GLD (Gold Proxy)
(Click Chart to Enlarge)
Notes:
- The "Gold Peak" and "$ Low" are "all-time."
- Both the $ and Euro are deflating/strengthening together.
- Nothing prevents gold from rising a bit, or the dollar from falling a bit, before hopping on the future trend arrows.
FDR,
ReplyDeleteSo I can understand this analysis better.....Is the gold / GLD show in this chart the price of gold or the price of GLD (the ETF)? The reason I ask is that the ETF doesn't always track real gold exactly, does it?
Yes, I clarified the labels. Nothing tracks gold exactly because it is a thin and widely distributed market, not even the spot price.
ReplyDeleteFDR, thanks for the post. I share your view of Gold in the near, medium, and long term.
ReplyDeleteEquities, however, seem to have given way to free-for-all manipulation. Perhaps it is possible that the government, with the help of GS's program trading desk, can simply re-write the rules and violate all possible EW models and scenarios.
I mean, if the banks can't make money on loans, then it it is logical to assume they will drive up equity prices to insane heights before dumping for a profit.
I think stocks are in a pretty well defined pattern with a near term target of Dow 7500.
ReplyDeleteI'll try to add a snapshot to this post later today or over the weekend. Suffice to say, today is another nice short entry point.
This rally is ridiculous, although the charts look similar to early Feb double top.
ReplyDeleteMaybe the Fed is buying equities? It's not like our government would do anything about it.
The fed has given the money to their friends to buy the stocks. I think they and others are little scared of tea parties and other anger that is building.
ReplyDeleteWhy else would a current pres take the chance to encourage people to buy stocks? Its crazy, but he did it and the market is up a lot since his comment. A lot people are feeling better.
FDR,
ReplyDeleteThis might be a dumb question, but can you clarify the USDEUR number in the graph? It doesn't seem to be EUR/USD conversion; is it some other kind of currency cross?
scratch the comment at 4:26, I figured it out. Still puzzling, however, is how the USD/EUR conversion is more important to the price of gold then say, other conversions, like USD/JPY or the USD versus the Yuan.
ReplyDelete"scratch the comment at 4:26, I figured it out. Still puzzling, however, is how the USD/EUR conversion is more important to the price of gold then say, other conversions, like USD/JPY or the USD versus the Yuan."
ReplyDeleteNo, I don't think so. All the curves you mention have their own personalities making them slightly differently shaped puzzle pieces. The puzzle pieces should fit together.
And, as I tried to reiterate in "Note 2," exchange rates are unrelated to a currency's strength (value, or buying power), since both paper supplies being compared can dwindle or rise in unison.
Please see:
http://fdralloveragain.blogspot.com/2009/02/usd-behavior-during-deflation.html
So any exchange rate phenomenon... USDEUR, EURUSD, USDJPY, JPYUSD, etc... very much understates our overall deflation.