Gold got slapped around pretty good today — down $19.
As I mentioned last week, I am short Gold for a trade. This was strictly a technical
trading call; I still believe a 10% correction is possible — Gold looked
toppy, and gave several other technical and cyclical sell signals before the crackage.
While I think Gold eventually goes much higher, that is strictly a
product of my macro-economic outlook. This technical break looks significant,
and could see Gold pullback towards support, somewhere between $500-520 (See a
weekly chart for the best view).
A few of you have asked my opinion on how gold stocks might behave relative
to or during a market correction. The short answer is "I don’t know."
The longer answer is that I’ve never analyzed companies relative to the
overall market moves; trying to game the execution of company managements ON TOP
OF tracking the precious metal is too difficult. Its an area where I have no
edge or special feel — and no expertise whatsoever.
DISCLOSURE: Short GLD
I do Larry Kudlow’s show whenever he asks, and while I am certainly not the
political wonk he is, I do keep track of the budget process. I want to see how the deficit is shrinking or growing, what changes to the tax code might be coming, and which sectors of the economy are getting a spending boost from Uncle Sam.
That’s a lot of stuff to watch — Fortunately, there’s a terrific set of charts today via the online WSJ: Crunching the Numbers (click each for larger graphics).
Gainers and Losers:
A broader view of what’s growing and shrinking in Bush’s 2007 proposal, in budgetary authority
Sources: Office of Management and Budget, AP
*Includes miscellaneous, undistributed offsetting receipts
Receipts and Outlays
A look at how the federal government is counting on bringing in revenue, and how it plans to spend it in fiscal 2007. All figures in billions unless noted.
Did you know that thee Estat Tax weas such a modest slice?