Mahant!

Richard Russell of the Dow Theory Letters writes "From a Dow Theory standpoint, the markets continue to face a major non-confirmation in the Averages. The Transports have risen to new record highs while the Dow has failed month after month to confirm. Thus, from a Dow Theory standpoint, this is a dangerous market. It's particularly dangerous because of this truly spectacular divergence and non-confirmation in the Averages." The above paragraph was taken from an article citing a different crcumstance. But it is relevant to the point we cite below. The Comex Gold has been making higher tops with the frist top made at $541. But the MCX gold has rotundly failed to breach the top made at 8134. It managed to trade above these levels several times, but it has failed to sustain above these levels. So are we "Undecided market" [I wont use the word dangerous in this case]. Time will tell. :) Falkor

"The yield curve has actually inverted, as short-term interest rates are now higher than long-term interest rates. This is always a very bad sign for an economy, as bond players are betting that the economy will be so weak that the Federal Reserve will be forced to drastically lower interest rates, thus increasing the value of their long bonds. ........because an inverted yield curve means we are facing a recession" When the yeild curve inverts, ie. the price of the short tenure bond is lesser than the price of the longer tenure bonds [indicated through the interest rates charged], it means people are buying the longer tenure bonds thus implying the economy in the next few years would be weak and to compensate for any inflation fears. source: dude mogambo @ Kitco.com ;) :) Falkor

Bubbles are the ultimate case in point. Whenever too much paper money floods into a financial system, which is the inevitable result of artificially low interest rates, it floods into some class of goods or services or investments and inflates prices far beyond where they would be if interest rates were set by free markets. It is ironic as the destination of this excess capital determines whether it is good or bad in investors’ minds. http://www.kitco.com/ind/Hamilton/jan272006.html :) Falkor

Silver remains a better bet than Gold in the short term, though a dip to 9.25 levels is very much expected. The trend in silver, though ad hoc as yet, seems to offer better sense of direction than Gold at present. It would be good buy as long as it sustains above the levels of 8.90 levels. Happy Trading :) Falkor

Gold: A good big and trendy move in the offing A possible top in the making Long trade are suspect until the 8150 levels are conculusivly breached and sustained Short may enter in small quantity if there is a hard break below the levels of 8060 [short term] Agressive traders may enter shorts with the breach of 8075 sustainedly. :) Falkor

"Most people can stay excited for two or three months. A few people can stay excited for two or three years. But a winner will stay excited for 20 to 30 years - or as long as it takes to win." - A.L. Williams

"Most people can stay excited for two or three months. A few people can stay excited for two or three years. But a winner will stay excited for 20 to 30 years - or as long as it takes to win." - A.L. Williams

Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you. -CFTC

Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you. - CFTC

The NZD situation is heating up again. One of the drivers that makes the currency artificially strong are issuances of bonds called uridashi that are issued in NZD and sold to Japanese investors, who enjoy reaping the fat interest rate differential between New Zealand and Japan. The ironic thing about New Zealand's interest rate policy has been this: the RBNZ continues to hike rates (now at 7.25%!) in order to choke off excess in consumption and the housing market that threaten the country's current account deficit. At the same time, the higher rates make it more and more attractive for foreigners to hold paper from New Zealand - and the uridashi are one of the biggest instruments whereby foreigners can participate in the New Zealand market. This latter phenomenon hurts New Zealand's export markets by making the kiwi artificially strong. Apparently, overnight a rumour has developed that government officials from New Zealand have convinced a Japanese issuers of uridashi to s...

Discipline: If you are in a hurry you will never get there. With time and patience the mulberry leaf becomes a silk gown. Be not afraid of growing slowly, be afraid only of standing still. Risk Perceptions: The participant's perspectives are clouded while the bystander's views are clear. Better a diamond with a flaw than a pebble without one. How can you expect to find ivory in a dog's mouth? Think Big: Great souls have wills; feeble ones have only wishes. That man is richest whose pleasures are cheapest To attract good fortune, spend a new coin on an old friend, share an old pleasure with a new friend, and lift up the heart of a true friend by writing his name on the wings of a dragon Learn: Learning is a treasure that will follow its owner everywhere. Listen to all, plucking a feather from every passing goose, but, follow no one absolutely. Review the old and deducing the new makes a teacher. Limitations: Of all the strategems, to know when to quit is the best. If you mus...

