Hugging My GLD Like a Teddy Bear

While everything else continues to chop around, fail breakouts and mean revert, my gold position in $GLD continues to work.  Is it making me mucho deniro, not really, i was unfortunately loaded with equities at the time I took the $GLD position and didn’t add more than one lot on the breakout.  Since that breakout in early September I’ve been saying that gold is headed to 1300, the measured move off the inverse head and shoulder pattern on the weekly chart.  That being said, price targets are for sell side schmucks who don’t have money on the line, I will collect my profits on a break of the lower 20 day donchian channel (a new 20 day low).  For now, that looks like a long way off, the momentum in gold is strong and isn’t giving any signs of letting up.  Try and say that gold is correlated to this or that asset which is due for a turn all you want, I don’t care, gold is going to go the way it wants to go regardless, this is a pure momentum trade now and you better be treating it as such.

On the equity front, I still don’t like the action in this choppy market and have been sitting out for a while now.  Here are a couple of things that make me suspect that we are running out of steam in the broader indices.

This weekly chart of the USDX shows that the MACD is very close to turning upwards with a very oversold stochastic reading. Still, until the dollar can break the upper line of the downtrend channel and the 50 day moving average, it's a sell and the equity markets hang on. We have also now hit my first target support at 74.31. If we fail here look for 71.31 which is the low from 08' and would likely send the SPX to 1220-1260.

We are seeing the inverse on the SPY of the MACD reading in the USDX, about to give a sell signal. The stochastics are also overbought.

If we break through the yearly highs I will get long stock as we've been chopping around for a while and there will be fuel to push to 1200 quickly. That said, I don't like the choppy action up here with a lot of gaps and dojis.

If AAPL loses its footing here the market is done, you can't have a rally without the leaders. We are getting a sell signal now on the weekly MACD and stochastics. I would not be long this stock now and you should have it at the top of your watch list for clues as to where the broader market is headed. Today's action into the close was not a confidence builder.

Crude is trading back in its down trending range once again after a nasty shakeout last week.  If it breaks through the upper channel I have do doubt it will rip and we could see 90 very quickly.  I will be looking to get long on that breakout.

I was stoned cold on a breakaway last night and pulled a Wade Redden allowing someone to walk right around me at the blue line.  We won the game (now 10-1) but it wasn’t a pretty performance by yours truly.

On one last note, Obama makes his speech tonight regarding sending 40,000 more troops to Afghanistan from the West Point Military Academy.  First off, it is asinine to be making any war speech from one of our military academies.  In my mind this speech will rank up there with W’s from the aircraft carrier.  Mr. President, sit at your fucking desk and face the nation like the educated thinker / politician you are.  This nation does not need to be wooed into sending more troops, they need to be lead with sound strategy and reason.  Talk to the American people like you would your generals, not like the dumb as a rock populace we were treated like under Bush.  If you can look me straight in the face and tell me you have a grand strategy for how you are going to transform that region of the world from a mostly lawless migrant culture to one with strong rules and central governments which have control over their sovereign territories, I’ll go with it knowing that you have a real plan.  But if you are sending those troops over there, wasting more blood and money so that you aren’t the one who “lost the war”, then shame on you.  I believe in the end the book has already been written on this war, it will bring about the downfall of this nation by bleeding us of money and morale.  No nation has ever made it out of Afghanistan with its empire intact (although we are not an empire as the others were) and neither will we.  I hope I’m wrong, I hope Obama has more balls than I, I hope he’s smarter, I hope he’s the luckiest fuck on earth.

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