-- Posted Wednesday, 18 February 2009 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Wednesday, February 18, 2009
“Phenomenally accurate forecasts”
We were quite bullish on gold as a new trading week began yesterday, but is there perhaps more to it than merely bullish charts would have us infer? Here’s the message that went out the night before to Rick’s Picks subscribers who may have been disappointed by gold’s quiet finish last week: “Anyone who thinks gold is about to stall out without taking on $1000 should read today's tout for Comex April. Although the futures have hesitated within 1.70 of our longstanding target [a hula number!] at 952.30, the shallow pullback so far suggests the pivot will not prove to be a serious impediment.” When the dust had settled yesterday, 952.30 proved to have been no serious obstacle at all. In fact, April Gold shot up $28 to $971, and the futures were giving up almost none of the gain as the evening session got under way.
The charts now say that 995.00 should be easily achievable over the very near-term, but we wonder if we’re not being too conservative, considering how spooked the currency markets have been acting. No one who trades gold could have missed the fact that bullion’s sharp rise yesterday came with the Dollar Index also in a steep ascent. This should be disquieting to market observers, but also to gold bugs. While the latter may have reaped substantial trading gains on the move, it suggests that all is not right with the world, to put it mildly.
Someone Wants Dollars!
One observer at Market-Ticker.com noted that there was fierce selling of currencies Monday night originating in Asia. Here’s the post: “Someone, apparently someone in Asia, wants dollars. A LOT of dollars. There is a forced-liquidation event underway that is massive, it is against all asset classes and it is spreading. All of the primary currency crosses got hit at once - euro, pound, yen - all weakened dramatically against the dollar and it is still going on. The Asian stock markets got walloped at the same time in coordinated waves of forced selling. At the same time the US futures markets got nailed as well, down some six handles on the [E-Mini S&P futures] in a near-vertical drop. While this sounds ‘not that big,’ to move these markets in a coordinated fashion like this is a trillion-dollar enterprise. This is not some small company that went bankrupt, or even a large company.”
Although the selling failed to gain momentum as the writer had feared, we would be foolish to ignore the possibility that this flurry of activity is warning of a global run on currencies. The fact that Western Europe’s loans to developing countries, most particularly to Eastern Europe and Latin America, are on the brink of a massive default suggests that even minor disruptions in forex markets should be taken seriously. If, in the next week or so, gold pushes above $1000 with the dollar in a strong rally, we would infer not merely a warning, but the onset of a full-blown global financial crisis.
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Rick's Picks publishes a daily trading newsletter for gold, stock, commodity, and mini-index traders 240 times per year. Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers' initials will be used unless express written permission has been granted to the contrary. All Contents © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Wednesday, 18 February 2009 | Digg This Article | Source: GoldSeek.com