Silver is making itself into a bearish formation. The shorting opportunity is available. Short with a stop above 13270. For a minimum target of 13150. Happy Trading

Following is an excerpt from the article titled "Real Estate Burst, Upcoming Recession, and Soaring Commodity Prices" by Emanuel Balarie: published at Kitco.com "I see the commodity markets as the premier place to invest during this upcoming recession. Like the recession of the 1970’s, I also expect to see rising inflation and soaring commodity prices. Whether you invest in the metals markets, agriculture, or basic raw materials, I believe that positioning your wealth towards commodities will best position you to ride out this housing burst and subsequent recession." :) Falkor

There are bunch of resistances for Mentha Oil near the levels of 825-835. The price generally seems to be headed down. One may take a short trade near the levels of 826, with the stop above the levels of 835-836. The major support on the immediate downside is at 800 regions. If Mentha Oil experiences much weakness then the it may even break down to the lower 700 regions. Happy Trading :) Falkor

The failures are a very important indicator for the health of the system. When a particular element is put to test and it does not perform its usual process as expected, something is wrong. Something is spooky! This is very true in the markets and technical analysis too. Whenever a particular chart formation occurs, and the pattern gives its thrust projection but prices fail to reach the projections, something is wrong. It is either the calculation gone awry or underlying current has changed. This is similar with the news. Whenever a news comes out which is expected to have a negative or positive impact but prices do not respond. Something is wrong. This goes too with the over-reaction to a particular news. For example, if a non-important news/event is branded as the main cause of movement in prices, you know something is wrong. We saw that happening in a good measure with the crude this week. Crude went up in the aftermath of Russia cutting its gas-supply to western states. The ...

It was quite week for the Crude. But our guess is the coming week will be the Week of big moves. [we quite like to put our head on the line :D] The probably best trades next week will be in the MCX Bullion and Crude. There are good reasons for the Gold to up, but the reasons for the Crude are much stronger [as in the next post] Watchout for Crude! :) Falkor

The Guar Seed on NDX is likely to move up to 1790 and 1810 ranges in few days. It has broken out of a bullish formation, but lots of sell pressure will come in near the 1790 regions before the new rally is to begin. It is not without a reason the formation can also turn into one of the dicey bull traps, where lots of wrecked ships are found enroute. Guar seeds seems headed up as are the gum, but the present moves are limited in reliabilty. Happy Weekend

Two new headlines in today's papers are as follows: 1> Bush: Permanent tax cuts will help economy 2> China again indicates it will diversify its reserves away from US Dollar and US govt. bonds. These two headlines indicate one thing. Gold is going up on Monday. The gold and silver have been in a range for the entire day [at the time of writing]. The Gold has been trading a range with very low volumes and looking for direction. Taking the cues from global market the likely move in gold is bullish. Conclusions: Gold remains bullish and is headed for higher levels. Happy Weekend :) Falkor

Once in a while you get an article which explains something in much more beautiful manner than thousand words may say. This follwoing para was found in David Vaughn's newsletter. It explains it self. “The World's Central Banks Must Keep Buying Gold.” “As central banks around the world consider bolstering their gold reserves, one analyst says their only choice is to buy more. And prices will continue setting records as a result.” "CENTRAL BANKS AROUND THE WORLD ARE SITTING ON MOUNTAINS OF U.S. DOLLARS," Litle explains (Justice Litle is a commodity market analyst & a frequent contributor to the Wall Street Journal & The Daily Reckoning), "While Americans might consider that a pile of assets, foreign leaders can only see it as a giant pile of liabilities." “As he points out, the U.S. government alone faces a $331 billion budget deficit while Americans are sitting on $2.1 trillion of debt.” “The deeper into debt America goes, the less valuable its curren...

