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Archive for February, 2009

Is that all there is?

February 25, 2009
Author: Dale Doelling

A lot of people have been asking me this question.  And, frankly, that may just be it for a while at least.  The April Gold contract traded on the NYMEX hit an intraday high of 1007.70 on Friday of last week and then closed at 1002.20.  I remember thinking of all of the things that have been happening in the markets and I asked myself the same question.  Could this be it for the Gold market?  I came to the conclusion that taking some money off the table was a wise move so I liquidated half my position at the market on the close Friday.  Gold has been rallying in spite of a strengthening Dollar and was in a fairly overbought condition.  Bonds have definitely been showing signs of capitulation.  Stocks have been acting miserably but they’re going nowhere until the Dollar gives way.  That has been holding true for quite some time.  So, when the stock markets began rallying sharply off the lows on Friday as the EURO rallied 300 points in 30 minutes I felt compelled to do something.  So, I sold half my Gold position.  I’ll sell the rest tomorrow if we get another close below 966.20. 

Another thing that I’ve noticed is that the volatility seems to be coming back to the markets.  If that’s so, will we see a reversal in the major trends that have been in place for what seems like forever?  I have to say that the jury is still out on this one but don’t be surprised if we don’t see Gold back above that $1,000 mark for a while.  If Gold has topped near-term, then stocks should provide us with a tradeable rally here with my target in the DOW at around the 9,000 level.  The caveat is that the Dollar will have to play give-back here pushing the EURO back to around 1.3850.  Consecutive closes above 1.3100 will confirm that the Dollar rally is done at least for now.  Gold is tired and needs to retrace some of it’s $300+ in gains that it has tacked on since mid-November.  Consecutive closes below 966.20 (today being the first) will probably lead to a move back to just above the $810 level.  No one needs to ride the market down so follow my advice and sell if we get another bad close tomorrow.  Let’s see what happens between now and Friday and I’ll update you with my position by the weekend.

Good trading,

Dale F. Doelling, Chief Market Analyst
info@Bullion.com
1.888.453.4614  Ext 2

The information and comments contained herein are provided by Secure Future Financial Corporation (”SFF-CORP”) and NOT Castello Cities Internet Network, Incorporated. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. This report includes information from sources believed to be reliable and accurate as of the date of this publication, but no independent verification has been made and we do not guarantee its accuracy or completeness. Any reproduction or retransmission of this report without the express written consent of Secure Future Financial Corporation is strictly prohibited. Again, the information and comments contained herein is provided by SFF-CORP and in no way should be construed to be information provided by Castello Cities Internet Network, Inc. Copyright © Secure Future Financial Corporation.

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Times are tough and they’re going to get tougher!

February 9, 2009
Author: Dale Doelling

Well, I’d be willing to bet that the vast majority of people, if they were totally honest, would admit that they never thought the economy would ever deteriorate to the point that we find it now.  Jobs being lost by the millions with nearly 600K in January alone, deficits going up by the trillions and people being displaced from their homes in record numbers.  I can tell you one thing for sure.  Unless we, the people, do a complete 180 degree turn and demand that our government cease and desist with the raping and pillaging of the the poor American taxpayer, then we could see this situation spiral out of control leaving devastation in its wake.  We can do and be so much better if only we would find the courage to converge on Washington and “take the bull by the horns.”  This insanity has got to stop!  We have to start asking for LESS from our government and MORE from ourselves.  If corporations, and their shareholders, have to go belly up because piss-poor management got the company into the financial quicksand, then so be it.  Why does Joe Taxpayer have to throw them a humongous “bailout” line?  If you can answer that question please email ASAP. 

In my little town two nights ago, I was confronted with an example of just how bad things really are in this country.  I’ll try not to sound too critical here but, the fact is, the average person on the street doesn’t have a clue when it comes to money management.  I was confronted with this fact two nights ago when I nice young lady approached me in the parking lot at the grocery store.  I could see it coming.  She and her husband live in Jacksonville and were in the area for a funeral.  She had just had her taxes done by a well-known national tax preparation firm that provides people with access to their refund at a ridiculously high price.  She even had her little debit card with the firm’s name on it.  Unfortunately, the money that was supposed to be available to them had not been credited to their account and they were stranded and had no way of getting back to Jacksonville.  You could see the embarassment on her face as she added that she needed to get back by morning because she sings in her church choir.  I have a dear friend that lives in Jacksonville and he also is very involved with his church and their choir and I know how much it means to him.  I could see her husband on the phone calling everyone he could think of for help but to no avail.  I pulled out my wallet, handed the young lady $20 and told her there was a gas station right up the street.  She didn’t really know how to respond when I handed her the cash.  I think she was shocked considering they had had no luck for the last two hours approaching strangers in a parking lot.  Later, I felt that I should have done more to help these two people.  Then I thought of George Bailey in It’s a Wonderful Life.  George may have been a bit naive but he had a good heart.  When the Depression hit, ol’ George showed tremendous courage under fire when the run on the banks was starting.  He told the shareholders at the Bailey Building & Loan, “We’ve got to stick together” in order to weather this financial storm.  We need more George Bailey’s in Washington!  My point in all of this is that, if we’re going to get through this quagmire that we find ourselves in, we’re going to have to help each other out because it’s going to get far worse before it gets better.  The apathy that we have exhibited during this financial meltdown is the main reason we’re in this mess.  I’d like to say that I’m optimistic but, until we show that we’re willing to take some risks of our own and hold Congress’s feet to the fire, we’re just going to get more of the same.  What happened to this idea of Change?  I think we got duped again.  Now to the markets.

