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Old 06-09-2007, 08:57 AM
Mr. Now Mr. Now is offline
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Join Date: Jun 2004
Location: The Present
Posts: 1,953
Default Re: Trade ideas...lets see what we can come up with

DcifrThs,

You seem to be saying that gold and silver are going to break down significantly.

Both are sitting at 1-year trend lines after being much higher. This is normally where buying comes in and shorts cover.

The long bond is rolling over a 27-year trendline. Normally that means traders see real inflation (in excess of govt estimates) and demand more yield to hold those bonds.

Normally this kind of action in the bond market torpedoes stocks and bond pricing. if stocks and bonds are trending south, what's left in terms of asset classes to park inflation-aware money? Certainly not cash or real estate now.

The worldwide liquidity explosion caused by the Fed's expansion of money supply (and competitive moves by other central banks) must find a home eventually. Where is it going to go?

Right here, long metals at the 1-year trendline, with a 3% stop has very favorable Sharpe characteristics.

Charts:
Gold ETF
http://stockcharts.com/h-sc/ui?s=GLD...;dy=0&id=0

Silver ETF
http://stockcharts.com/h-sc/ui?s=SLV...;dy=0&id=0
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