Thoughts on Markets

Thursday, November 18, 2010

Dead Cat Bounce or New Trend? FVITF- SILA - OLVRF - BULM - Euro -Currencies

Great promises from our Covenantal God are found in the Bible, and His people can rely upon them with absolute confidence. Here is one that I find particularly important for all of life: Commit your way to the LORD, Trust also in Him, and He will do it.  (Psa. 37:5) Of course, we must understand that He will give us the result for our efforts that are best for us in the long run. If the result of our efforts are in tune with the word of God, we are likely, but not always to get what we see as success for our plans. He always knows what is best for us, and we rejoice in success or failure and learn from each.

Seth Lipsky: Ron Paul's golden opportunity
Who better to host the debate over sound money in Congress than the Fed's most persistent critic?
By Seth Lipsky
The Wall Street Journal
Wednesday, November 17, 2010

One of the most exciting features of the new Congress is the prospect that the chairmanship of a House subcommittee that oversees the Federal Reserve will go to Ron Paul. Final assignments are still being worked out, and the leadership may yet shy away from giving the position to a congressman who doesn't believe the Fed should exist. But Dr. Paul, an obstetrician, has been the ranking Republican of the Domestic Monetary Policy and Technology subcommittee, and tradition suggests he will be the next chairman. Read the entire article HERE.

From The Daily Pfennig ( "The EU members seem to have handled the run on Irish debt as deftly as they handled the Greek crisis. They have stuck to the same game plan which ended up working in Greece: 1. Voice support, trying to jawbone confidence back into the markets, 2. Announce the availability of much more credit than what they believe will be needed for support, and 3. Support the bond markets by making purchases in the open markets. We have moved past the first step and will probably get an announcement of a support package sometime later this week. The final step is still up in the air, as several members of the ECB are urging the European central bank to start pulling back the bond purchases it began nearly a year ago. But several members of the ECB, including Bundesbank President Axel Weber, oppose any additional bond buying." We should pray and hope that the same medicine works again, because this Irish crisis has been worrying the markets. For the time being, the EURO has rebounded against the dollar. However, we must remember that there is still trouble in Europe.

A New Podcast from
Q3 Gold Demand Trends - Marcus Grubb, WGC
"The fundamental strength of the gold market is unchanged despite the pullback in the price that you've seen in the last few days." Interesting hear it HERE.

Gold's slump a breather before new highs
According to Jeff Christian and Marcus Grubb, gold still has some way to go as the fundamental picture remains unchanged. HERE.

Fiscal tensions fuel high gold price expectations - WGC
Marcus Grubb, MD for Investments at the WGC says Gold has been rediscovered as "both a currency and a monetary asset and quantitative easing has forced the adjustment of global imbalances into currency markets. HERE.

Gold demand still being driven by India and China
As investors in traditional gold purchasing regions become more familiar with higher bullion prices they are coming back as key market drivers. HERE.

Gold rises 1% as dollar rally pauses
US core inflation touched a record low n Oct and new home building sagged, which lent support to the Fed's decision to embark on a further bout of QE, which helped push up the price of gold. HERE.

GFMS says silver is likely to trade above $30/oz in 2011
GFMS predicts total silver supply will end its three-year run of stability and rise by 5%, due to gains from mine production and scrap, plus a higher government silver sales. Read it HERE.

Silver is up 0.81 to 26.40 now. Here is the graph:

Looking at the DOW, we are receiving very mixed technical signals. As this is written the DOW is up 163+ to 11172.22. This to be expected after two of three 90% down days. Here is the graph from which I have annotated with technical signals. Richard Russell sees the formation of a top, but is yet to commit on the immediate direction. It seems to me that we will have to wait, at least until tomorrow or next week to define a definite trend. For the time being, I consider, as a guess, this as a dead cat bounce.

Miners from
Currencies from

Some Prices: FVITF 4.00 (Back up nicely); SILA 0.71 (Remains an OUCH); BULM 1.03 (Responding nicely); OLVRF 0.9675 (Holding on, but not jumping in the pool yet. I believe this is a longer term speculation); DOW up 183+ to 11191+ (Playing with us or for real???); SPX up 20.8 to 1199.42 (Joining the game.); Gold up 19 to 1353.70; Silver up 0.91 to 26.56.

Best to each, Doug


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