Anybody find it funny that Goldcorp was nailed with a downgrade after the stock was threatening a blue sky breakout after these results and forecast? The major gold stock indices are sporting a bearish divergence to the already broken out (and heavily shorted by da 'commercials') metal and it would be inconvenient to have the richest gold stock on the planet breaking out, now wouldn't it? This paranoid moment brought to you by the good folks at Biiwii.com
Wednesday, January 9, 2008
GG
Anybody find it funny that Goldcorp was nailed with a downgrade after the stock was threatening a blue sky breakout after these results and forecast? The major gold stock indices are sporting a bearish divergence to the already broken out (and heavily shorted by da 'commercials') metal and it would be inconvenient to have the richest gold stock on the planet breaking out, now wouldn't it? This paranoid moment brought to you by the good folks at Biiwii.com
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Actually, they "downgraded" it to "sector perform". Maybe they are trying to tell us that anything gold is going through the roof...
ReplyDeleteMaybe they heard Dennis Gartmann just went bearish on gold and didn't want to be left holding the bag. Can you blame them wanting to get out while the getting was good? ....... Its a sucker's paradise out there .........
ReplyDeleteSee http://www.nytimes.com/2008/01/06/business/yourmoney/06fore.html.
ReplyDeleteExcerpt:
"“Those people who are waiting for the dollar to crash should wake up and smell the coffee, because it has already happened,” said Ed Yardeni, president of Yardeni Research in Great Neck, N.Y.
He predicted that the dollar would strengthen in 2008 — especially when compared with currencies against which it has lost the most ground. Those include the euro, the British pound and the Canadian dollar."
“Those three currencies have been painfully strong in recent months, to the point where central bankers are either thinking about or starting to lower interest rates,” Mr. Yardeni said."
No argument that the USD can (and probably will) rally against other debased and over-valued currencies. But you are drawing a linkage to gold , which is blowing away all currencies now. Target remains 920 and then evaluate. Of course a correction will come, but what is the sense of sitting around worrying about it if you've taken risk management steps? But for my purposes I'll add Gartman & Yardini to Goldman 600, Faber and HSBC was it? Bring on the highly visible bearish analysts.
ReplyDeleteThere is simply no other way to ride a major bull market - you must endure some tough times on the way to much higher prices. I have been aboard since POG 310 and HUI/XAU way lower. Only once did I trade all the way out and since mid summer have held the core+.
BTW, gold breaking that inverted H&S bottom vs. oil today. Important fundamental for the miners kicking in, right on schedule. Check out the gold-oil chart I superimposed against the USD. Gold/oil is moving in the same direction as USD which, if it holds true going forward will be helping gold miners' bottom lines even as the dollar rises. Gotta love the wall of worry here.
A little side note to the reputed "wall of worry" ...
ReplyDeleteTop "quality" gold stock DROOY is leading the hit parade this morning. No signs of speculation here, nope! .......
http://www.kitco.com/stocks/companyname_asc.html
So glad you got bullish on gold so early. I dumped in my savings, you know when? Oct 24, 2000 That was one day before the low in SCGDX and the same day the XAU bottomed. Before that I did not buy a gold fund since trading the 1993 lows. Before that shorting the dollar through long SF futures options in April 1985 and selling gold futures over $500 in Dec 1987. I think I have earned the right to speak about what is bullish and what is bearish sentiment. when it comes to gold.
Can I be wrong about all this? Sure, why not. But when Kitco is now pulling Howard Ruff commentary out of the mothballs and floating this "wrong-way Corrigan" as sound advice, I have to ask whether we are at risk with our money here. To fail in doing so would be purely negligent. Gains in gold are made by paying an emotional price. I don't feel any sense of worry from gold bulls. All I have observed is this easy street mentality recently. Blue skies and Red Ferraris ahead seems to be the sentiment, while flipping the bird at the warnings of noted analysts with good records seems to be the state of mind fancied by many retail investors with an axe to grind. Know anyone like that?
Alright, so if you want to say its worth throwing away a host of hard fought gains for a gamble on an extra $20 rise in bullion, I suppose you have that right. But I do know that this would not be considered wise among those who are thoughtful of risk. In a time when gold can move over $25 in one day, it might pay to count one's blessings and appreciate what one has. You are not wrong to entertain "paranoid" thoughts. Sometimes your first instincts are the ones to follow. With that final reflection, now I will shut up.
Luck to all.
You don't need to "shut up". I wouldn't let you comment if I thought you were just blowing smoke. I want all sides available for people to make up their own minds and I am not pushing an agenda here. It would suit me more than fine if currencies were actually worth something beyond confidence and if productivity were the main product of the USA.
ReplyDeleteBut listening toFaber, Gartman, HSBC and Goldman is not going to change my mind. 920 and then we'll see. You say that's only $20 from here but it was more like $80 when our thread started and it is about $220 from where I first started ID'ing the 'potential' target.
But this is a fundamental thing happening here. The dollar will rally against all kinds of garbage and gold will have its corrections. But the vehicle I highlight here, the miners are improving fundamentally - I was more bearish when they were rising (and underperforming) with the entire commodity complex and the likes of the euro. You appear to be simply saying it's time for a correction or worse but not backing it up with fundamentals. Until I hear a sound fundamental argument, long I stay. I have filled this blog with fundamental views of gold, oil, commodities as they apply to the miners specifically. Dredge it up and show how it is wrong and I will listen.