Once in a while you get an article which explains something in much more beautiful manner than thousand words may say. This follwoing para was found in David Vaughn's newsletter. It explains it self. “The World's Central Banks Must Keep Buying Gold.” “As central banks around the world consider bolstering their gold reserves, one analyst says their only choice is to buy more. And prices will continue setting records as a result.” "CENTRAL BANKS AROUND THE WORLD ARE SITTING ON MOUNTAINS OF U.S. DOLLARS," Litle explains (Justice Litle is a commodity market analyst & a frequent contributor to the Wall Street Journal & The Daily Reckoning), "While Americans might consider that a pile of assets, foreign leaders can only see it as a giant pile of liabilities." “As he points out, the U.S. government alone faces a $331 billion budget deficit while Americans are sitting on $2.1 trillion of debt.” “The deeper into debt America goes, the less valuable its curren...

So far this year, gold has benefited as investors established new positions in commodities for 2006. Some specs have been riding this trend from a short-term perspective and can be expected to book profits on instances of dollar strength. But we suspects substantial investor interest is longer term, based on the track record of commodities over the last year and a more questionable dollar outlook as the Fed nears the end of its rate tightening cycle. - Refco Commodities

Nothing is impossible for those who perceive the nature and the means Of their task and proceed with determination. A verse from Thirukurral

It is folly not to fear what ought to be feared. Therefore, the wise dread what ought to be dreaded. - A verse from Thirukurral What is it that I ought to fear? The market ? The valuations? The Govt? The Companies? The result season? The Manipulators? The Operators? The Rivals? The unexpected news? The foreign investors?......................... All these are outside my control. There is not point looking and worrying about them. I cant make a single strand of difference in them. But I have something that is totally under MY control and none else in the world can make a single strand of difference to it. Its ME, my Discipline, my Reverence and my Devotion.

Wisdom is a weapon with which a man may ward off destruction; It is an inner fortress which no enemy can assail. A verse from Thirukurral

Give to the poor, and life will be richly graced. There is no greater profit for a man than this. A verse from Thirukurral

The crack in the bullion market was very good techinical call. Though intially by looking at the short term charts the magnitude of the fall was under estimated. But all the short term buy signals and the supports were gone for a toss and the silver cracked couple of percentage points. The Silver seems to be at a support at near term before the fresh Bull or Bear Pressure builds up. Will be an eager wait!

Following are the excerpts from Peter Grandich's Outlook for 2006 Gold • Physical and investment demand – According to the World Gold Council (WGC), demand for gold coins, bars and bullion-backed shares rose 56 percent in the third quarter of 2005. Investors and jewelers bought $12.5 billion worth in gold, or 838 metric tons in the third quarter, up 7.6 percent from a year earlier. (Jewelry demand accounts for 73 percent of gold consumption). The rapidly growing economies in China and India have been key and while soft patches are likely going forward, the enormous wealth creation on-going there appears to assure strong demand for gold for the foreseeable future. Debt, deficits and the #1 crisis in America I believe the debt and deficit crisis has been one of the least talked about, but one of the major reasons why gold has performed so well. I’ve spoken to many sophisticated foreign investors and one of their core concerns is the out-of-control fiscal house of our government a...

Gold is possibly headed to 7790-7795 and 7755. CMP 7811. Stop above 7821. Gold might see momentary weakness. The overall trend remains bullish and there is a good possibility of a bounce from current levels to 7850 levels too. Short term charts remain bearish as long as the 7860 region are not taken out or suffficient time is consumed. Falkor

Crude Oil [cmp=2810] possible trg 2790, some good buying can be expected at 2805 levels. If the bottom of this move holds out [at 2760] then the upside will be very good. Buy on dips, especailly near 2790, with a stop few ticks below 2760 Falkor

Soy Oil NDX [cmp= 1973] target is likely at 350.30 and the move above it can take it to 355-357. The prices remain bullish. SL sustained above 2002. Falkor

Chana has been consolidating in the range. The Comm has a downward trend and any break below 1960 and 1955 will create a move away from the Raff Regression channel. The possible move can take it down to 1938 and even possibly 1890. Happy Trading Falkor

Keep true to the dreams of thy youth. - Friedich Von schiller

The wisest men follow their own direction. Euripides (484 BC - 406 BC)