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Happy New Year.........
A happy New Year to one and all.
So let's review. Gold was testing resistance at $847, when it came into Europe and got beaten down like a rented mule. When the Crimex (New York) opened it looked like gold was going to take a stand and actually go higher. In the early going the dollar was lower and crude was higher. When the stock market opened, the gold stocks actually rallied nicely which led me to believe that gold was going to be higher on the day. Silly me.
Soon, out of nowhere, the dollar had a MONSTER rally against the Euro, crude reversed, and before you could say "manipulation" gold was off almost $10 and the gold stocks were getting crushed. Was this a case of the dollar bounce resuming and yet another correction in gold off of resistance?
Alas, gold found some sack and closed down a little more than $4 and the gold stocks put in a really nice show given the overall dismal performance of the market.
So, what to make of today. I think I am going to take the sunny side and chalk up the day to extremely light market conditions. The markets were easily swayed into the direction any gentle breeze was blowing. I saw some stocks swinging .20 at a clip. Gold at times was trading $1 at a time. All indications of a very thin market. However, once, just once, it would be nice to see more days like the day after Thanksgiving, where both the metal and the stocks skyrocketed. That was a nice day.
Regardless of what they are saying on CNBC, there is no way in hell the dollar can have a sustained rally; the fundamentals simply do not support it. A simple, small tick up in existing housing sales is not the makings of a sustained rally. I love the guy on CNBC's Fast Money who is predicting $700 gold simply because of a rallying dollar. He fails to tell us why the dollar will rally in the first place. In fact, everyone who is predicting a major dollar rally next year fails to say why the dollar might take off. I can give you hundreds of reasons why the dollar will fail but maybe two or three far fetched reasons why it could rally.
So here we are, it's 2008, where do the markets go from here? Over the course of the year, I think we go down hard, however, the first week of the year is almost always a wild card. I ended the day very light in my trading account, so maybe that gives you a feel for my apprehension for the start of the year for both gold and the markets. But in the long run you know my feelings on gold.
Silver was a non-event today.
Hope your New Years day is going well and remember, hair of the dog.
We'll try and get them on Wednesday.
So let's review. Gold was testing resistance at $847, when it came into Europe and got beaten down like a rented mule. When the Crimex (New York) opened it looked like gold was going to take a stand and actually go higher. In the early going the dollar was lower and crude was higher. When the stock market opened, the gold stocks actually rallied nicely which led me to believe that gold was going to be higher on the day. Silly me.
Soon, out of nowhere, the dollar had a MONSTER rally against the Euro, crude reversed, and before you could say "manipulation" gold was off almost $10 and the gold stocks were getting crushed. Was this a case of the dollar bounce resuming and yet another correction in gold off of resistance?
Alas, gold found some sack and closed down a little more than $4 and the gold stocks put in a really nice show given the overall dismal performance of the market.
So, what to make of today. I think I am going to take the sunny side and chalk up the day to extremely light market conditions. The markets were easily swayed into the direction any gentle breeze was blowing. I saw some stocks swinging .20 at a clip. Gold at times was trading $1 at a time. All indications of a very thin market. However, once, just once, it would be nice to see more days like the day after Thanksgiving, where both the metal and the stocks skyrocketed. That was a nice day.
Regardless of what they are saying on CNBC, there is no way in hell the dollar can have a sustained rally; the fundamentals simply do not support it. A simple, small tick up in existing housing sales is not the makings of a sustained rally. I love the guy on CNBC's Fast Money who is predicting $700 gold simply because of a rallying dollar. He fails to tell us why the dollar will rally in the first place. In fact, everyone who is predicting a major dollar rally next year fails to say why the dollar might take off. I can give you hundreds of reasons why the dollar will fail but maybe two or three far fetched reasons why it could rally.
So here we are, it's 2008, where do the markets go from here? Over the course of the year, I think we go down hard, however, the first week of the year is almost always a wild card. I ended the day very light in my trading account, so maybe that gives you a feel for my apprehension for the start of the year for both gold and the markets. But in the long run you know my feelings on gold.
Silver was a non-event today.
Hope your New Years day is going well and remember, hair of the dog.
We'll try and get them on Wednesday.
posted by Neal | 12:33 AM
3 Comments:
Hey Neal!
First of all, Happy New Year.
I've linked from the Kitco site where i've been lurking for months but have yet to post, since I'm a newbie in the extreme. I've added your site to my favs and will check in pretty much daily, in an attempt to glean some knowledge, hopefully aiding my attempts at trading. I read constantly and try to find relevant info on the equities that I'm considering but knowing my limits, a site like yours, will surely give me some fresh info that I hadn't considered. I feel like Cyclist on Kitco is a solid source of useful info and as you may have figured out by now, I'm thinking you may be as well. I will still do as much due dilligence as possible but having a useful direction will save me a lot of time....hopefully. That being said, I've recently taken positions in ANO and KRY and wonder what you think about them and am considering some energy plays esp. UGTH... I'm a small homebuilder and have had to take a full disbursement of my sepp to continue paying interest on properties that I can't move and am using a portion to try and offset some of the penalties I will incur. Best of luck on your blog and thanks.
As the NY market has been flat lined during the holidays, I have been watching my gold exchange against the Swedish Crown ( based on the dollar) gain slowly the last several days.
Granted its been small, but a steady climb of the dollar none the less. I have to wonder what they are doing to prop up the U.S fiat against other currencies.
"In fact, everyone who is predicting a major dollar rally next year fails to say why the dollar might take off."
Yah, I get a giggle everytime I hear some "pundit" retard waxing poetic about the coming dollar rally crushing gold.
Once in a while, I hear some reality on the subject, tho.
Last night I caught Bloomberg's UK markets discussion, and they had a guy from Deutschebank and a guy from Merrill laughing about how the only way gold wasn't going to go through the roof in 2008 is if "by some miracle" the dollar goes up instead of continuing its inexhorable slide down.
"Some miracle" seems to be the only plausible scenario for a serious dollar rally being offered anywhere.
Now, if by "some miracle" we mean the PTB (powers that be) artificially propping up the market and the dollar and selling gold like there's no tomorrow, well, sure, we could see a few minor miracles between now and the election in November.
But I'd hardly call them rallies, and I'm betting all they do is make gold stumble for a tick or two.
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