Thread: The Dow

Originally Posted by Boon Mee

The Dow

And what do the Bush tax cuts have to do with it?

I'll read the link in a moment, but I think the tax cuts Bush implemented were reducing the top tax rate from 39% to 34 or 35%.

Capital gains still at 15%?

I'll check it out.

But my complaint is not about the tax cuts but the overspending.

He's blown the budget to pieces.

For what it's worth, Goldman Sachs just very recently covered their short postitions in gold. The puts tanked just before they covered. [lower right below the red #3] Goldman Sachs lost big shorting gold. The relationship between gold rising and the dollar falling is telltale.



Looks like the dollar is about to drop like an anvil over the cliff. Will it bring Wile E. Coyote - the DOW - w/it?

Methinks so. Methinks I would buy silver. Much silver.

The plundering of the US is about to come to a close. The long planned for collapse is about on us. The faith in the US around the world is plummeting. What little 'faith' is left is what is propping up the dollar. It's not really faith though, it's more like, "What the hell do we do? We've been dependent on the dollar for so long, where do we go and what do we do with the trillions of dollars we are holding w/o creating a panic before we get out w/o losing our shorts?" Any day now, everyone who is anyone willl be running for the exists. When they do, bye bye US economy - for a long long time.

David Bloom, currency strategist at the world's second largest bank HSBC, says Kuwait's 1% revaluation against the US dollar is a 'regime change' and forecasts $1.40 to the euro over the next 12 months. His warning is that phase two of a US dollar decline will result is an equity sell-off and 'an increase in volatility and uncertainty across the board.'

Historical precedent

Many past periods of crisis on Wall Street have been precipitated by major shifts in the value of the US currency, a fact not ignored by the International Monetary Fund whose officials are concerned to ensure that US dollar weakness does not cause a full blown financial crisis. IMF officials are currently in emergency talks with governments and a US dollar support package could emerge.

US dollar weakness likely to crash global stocks | Financial Planning



This is a classic picture of a head and shoulders bottom, one of the most reliable of all techincal analysts indicators. Note the two red lines about the dashed blue line. This is the resistance level of the eurov dollar. It's been tested twice in the last several years, once in 1995 and again in 2005. Should the Euro against the dollar break through this resistance, there's a strong probablity that the dollar will drop like a rock against the Euro. All that is needed is for further dollar weakness and perhaps higher European interest rates.

Isn't refusing to believe something that is right before your eyes a sure way to lose money? In fact, isn't - observe and understand what you observe - one of the first principles of investing?

Add the above chart to this one:



Look at the momentum of the POG, forming higher resistance and higher supports.

Originally Posted by sabang

I'm a retired Stockbroker Kerux. I'm not saying there's only one way to make money, but only price/volume/ momentum ever interested me in technical analysis.

Okay, fine, but being a stockbroker really means nothing to me, when the two charts I showed involved gold/shorts in gold and the Euro/Dollar relationship, which has very little to do with stocks. Being a successful commodities trader/investor would. Anyone who is interested ONLY in price/volume momentum in tech analysis would be someone I would suggest is not being cognizant of all available indicators. Why would anyone ignore a classic head and shoulders when attempting to read the market?

And I don't mean to be argumentative. But there may be others, although it's doubtful, that may actually be looking at this thread for info. I've given my two cents, as you have.

And btw: I'm degreed in economics with an emphasis/interest in statistical analysis and traded commodity futures for several years.

Why do you put more emphasis on price/volume momentum?

Because you weren't married and didn't go through an American 'his-fault' divorce?


Maybe had you paid more attention to those head and shoulders signals, you'd have retired at 37?

Not a lot frankly . I'm thinking about doing something later this year, but I don't really want to get back into investment banking.
I'll probably end up doing something like teaching English, and moaning about my salary because it hardly matches the monthly entertainment bill.

Anyway, the USD will go lower because it needs to for the trade balance and government deficit. I believe that interst rates will rise, but I'm amazed at how adeptly the Fed has been able to delay and lessen this. It leads me to suspect the Chinese inc. Taiwan and the Japs are somewhat complicit in this, as after all the incremental difference in trade is funded by US debt. I do not predict a collapse in the USD, but the real estate market remains a worry.
You will find the price of gold has done nowhere near as well if you chart it in a TWI, Euro or GBP basis as opposed to USD. Base metals have been better earners. Gold is interesting though, because an uncanny amount of smart money goes there before a major crisis.

Originally Posted by kerux

Looks like the dollar is about to drop like an anvil over the cliff. Will it bring Wile E. Coyote - the DOW - w/it? Methinks so. Methinks I would buy silver. Much silver.

Gotta agree with you. Silver is an almost perfect investment for these times. It's used in industry and also bought up in panic during crises. It's at a 50-1 ratio to gold, historically high. Nearly a 1000-1 ratio to the Dow (this ratio hit 20-1 during the silver price manipulations of the early 1980's). The more respectable silver equities in the past 5 years have far outperformed the Dow. During that time, the price of silver has also appreciated against more solid currencies like the Euro, Pound, Aussie dollar. I can sleep at night holding silver and silver equities. I can't say the same about the Dow stocks, which are overvalued even in a stable world. In some ways, the world is even more unstable than the early 1980's, when the precious metals really took off.