Wednesday February 8, 2006 - 11:44:12 GMT
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Black Swan Capital - www.blackswantrading.com
"14 steps and a stumble..."
â€śIdentification with other members of the crowd and an acceptance of the crowdâ€™s belief system is stimulated by each memberâ€™s willingness to obey a crowd leaderâ€¦The crowd leader acts as the main interpreter of new information from the environment, determines the appropriate tactical response and directs strategy.â€ť
Gold seems to be the leader inspiring the speculative juices of the crowd. Yesterday, it decided to rest. The Nikkei also took a bit of respite today, sinking a cool 448. You know what they say, â€śFourteen steps and a stumble.â€ť
Though we continue to invest under the guise of abundant liquidity, and the belief our omnipotent central bankers will manage any crisis to perfection, one wonders when the Fed moves will finally bite. Where is the proverbial straw that breaks Goldilockâ€™s back? Will it be #15 or, what now is shaping up in the minds of men, hike #16?
We know one thing for sureâ€”there isnâ€™t much in the way of risk priced into a whole slew of markets and asset classes.
Philadelphia Housing Stock Index is high on the list. It hasnâ€™t even broken its weekly uptrend yet, despite all the concern about housing!
And of course, we have Mr. Parabolicâ€”Copper. My nose begins to bleed just looking at this chart:
And let us not leave out the currencies, given that this piece is supposed to be related to such creatures. A glance at the Canadian dollar chart (Canadian $ futures) and one thinks it should be moved to the metals sectorâ€”itâ€™s trading in some rarefied air in its own right.
And back to where we startedâ€”the breather in our leaderâ€”gold. The C$ and gold have been undulating rather consistently together of late, as you can see in the daily chart below. Both are oscillating well above their daily trendâ€¦opportunity?
Black Swan Capital
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