Thursday, September 2, 2010

Don't short bonds or gold - understand first why they're heading up

There are a number of good analyses about bonds and gold, talking about whether and when they top out. At ChartLines we're sympathetic to those looking for a top to short in these asset classes but open to some very good fundamental, technical, and cyclic reasons that both bonds and gold are poised to continue surprising to the upside. For a great technical understanding of big-picture reasons, check out Terry Laundry's Wednesday, Sept. 1 edition of his audio comments at his T Theory™ Foundation: T Theory™ Daily Updates, Forecasts, Charts and Data webpage at It's worth clicking and listening! Make some time even if it's over the long Labor Day weekend.

As for Elliott Wave - hey, look at my monthly chart of gold below ... What if it's actually about to go in a huge third wave up?! Well I'll leave wave counting to Tony Caldaro with his Objective Elliott Wave. But I'll remind you that he's bullish gold! Gold did bobble nicely at my Fibonacci level around $1220 area. But now it looks like it wants higher, so that Fib level isn't resistance anymore.

There are fundamental reasons too. Here's one new interesting article about this: Prelude To Meltdown: An Interview With Bert Dohmen | Clif Droke | (9/2/2010) at
Here's just a quote on one topic - the market in China - but you'll want to read the whole article.
Dohmen: I think there's a good chance the next crisis will start in China. Everyone right now is saying, "Look at the gains made by China's housing and financial markets over the last few years. You have to look at what is happening in the last 2-3 months, though, not just the year-to-year trend. An incredible $1 trillion in loans were issued to Chinese borrowers last year. Also earlier last year, China's regulatory officials tightened lending standards in an attempt at curbing speculation but it's just another case of governments believing they can solve problems in the financial markets when it has never been proven that they can. They've seen a tremendous decline in home sales. Home sales are up 8% for the year so far but what the media isn't telling you is that home sales were up an 60% percent or so before the real estate crisis hit. The Chinese economy is coming to a screeching halt.

Okay, read that interview fully because they talk about bonds and gold too. Including reasons why both should continue up. And here are a few of my charts:

No comments:

Post a Comment