Posted by: jhamon | February 3, 2010

MysteryHedgie: Awaiting Further Instructions

In a time where wisdom is demanded in short 140 character texts and tweets, it comes as little surprise that two short weeks of corrective price action has largely restored an uneasy equilibrium to markets. 

This equilibrium in most markets we see bounded by last Thursday/Friday’s lows and yesterday/today’s highs; Gold (see below) has in fact been rangebound for weeks, despite the sound and fury.  At issue here is both the fact that speculative positioning is as low as we can recall and the belief that global politicans’ influence on asset prices is greater than ever.  Not so strange, then, that markets have sold off on good economic news yet rally when Government rhetoric moderates. 

Add to your core convictions (themes that correlate with a strengthening US$) as headlines create opportunity but respect any break of the recent ranges as exploitable while we await further instructions from the EU (PIGS problems are an ongoing issue), Washington, and Beijing. 

Above all, stay patient.             

Awaiting Further Instructions: Gold's Big Triangle

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