2 min zu spät 
doppelt hält besser Eldo (so langs kein OS im Depot war den ich jetzt gern ausübern würde (in Papierscheinfunktion)
der hat mich dazu verleitet nicht dem Depot zu trotzen..Greg Silberman
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Current Gold Prices And Hedge Fund Stock Investing Games
Wednesday, August 15th, 2007
Central Bankers poured $500 Billion Dollars (that’s Billion!) into the monetary system last week. The sheer quantity of intervention indicates an enormous monetary dislocation is taking place — current gold prices remain firmly bid.
Wow!
Last weeks action left us breathless simply due to the sheer magnitude of money being forced down the markets throat.
What we have here is a situation where risky fixed income investments ala CDO’s and sub prime mortgages have been written down to Zip Nudda!
Now obviously holders of these securities are not exactly writing them off their books, but what is happening is in an effort to fund redemptions the banks / hedge funds / pension funds or whoever holds these securities are finding they are UNMARKETABLE at exactly the time it really counts!
That left Central Bankers holding the liquidity bag to help finance fund redemptions. This was necessary to prevent funds from selling other assets and causing a severe market rout.
An argument against gold stock investing is that it is just another asset class for hedge funds to dump when they require funds for redemptions. So why buy Gold or Gold Stocks when they seemingly offer no protection against a market meltdown?
Ofcourse it is a valid argument in the short-term but it fails to acknowledge that market participants understand the money supply is about to rapidly increase as the present central bank bailout unfolds. And Gold has done a great job against an increasing money supply over the last 6 years.
In fact it is this tussle which has caused the AMEX Gold Bugs index to hold above its 50 week moving average over the last year.
HUI looking for support from its lower trend line (green dotted line) and its 50-week Moving average
Chart 1- HUI looking for support from its lower trend line (green dotted line) and its 50-week Moving average
Now the game gets interesting!
• Gold stocks are looking desperately for support at their 50-week moving average (main chart - blue line) and the lower trend line (green dotted line).
• Gold stocks have also rebounded against an under pressure Dow (middle chart – red line) and made a double bottom in the process.
• And finally Gold Stocks versus Gold Bullion have bounced off support yet again (bottom of chart – blue line). This is important because Gold stocks lead Gold bullion at important turning points.
The fact that Gold Stocks have bounced off of strong support portends to them moving higher in a flight to safety. And as we mention below, the safe haven status of Bonds is about to encounter substantial headwinds. All of which further emphasises Gold as the asset of last resort.
Stock Market Outlook:
Asset Allocation Equities (ex-resources):
9% (4% stocks; 5% Put Options) : 91% cash *
(08/05/2007) 7% (4% stocks; 3% Put Options) : 93% cash
The raison d’être for derivative products is their ability to shift risk. If a lender fears for the creditworthiness of his borrower – no problem - he enters into a credit default swap with a 3rd party.
Unfortunately, investment bankers have become victims of their own success. They have been so successful at spreading risk around that nobody knows who holds what anymore (and what it’s valued at either). It’s this risk allocation success that the Fed praised and why the derivative market has been allowed to grow into a multi-Trillion Dollar business with relatively little legislative oversight.
Now we join the derivative circus on the dark side.
Credit spreads have been widening for most of 2007 which has put stress on all sectors of the credit market and sub prime in particular. But since nobody knows who owns what Banks are shying away from lending to each other for fear that the borrower holds a box of their own cracker jack fireworks which could go off at any second. Net result is a credit crunch the likes of which we have not seen in our lifetime. There is just not enough liquidity for normal commercial activities to continue so enter the Central Banks…
The Central Banks are now actively providing liquidity to the markets. I won’t go into the details of how they do it but suffice to say the end result will probably be an interest rate cut (in the US at least). In my opinion the Fed and the Central Banks have been doing a great job of preventing a panic SO FAR. Will they ultimately be successful? I don’t know. But I do know when rate reductions and increased money supply collides with rapidly growing global economies the outcome will be runaway inflation.
But let’s suppose for a second that confidence in the financial system is so eroded that Central Bank efforts become futile. What then? I shudder at the thought. Here we are talking about the Fed throwing boatloads of money in to the system but it does nothing to lift growth or restore confidence. I’m eerily reminded of an interview with deflationist Ian Gordon in 2002. In the interview Ian explained how Central Banks would not be able to inject enough money into the market to prevent a severe credit crunch. The period we are in now is called the Kondratieff Winter where all debt will be expunged from the system - read defaults or inflated away. Anyway, check out the interview transcript it’s chilling but in light of what is going on its almost plausible!
Right onto the markets:
Even though there is broad based fear and that fear looks to be spreading, there are still pockets of strength. We say that with the proviso that anything can and does change by the second.
For example, the NASDAQ has been surprisingly strong. Semiconductor stocks have all but yawned at the latest rout in financials.
Agriculture prices are also very strong and are readying to break out to new highs – possibly under inflationary fears. Over here I am talking about the commodity themselves and not agriculture companies.
Another pocket of strength is the US Dollar. The Dollar is now rallying and rallying hard, catching a lot of players on the wrong side. I’ll talk more about this short squeeze in the Gold section.
All of the above aside, take a look at this bow wow of a chart – the big daddy Dow Industrials:
Dow Industrials breaking below KEY support (blue line)
Chart 2 - Dow Industrials breaking below KEY support (blue line)
Yesterday’s action saw the Dow break below support at 13260. This is a significant technical deterioration as it effectively puts the Dow below its top formation that began in late May.
The next leg of the Bear market is upon us. Next stop 12,600.
