Market Observation
Posted by Frugal on May 19th, 2006
- The general market is exceedingly weak. Everyday is a distribution day. Big guys are getting out. I believe that there is something out in the horizon that they know, but the general public doesn’t know. My guess is Fannie Mae related.
- Precious metal market is going through a big correction. I am guessing that it needs to find the bottom possibly around HUI=280 to 300 level, spot gold around $570 to $625, and consolidate for two to four months.
- $US fall looks like it’s contained for now. EURUSD fell from 1.29 level, and USDJPY bounced above 110. The biggest money moves will happen in the FOREX and bond market. This market should give us early clues on how the market will unfold going forward.
I’m going into a holding mode. Counting from 5/9/06, my portfolio is down almost 12%. My company holding value is down almost 20% (probably 30% from the peak). My total networth is down by 9%. If I count my cash, my cash+portfolio is down by 8%. I’m saved partially by investments in dividend and energy stocks. Energy stocks are down a lot by not as much as PM which are down more than 30% mostly. I hope the general market can turn up to give me some chance to sell my company shares for more cash. I need to think seriously about what if I’m wrong for the various parts of my portfolio. See you until next post.
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May 19th, 2006 at 10:50 am
Bob Hoye see’s gold consolidating till early June.
http://www.321gold.com/editorials/hoye/hoye051906.html
He estimates “good targeted support for gold over the next month of consolidation to be present between $633 and $662.”
His TA analysis have been highly accurate.
May 19th, 2006 at 10:51 am
Bob Hoye see’s gold consolidating till early June.
http://www.321gold.com/editorials/hoye/hoye051906.html
He estimates “good targeted support for gold over the next month of consolidation to be present between $633 and $662.”
His TA analysis have been highly accurate.
May 20th, 2006 at 9:02 pm
I agree with your targets. I’ll probably start buying around HUI=280 which is 50% retracement. I think gold will see low 600’s and even 575. If we get a triangular ABC correction again the best value will be found at the bottom of the A leg, although the PMs won’t be ready to take off months later.
May 20th, 2006 at 10:42 pm
Thanks BlueDaze & ML for your inputs.
By the way, I just want to clarify that this big correction is still NOT the BIG correction that I expect. I think the BIG correction comes is when China economy slows down either due to US housing market induced slowdown or self-imposed or imploded slowdown due to excessive growth. That BIG correction will probably last at least 1 year, or more probable closer to 2 years.
May 22nd, 2006 at 7:45 am
I didn’t think gold was likely to correct to the price-vicinity of its 200DMA.
But this latest article by Adam Hamilton shows that, in every Stage 2 gold rally, the price corrected back to the 200DMA.
http://www.safehaven.com/article-5200.htm
The Elliot Wave charts (must sign in as forum member to view) posted by 2 members in this Aussie commodities forum also opine gold is going down for quite a while…
http://www.aussiestockforums.com/forums/showthread.php?t=2366&page=24&pp=20
May 22nd, 2006 at 8:26 am
Thanks for all the links. I was not sure that gold is in stage two. Now it looks like it is not. Stage 2 should involve the gradual participation from the masses. So far, gold has only attracted speculators.