2 replies to this topic

[redfoliage2]

I expected it, but not as that soon.......... Now I expect 1600 next week.

Edited by redfoliage2, 10 April 2013 - 08:36 AM.

[PrintFaster]

TLT and GLD getting sold hard as safe havens are no longer needed.

[salsabob]

TLT and GLD getting sold hard as safe havens are no longer needed.

I think you'll like this guy (particularly if you are him )

http://www.marctomar...anges.html#more

Three Interesting Correlation Changes

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3.Gold and the S&P 500: The unorthodox easing by the major central banks and the initial attempt to bail in insured depositors in Cyprus was widely thought to underpin gold prices. It has not. The price of gold is off about 9.5% this year in dollar terms. Indeed, it has been trending lower since early October's test on $1800 an ounce.


In contrast, the S&P 500 has been trending higher since the last correction ended in mid-November. It has moved within spitting distance of the October 07 record high of 1576. Hence, the correlation between the two has broken down. On a 60-day basis the correlation is slightly negative now, while the 90-day correlation is barely above zero.


When the correlation between gold and the S&P 500 is high, the more gold is trading like an asset. When the correlation is inverse, gold is arguably acting more like a safe haven. Since the financial crisis began the 60- and 90-day correlations have mostly been positive, but nearly ever year there is a period of inverse correlations. Last year was an exception for the 90-day correlation, which never became inverse.


The longest inversion since the crisis began was from April through November 2008 when the 90-day correlation reached just beyond -0.5. From late-1998 through 2003, the 90-day correlation was rarely positive.


The weak correlation between gold and the S&P 500 suggests that gold is acting more like safe haven now than at any time since last June. The problem for gold bulls seems to be that the liquidity being provided by the major central banks, real or anticipated, means that investors are being forced out of save havens.

Duh.