers. I'm feeling like a prime candidate for "hamburger-meat" this weekend. :p

Amen and who knows where the correction will actually end, other than it ends when the actual down trend reverses (*duh*).
I never try and second guess a bottom, and always wait for the market to tell me when it has changed trend.

Very true on the 200 dma almost always being violated, its just a characteristic of volatile markets like gold, and especially silver. The 65 week and 400 dma are a bit better but aren't a grail either.

[c1ue]

Re: The Dollar vs. A Basket of Others

On one hand here you eschew "chartists" which I presume means technical analytical methods, and numerologists, but at the same time put forth what surely is your own unsubstantiated speculation with a time-frame no less as to what might happen.

Do you care to explain how you arrived at the current drop in gold as being recognizable as a "major correction" and on what basis you believe or know that once an asset is into a "major correction" that it will go two to three years? Your commments read to me that you are some sort of a "closet" technical analyst or heavens forbid even a numerologist.

Jim,

I spit on technical analysis, but it doesn't mean I don't try to understand what the astrologers are mumbling to each other.

There have been numerous cases in the past where I've made money because there is a certain amount of cash following these policies.

As for the drop in gold - my view is actually very simple, as I am a simple person:

1) Most people still don't believe in gold. They are looking for reasons for it to drop and those who reluctantly bought some, will dump it as soon as it appears they will lose money
2) Most people operate by short term memory. One item, 2 items, many is common for physical objects, and for memory it is 1 day, 1 week, 1 season, forever. However, in this case our society is so structured around the year that a lot have progressed to the 1 year, 2 years, forever stage.

Thus what people remember of prices 'way back when' is the lower range I speak of - given that gold is unlikely to have an Enron/Worldcom style event.

As for the mechanism, it is dollar strengthening due to reaction against the Euro's recent strength/EU's recent economic fairy tale ending.

Most of my financial and economic moves are predicated on seeing what the herd is doing and will do, then doing something different.