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August 26, 2008 - 8:39pm
#1
Harman Hammered
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Clifton, I don't watch gold, but I've been in and out of energy over the last couple of years. I sold out in early May of this year, after a nice 40% run. Like you, I never hit the top, but I like taking the elevator part way up, walking down and then catching it again.
I was predicting $80 oil a few weeks ago, but now I think that it may go lower. That'll happen IF (big if) the US gets a national energy policy. If we do that and begin to act on it, then oil will drop further and the dollar will surge upward. I just got back from Japan, where I noted that the Asian press is assuming that the US actually will adopt an energy policy and the dollar reacted immediately.
You being a gold bug, I'm guessing that you think about FX a lot. What do you think would happen with gold if the US adopted a meaning policy to achieve energy independence by, say, 2015-2017??? I'm thinking that helps the dollar and hurts gold. (Of course, the chances of "meaningful policy" are close to nil, so there's little risk).
Dave
Dcstep, I sold all of my energy stocks this morning, shortly after the opening, for tremendous short-term profits. APC at 62.97, CHK at 50.58, and UPL at 71.97. I sold because I was smack in the middle of a rally based on news that everybody knows about -- Gustav in the gulf (no, that would not be Mahler...).
I believe a sustained bull move in the $USD could affect the markets you mention in many ways. First, it would depend on whether the markets perceived such a move as on the dollar's own merits, or simply because the other G-7 currencies were becoming relatively weaker. Interest rate differentials could well narrow between, say, the US currency and the Euro. That is the buzz. But. Interest rate differentials comprise only one of the variables that affect currencies these days. Deficits and trade imbalances are far more important.
Technically, the current $USD move (as measured by dollar-index futures), could be running out of gas. The MACD, Stochastics, and RSI indicators are horribly overbought, and price has moved into a strong horizontal resistance band. Yesterday, there was a divergent high -- a new high in price for this move, accompanied by a lower RSI reading, and falls in both the MACD and the MACD Histogram. This is short-term bearish for the US dollar, but not necessarily the end of its current bull move.
I still do not think the dollar can make a sustained (6-months or longer) bull move against the other G-7 currencies with our deficits mounting, as they are. If Obama is elected, they will mount at an accelerating pace. If McCain wins, they will merely keep building more slowly. Big money does not trust debt unless it translates into growth. Our deficits are millstones, rather than productive investments.
Gold will continue to look at the obvious fact that there is $400 trillion in US paper that does not have a bid. It has a face value, but no bid -- nobody wants to buy it.
We live in interesting times, there is no doubt.
Good luck.
Clifton said:
"Technically, the current $USD move (as measured by dollar-index futures), could be running out of gas."
I totally agree, short term, BUT an actual energy policy would do tremendous things to improve the trade imbalance. Just the perception that that could happen rallied the dollar and if we actually did something fundementals would support a much stronger dollar long-term.
It'll be interesting to see what happens.
Dave
Dcstep, as a market veteran, I am sure you already know that the trick is to buy or sell what hasn't been already priced. Sometimes the markets are preternaturally intelligent and forward-prescient. Sometimes they are incredibly stupid and behind the curve. Basis today's closing price. Sometimes logic works, and sometimes it doesn't. That is why I rely on sentiment indicators and the momentum-percentage oscillators, at what appear to be inflection points.
My suspicion is that last week's low (778 intraday, and 792 on the close) priced in a $USD rally to 80 (the old break-point, and SERIOUS resistance). But, that is just a suspicion. As you well know, the narrative is ongoing, and the tension between the reality of traders and the narrative of the media can be very intense.
I am not trying to be a cowboy, here. I am basically long gold in my trading account, but I am in only 50%, with over $700,000 cash on the sidelines. I may never (to be honest) deploy ALL of that again. Times have changed, and the all-or-nothing scenarios are staggering. The stakes are high, and reason is on a holiday.
I wonder if anyone out there can comment on the business that drives our hobby/passion. I am concerned about the red flag Harman is waving. Debt has become an all-devouring monster. Who can survive, in this jungle?
Good luck.
Harman is more pro audio than high end toys. AKG, JBL, Lexicon, Crown, so many more..Levinson is a big zero, just a name, meaningless in teh pro business where Harman is big...there are more JBL sound systems out there in big venues, for megabucks. A car radio is irrelevant. Crown system linked to JBL speakers. Crown sells dozens and dozens of units to one venue, not one radio in a car 1 at a time.
Word is, that Putin is moving hard, fast and solid, as he knows he's got about 5 years left before all the new oil finds come on line. Then his energy rally which has put refrigerators and food in every Russian house..will either slow tremendously..or end.
Which is the why of the crunch now..you see. Fuck'em while you can.
And as for current issues, the evidence of the Gold market manipulation is now obvious for even the dimmest of the wits.
Me? I'm not in these markets. No cash for such endeavors. But I am paying attention to the sunspot situation as a long term indicator that bears watching. They suspect (some of the smarter folk) that this null..is merely the slowing before the peak..as in similar aspect to tuning in a station. As you get close to the main 'resonance'..and then the nulls and peaks are huge..just before the main frequency is hit. So sunspot activity is down....but the peak is likely to return, and in great force,as the solar system passes through the 'centerline' of the galaxy.
Think of a bagel but sliced. The solar system wanders through the galaxy on an 'up and down' cyclic, er, cycle..that repeats one every 26,500 years or so. The energy fields, electric, BTW...have an opposite polarity above and blow that 'line'. Thankfully the line is HUGE (As in many light years kind of huge, it's a damn big thing, the galaxy), and the transition is slow. Sort of. It is expected that the the transition range or area, is being entered, by us, now. The ramifications are unknown, as the last time this happened, was ~26,500 years ago.
Clifton
I work with Harmon reps and the whole group is generally hurting. The reps are told by Harmon that they have to maintain 15 % year on year growth or they are at risk. In todays economy its extremely difficuly to maintain 15 % growth in a mature market. The other problem is that a lot of their higher revenue lines like their IQ/Cobranet are being eaten away by competion as Harmon can not react quickly enough to the developing technologies.
Alan
Ladies and Gentlemen,
I believe we have a Martian in our midst.