Posted by: jhamon | March 9, 2010

MysteryHedgie: The Cream Rises

The Cream Rises… stocks and selected commodities continue to squeeze higher, led by financials, AIG (where borrow is quite difficult to obtain) and C; where the break above $3.76, the 200 Day Moving Average, has opened the door for $4 and higher as the 3/16 date for the contemplated stock sale by the US looms.

We see the 3/16 date as a potential win-win for C as no planned sales are a clear positive, whereas a sale is met by a list of “strong handed” longs willing to add to positions at “still depressed” prices.  It calls to mind the “unintended consequences” of the British Government’s gold sales in 1999, where supply counterintuitively unlocked a huge rally (below).

Now, as then, government involvement in markets can surprise (climactically?) as the Ides of March approach.

1999 Gold Spike


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