The EURO is showing some serious signs of a bottom as the 100-day MA has now crossed the 200-day MA. This is extremely positive and could provide a huge lift to the equity markets over the near-term.  Equities are sure acting strangely in the face of all this bad economic news.  I would have thought that we would have seen a buyer’s boycott in stocks after the employment report on Friday but the markets seem to have discounted the worst possible scenario and people seem willing to take some risk and buy stocks.  I’ve been expecting some kind of bounce in this highly-oversold market and this may be the beginning of a tradeable rally.  But don’t go getting too excited. If the equity markets do rally it probably won’t last very long.  Too many people are holding stocks just looking for a little better price to unload them.  When the rally play itself out we’ll most likely see new lows as we head into spring.

Gold finds itself consolidating here but this should only be a brief rest as the market sets its eyes on the $1,000 mark.  Resistance is at the $938-940 area and support comes in at $892 and $884.  If you have some additional cash available I’d be buying Gold on a break to the $885-890 level.  This market is going to rally sharply if the EURO can finally gain some momentum to the upside.  The long-term view for now looks extremely attractive for Gold and Silver and I’d be looking to add to my holdings should the market move to the levels that I noted above.  I don’t like to make forecasts but my long-term expectation for Gold is still north of $1500 and ounce so there’s still plenty of money to be made in the Precious metals markets.

If you have any questions or comments, please send me an email to dale@daledoelling.com.  I look forward to hearing from you.

Good trading,

Dale F. Doelling, Chief Market Analyst

The information and comments contained herein are provided by Secure Future Financial Corporation
(”SFF-CORP”) and NOT Castello Cities Internet Network, Incorporated. Futures and
options trading involve significant risk of loss and may not be suitable for everyone.
Therefore, carefully consider whether such trading is suitable for you in light of your
financial condition. This report includes information from sources believed to be reliable
and accurate as of the date of this publication, but no independent verification has been
made and we do not guarantee its accuracy or completeness. Any reproduction or
retransmission of this report without the express written consent of Secure Future Financial Corporation
is strictly prohibited. Again, the information and comments contained
herein is provided by SFF-CORP and in no way should be construed to be information
provided by Castello Cities Internet Network, Inc. Copyright © Secure Future Financial Corporation.

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Gold leads the field.

February 3, 2009
Author: Dale Doelling

If you want to know which individual asset led the field in January then look no further than this post.  As the S&P was posting its worst January ever with an 8.8% decline, Gold, that precious yellow metal, was kicking some serious butt in January.  Certainly you must know by now that I’m a Gold Bull.  I don’t make that statement recklessly.  I analyze markets for hours on end looking for reasons to be LONG or SHORT.  I have only been SHORT Gold once in 4 years.  We’ve been through a series a “bubbles” beginning with the Dot.com bombs of the 90’s.  Then it was Real Estate.  The next is probably going to be the Treasury market but that’s only going to happen when the markets truly believe that the deflationary cycle that we find ourselves in has run its course.  The commodities markets are just getting started.  I’m talking about incredible gains in commodities that we will see over the next 5 years.  In November, I told Marketwatch.com’s Myra Saefong that Gold and Treasuries were the only safe place for people to put their money.  Gold was trading just below $700 and the 10-Year Notes were yielding just under 4%.  Today, Gold is trading above $925 and the 10-year yield has declined to 2.856%.  Do you know what a $25K investment split between Gold futures and Treasury futures on November 1st would be worth today if you had leveraged your account equity at 50%?  The answer is – over $100K or a 400% cash on cash return in 3 months.  Not too shabby!

So, there’s the key.  We all know that leverage is a double-edged sword.  Now, the futures markets are zero-sum game where for every buyer there’s a seller and for every winner there’s a loser.  Leverage, on the other hand, magnifies the movements of the markets.  If you are riding a winning trade pyramiding your  position can produce incredible returns.  And when markets are in firmly entrenched trends like Gold you have to force yourself to stay with the trend.  This kind of discipline is absolutely crucial in order to take full advantage of these large market moves.

Good trading,

Dale F. Doelling, Chief Market Analyst

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