Thursday May 28, 2009 Pre Market Openning
WE have been cool on CEF since it spiked in January. It seemed to us that the money was made between the low in Oct Nov and the sharp rally into the new year. We think our opinion is being vindicated now. While gold bug blogs and websites are chock a blog with speculation that the Dollar is about worthless and therefore gold is about to explode in price, money seems to be exiting Central Fund CEF.
- ON balance volume OBV peaked back in February, it has declined quite a bit since.
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MACD confirms that decline
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Most ominous, Chakin Money Flow CMF shows a lack of commitment to more purchase of CEF, just as OBV does.
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Not shown, gold and silver meanwhile have been moving up nicely. but we do not have new highs in CEF. CEF is trading at a 10% premium to Net Asset Value NAV. Perhaps holders are not willing to pay any more above market for gold and silver.
The money flow moving for the exits should be a cautionary note. The Dollar appears to be bottoming. We wonder if the lack of commitment to CEF here is a forward look to Dollar Strength.
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