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After selling my gold position two days ago, I have re-established my position.  I may be doing this totally wrong, but following Friday's sell-off, it appears gold wants to go higher.

We are in a melt-up in gold, and I believe one must be quick on the trigger if you want to play it here, because when it does sell off, you are not going to want to hang around.  It will be ugly.

I have not re-established my long position in stocks, though I may do so if we break to the upside.

Of course, I could change my mind tomorrow and sell gold again, making my broker happy.

Comments

[psychodave]

per Rosenberg:
"If China were to lift their gold reserves to 5,000 tonnes, which is equivalent to about two years of global production, that shift in demand would boost the gold price by $800/oz to around $2,000 ($1,978) based on our models. If China moves towards 10,000 tonnes, well, that would end up taking the gold price to $2,623/ounce if our calculations are in the ball-park."

the link:
http://finance.yahoo.com/tech-ticker/article/382000/Rosenberg%3A-Gold-Going-to-%242600-Thanks-to-China

and, as always, the full text available at gluskinsheff.com (login required, registration easy-peasy)

[RunningAmokInFantasyland]

Specially designed for gold speculators:

http://www.4mdmedical.com/p-7443-grafco-8601-s-small-deluxe-foam-cervical-collar.aspx

Didn't get out in time? Might as well drop what's left on a nice dinner out:

http://comics.com/herman/2009-10-03/

[Toro]

lol

[dacian]

T., on stocks I thought you were planning to go even more short in the coming days.

As a more general view, do you see more upside potential for stocks? What do you think about 2010.

I read a lot of confusing papers out there (is not that it's easy):

- Birinyi was calling 1700 on S&P 500 (I don't know this guy, but don't really trust him)

- Mish (a fundamental guy on the economy) says a multi-year top might be very close (he favors a Japan like stock market for another decade - downward biais) (I like his analysis very much)

- Jeremy Grantham calls for 1100-1200 a multi-year top as well, he says not trusting "new bull market" camp and stocks will dissapoint for the next 5-7 years (mainly do nothing). I appreciate this guy very much (he looks very honest and reasonable, value investor)

What do you think? Can we have a post on what's your view on market direction?

thanks

[psychodave]

@dacian
While we wait for Toro to provide insight and shed light, my two cents are that Birinyi can be a brilliant genius and is generally quite solid.

Overall I'd read him regularly, so please provide a link.

@r.amok thx, enjoyed both links.

[dacian]

Dave

Here is birinyi's call on S&P 1700

http://www.dailyfinance.com/2009/08/24/birinyi-is-a-bull-sees-sandp-500-soaring-to-1-700-by-2012/

Look as well what Birinyi SAYS he's buying; when I compare the weekly volumes for Google today vs. what they were prior to 2007 bear, it's obvious we have a different animal here: the bull is not there is in gold (look at volumes in gold stocks). Yes, gold will go parabolic (many say much higher from here) and implode; it won't be pretty being long, like T says, but probably we're not there yet (although the long positions by speculators at their highest since 95 as per COT)

Very difficult to make an opinion, they call it "wall of worry" :). I know the stocks market is not the economy, but what valuations will be at 1700??? I also learned that the stock market doesn't really know pricing anything correctly.

We saw the ISM back in recession territory yesterday...

[psychodave]

@dacian
Thanks for the birinyi link.

"I know the stocks market is not the economy"
Roger that. However, Earnings do tend to influence prices and, since labor costs do not look like rising for a long time, earnings look attractive.
Disclaimer: I'm still net short).