34 replies to this topic

[zoropb]

60% short avg. 1175 just now I think 10+- upside to 132 downside for odds here.

[Squiggy]

60% short avg. 1175 just now I think 10+- upside to 132 downside for odds here.

I've been researching what news might have crippled the gold rally at this time of year in 2007. Something happened that caused the dollar to spike out of the blue with no warning. This came a day after gold had a very mild down day following its high. The 'something' coupled by the weak day in gold was enough to break gold's rally and gold fell -8.3% in less than two weeks from its high on 11/08/2007. In the Fall and Winter of 2007 the Fed was lowering rates at every meeting so there is no need to raise rates in order to produce a dollar rally. It can be achieved by other means.

I believe this may have been that 'something' (although I have not finished researching)...

http://www.bloomberg...id=a0Droxt1g__E

Nov. 12, 2007 (Bloomberg) -- Central banks from Bogota to Mumbai are imposing foreign-exchange curbs to take control of their soaring currencies from traders dumping the dollar.

In Colombia, international investors buying stocks and bonds must leave a 40 percent deposit at Banco de la Republica for six months. The Reserve Bank of India created a bureaucratic thicket to curb speculation by foreign money managers. The Bank of Korea is investigating trading of currency forward contracts to limit gains in the won, now at a 10-year high.

Instead of using currency reserves or interest rates to influence foreign exchange markets, central banks and finance ministries are setting up obstacles to keep the falling dollar from threatening company profits and economic growth. The U.S. currency slumped 10 percent this year against its biggest trading partners, the steepest decline since 2003, while Treasury Secretary Henry Paulson has reiterated that the U.S. supports a ``strong'' dollar.

[goldswinger]

60% short avg. 1175 just now I think 10+- upside to 132 downside for odds here.

I've been researching what news might have crippled the gold rally at this time of year in 2007. Something happened that caused the dollar to spike out of the blue with no warning. This came a day after gold had a very mild down day following its high. The 'something' coupled by the weak day in gold was enough to break gold's rally and gold fell -8.3% in less than two weeks from its high on 11/08/2007. In the Fall and Winter of 2007 the Fed was lowering rates at every meeting so there is no need to raise rates in order to produce a dollar rally. It can be achieved by other means.

I believe this may have been that 'something' (although I have not finished researching)...

http://www.bloomberg...id=a0Droxt1g__E

Nov. 12, 2007 (Bloomberg) -- Central banks from Bogota to Mumbai are imposing foreign-exchange curbs to take control of their soaring currencies from traders dumping the dollar.

In Colombia, international investors buying stocks and bonds must leave a 40 percent deposit at Banco de la Republica for six months. The Reserve Bank of India created a bureaucratic thicket to curb speculation by foreign money managers. The Bank of Korea is investigating trading of currency forward contracts to limit gains in the won, now at a 10-year high.

Instead of using currency reserves or interest rates to influence foreign exchange markets, central banks and finance ministries are setting up obstacles to keep the falling dollar from threatening company profits and economic growth. The U.S. currency slumped 10 percent this year against its biggest trading partners, the steepest decline since 2003, while Treasury Secretary Henry Paulson has reiterated that the U.S. supports a ``strong'' dollar.

Brazil has already taken steps in this direction , other countries are on the verge of it as it is killing their foreign trade.

GS.

[bearish04]

upside to 132? any downside targets?

[goldswinger]

upside to 132? any downside targets?

You misread it, it is 10+ upside and 132 potential downside......(incremental points)

[jjc]

60% short avg. 1175 just now I think 10+- upside to 132 downside for odds here.

I know you are an incredibly good trader z.... but I think you are insane shorting gold.

http://www.mydigital...re-gold-imf-410

[Squiggy]

I know you are an incredibly good trader z.... but I think you are insane shorting gold.

http://www.mydigital...re-gold-imf-410

With respect, I agree with zoropb. The India gold purchases are not as big of news as some people are making them out to be. In fact, after the previous India purchase announcement gold did not even budge for most of the day. And this time India said they would only buy the gold if their bid was accepted. Obviously that bid is for less than the current price of gold. Based on past gold rallies and my charts I estimate gold might pop to $1,200 here and then suffer a STIFF round of profit taking as word seems to be that $1,200 is the 2009 price target for a lot of big traders. I estimate the profit taking will be on the order of -8% to -10% and happen within days after gold hits $1,200. After that, however, I see gold at $1,300 to $1,400 by April.

[Squiggy]

upside to 132? any downside targets?

If I may... I think he meant gold has a +$10 upside from here and a -$132 downside. Correct me if I am wrong.

[bearish04]

got it- keeping an eye for the reversal

[goldswinger]

60% short avg. 1175 just now I think 10+- upside to 132 downside for odds here.

Zoopb, based on what happened to the dollar overnight , it changes things quite a bit.

First, it looks like either we are extending a 5th wave, which means , we need at least one bounce and that would imply GOLD willl go to at least $1200.

Second ,if we are still working on a major third wave, then we need one major multimonth wave 4 to 78 -81 that will likely see GOLD correct to 1050 and the SPX to 900+, and then when the buck plunges to 71-72, GOLD will move to $1300+ and the SPX to $1200.

What happened last night was major in my opinion. It changes things significantly.

GS.