Thursday March 29, 2012
This article suggests natural gas will fall to 1.98, one comment points out that spot is barely above $2 now.
Here is a more positive analysis of natural gas. This analyst suggests waning momentum and lower volume but notes NG needs a sustained closed over $2.40.
Our take was to buy SJT and HGT. SJT has rallied and HGT has run sideways. Both fell on the new lows in natural gas prices yesterday. So far we were right about the Master Limited Partnerships making a low and the bears on nat gas were right about price falling further.
Our first succession of lower orders for Central Fund were hit yesterday and we began scaling in positions as the market pulls back.
Readers wil recall our early February exit from long positions. We note that with the pink arrow. That was the INTERNAL high in the market. It was not however the index high. But since then the internals are weakening with less participation to the upside. A test of the uptrend line from the October low clearly lies ahead in the next few days.
If this were the Perils of Pauline, her raft would be nearin the edge of a waterfall, will the Summation Index survive a test of 600 at its uptrend line or dive, like Pauline, we won't probably know until the next weekly installment of this serial after March 30.
I have an academic conference here in San Antonio Friday and Saturday. So I will be away from the computer screens. Our orders for CEF at lower prices are in.
Here is a good example of why blogs like this can gain a following. UBS has lowered its call on gold fro 2012 from $2,000 to $1,680, which is what it was two days ago. Be sure to read the op ed piece in yesterday's WSJ pointing out that demand for US Treasuries is not elastic, there is a limit. Once the FED stops being the buyer of the day, real interest rates may return.
Several analysts have cherry picked history about interest rates and gold. Some have noted that higher rates in the 1950s depressed gold prices. True but at the time the highest interest rates ever in 1980 moved gold to its highest price ever. So take your pick.
Survivalist Idea of the week - Mongolia!