We recognize that this entire Bear market (and yes it is a bear market) has been categorized by vicious rallies so it would not surprise us to see one materialize over the next few days. But regardless, the only thing for us to do now is to go short via more Put options:
Put Option Stock Profile: Ctrip.com International Ltd. (CTRP)
A quick peek at CBS Industry Watch over a 1-year period shows us that the Travel and Tourism sector has been amongst the top performers. In our opinion, this type of discretionary spending will be the first to be hit in the coming slowdown. As a result we will add Put options in Ctrip.com.
Ctrip.com International is a Chinese Internet based travel company. It sells air tickets for Chinese airlines, including Air China, China Eastern Airlines, China Southern Airlines, and Shanghai Airlines, as well as international airlines operating flights originating from cities in China, such as United Airlines, Northwest Airlines, Air Canada, DragonAir, and Lufthansa.
Ctrip has a $2.5Bn market cap; a high P/E of 68; Price/Sales of 20 and Price/Book of 15. Valuations are in the stratosphere on this one.
Whilst we still like the Chinese growth theme we think it will not be immune to the economic woes faced by the rest of the world.
CTRP making a top formation
Chart 3 - CTRP making a top formation
CTRP has been forming a topping pattern since early July. $38 looks like key support the failure of which should cause a break in the price. Overhead resistance is at the 50 day moving average at $39.80
We like the December $32.50 Puts (QCTXZ.X) at $2.15
Remember: Options are high Risk high Reward. One can lose 100% of the money invested in the Option Premiums so please, only spend what you are willing to lose!
Gold and Energy Market Outlook:
Asset Allocation 72% resource stocks / 28% cash *
Prior allocation (07/04/2007) 78% / 22%
Scotty we need a bounce!
A while ago we discussed how the financial world was being levitated by liquidity created through the Yen Carry Trade and Bond issuance in the US based on artificially low interest rates.
This money in turn was used to fund asset acquisitions in Australia, New Zealand, Euroland as well as in commodities including Gold.
We went on to comment how a reversal in the Yen would put pressure on the assets acquired through the Yen carry trade (which it is) and how higher US interest rates would do the same. A reversal in the Yen is now common knowledge. The initial slowdown in US corporate borrowing hit the private equity market first. Now were seeing it spread further. How do we know this?
First we are beginning to see a rush to Dollars as debt holders unwind their trades and pay back Dollar denominated debts:
USD rally underway. Likely target in green circle
Chart 4 - USD rally underway. Likely target in green circle
And secondly, US Bonds recently caught a bid in a flight to safety. In fact the recent strength in Bonds has caused everyone to forget that rates had been moving higher for much of 2007.
Now we find long yields challenging strong support in the form of a long-term rising trend line. In our opinion, probabilities now favour rates moving higher (bonds lower) from here. The point being that as a credit crunch deepens; borrowers will be forced to borrow at higher rates not lower thus exasperating the crunch.
Bond Yields are approaching Long-term support (lower blue line)
Chart 5 – Bond Yields are approaching Long-term support (lower blue line)
Therefore, Gold and Gold stocks are caught between 2 strong and opposing forces.
On the one hand we have the above sources of liquidity drying up and with it the liquidation of assets that were previously recipients of the liquidity.
On the other hand we have positive Gold fundamentals falling into place as discussed numerous times in the past i.e. credit spreads widening, yield curve steepening and Gold outperforming economically sensitive Oil and Industrial Metals.
This is all playing out in a fascinating tussle between Bulls and Bears:
Next support on the HUI at 330 then 320
Chart 6 - Next support on the HUI at 330 then 320
The pain continues as (in our opinion) the baby is being thrown out with the bath water. General stock market liquidation is sucking Gold Stocks lower. A buying opportunity? Maybe but based on our current exposure there is really no need to find out.
Next minor support comes in at 330 then 320.
350 remains short term resistance.
We have no opinion as to which way prices will move next but we should not be surprised if more downside lay in store.
LATE BREAKING NEWS: The HUI crumbled another 4% overnight before we could get this letter out. The HUI closed below support at 316! There is some support at current levels but it is now possible we will challenge the October lows at 280. Trying times indeed!
Strategy & Portfolio Update:
Out stop loss on Kimber Resources (KBX) and Australian Extract Resources (EXT.AX) was hit and we duly sold out. Some of our other stocks in play are precariously close to their stops and it wouldn’t surprise us if the get hit over the next few days.
Remember, we are playing in a market where there will be both ups and downs. We are now experiencing the downs but believe it or not we will experience the exhilarating ups once again. The short of it is if you are trading a system (and we are) then it is important to stick with it during the ups and downs.
We have a significant number of stocks in the treasury where we have 50% profits and carry them for the long haul. You should not feel the slightest bit of worry about these stocks as you are effectively playing with the markets money.
As for the stocks in play it is impossible to always get winners. We aim for a ratio of 6 or 7 out of 10 to be winners. But the timing usually means the winners happen all at once and the same with the losers.
What we are getting at (especially for newer subscribers) is don’t become despondent; all investing requires time and patience.
Get off margin and sell down to your comfort level. (gestern gewarnt-ich war outbreakgestimmt, wie schon so oft die letzen 3 Mal)
was mich beunruhigt ist der 1987 crash, damals ist der Hui im Einklang mitabgekracht wie ich vorher hier irgendwo las, v.a. schaut der chart von gutso fast 1:1 aus 
nachher wissens wir
![:]](https://goldseiten-forum.com/wcf/images/smilies/pleased.gif "Freude"){kind=small}
VERDAMMTE ÄHNLICHKEIT!
