To Be or Not to Be?
Gary Tanashian
April 28, 2005
A critical juncture is upon us. The USD has firmed relative to
its sad performance closing out 2004, many large American firms
(AIG, FNM, F, GM and IBM to name but a few) are showing
stress fractures, with potentially devastating consequences as
noted in Amron. The markets
are doing their best to convince everyone who is paying attention
to stand aside or in the case of our fine furry friends, the
perma-bears, short 'til Dow 6000.
So it comes down to this: "To be or not to be, that
is the question" for 'Sir' Alan. Lately the paper
gold (miners) market has been saying it is not to be. That we
are heading into an extended period of "disinflation"
(what a nice sanitized word that is). I'll de-sanitize it; the
markets for gold stocks, energy stocks, financial stocks and
most other non-dollar forms of paper are hinting at DEFLATION,
whereby the masses scramble to pull in their horns, take liquidity
out of the system and try to do sensible things like repair bottom
lines grossly overextended by a historic credit orgy that, as
long as the illusion holds up, has made many feel rich beyond
their dreams (and means).
While miner-centric goldbugs feel the heat and top gurus begin
to give in to the deflation scenario, the physical metal is trying
to flash some bullish signs. Whether or not it makes good on
these signs will go a long way toward identifying the Fed's next
moves, along with those of central banks around the world. The
global financial system is an interconnected daisy chain of paper
IOUs. A real deflation can not be allowed to take root
because when it would finish its job of unwinding the speculative
bubbles in stocks, bonds, real estate, commodities (I realize
this one is debatable) and heck, even that old favorite, derivative
gambling, there would be nothing left.
So we are left with the question to inflate or not to inflate?
Below are two of the many gold charts to ponder when looking
for clues. Both have bullish possibilities in the face of all
the bearishness currently pervading most non-dollar markets.
Gold sports what may be a bullish inverted head & shoulders
pattern vs. the all important S&P500 broad market index.
It broke above the neck line, only to be instantly repelled:
Gold has been inching up vs.
the Euro for all of 2005. A sustained break out from this symmetrical
triangle would bode well for the idea that a global reflation
was underway:
Contrary
indications abound.
Broad indexes are bearish and gold stock indexes are über bearish. Gold would try to lead
to the upside, but it certainly has not led to the downside to
this point. It is simply a critical juncture for the markets.
April 28, 2005
Gary Tanashian
email: info@biiwii.com
website: www.biiwii.com
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Copyright ©2004-2006 Gary
Tanashian
Disclaimer: Gary Tanashian does
not recommend that any trading or investment positions be taken
based on views expressed here. If you speculate or invest it is
suggested that you consult a financial advisor qualified in your
area of interest.
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Apr 26 L@@K Amazon Kindle and Paperback Books by... Bob Moriarty 321gold
Apr 26 Gold Miners' Q1'24 Preview Adam Hamilton 321gold
Apr 23 Gold Price Reaction: Key Zones To Buy Stewart Thomson 321gold
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