Value of Perfect Information

So what is the trade? Long.. short? from the looks of the price action on friday it looked like lower. BUT the action as bernake began to speak today is saying otherwise. I have noticed an interesting correlation between ABX and GLD. ABX appears to be the leading indicator of where GOLD spot is gonna go, GLD really lags far behind. As the beard started talking today gold caught a massive bid, this was foreshadowed by ABX not falling at all, staying bid. SO what happened? Well for one the dollar collapsed, the GOLD trade is now crowded… Who knows if they are squeezing the shorts for a quick trade or indeed the trend has changed. I honestly haven’t a clue, the markets are correlated one day the next they are not. The best way i believe to protect capital and keep risk under control is do not go home overly long or short any individual sector… IE do not go out short golds without some sort of longer term hedge on. The easy trading i think is slowly coming to an end, everyone who thinks they are a stock picking genius is going to be shown who indeed is boss. The market cannot keep giving away free money to anyone who shows up to play.

Tags: ABX, GLD

Categories: Charts ,Commentary ,Exclusive

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