Sunday, April 5, 2009

Gold vrs Ags (2 week update)

March 20 (then)
DBA 25.01
GLD 94.35

April 3rd (now)
DBA 25.00
GLD 87.59

almost 8% in 2 weeks, not too shabby for a hedge trade of 2 inflation plays (which is why i picked them, b/c the risk is so low w/ these kinda hedges)

I think there alot more legs left to this, but it could very well take a few months. Not a super fast mover, and I am not "expecting" a 4% every week avg either, like it has given the past 2 weeks.

If it does, great, it not oh well....what i do expect is they will intersect/cross again, that might be in 2 weeks or it might be in 3 months. No time table set on hedge trades, the target is when they meet, per the charts. (that doesn't mean i wont take some profits if let's say gold tanks 8% in a week and dba goes up 12%, heck yea ill take profits).

But in terms of % till this trade is complete, to me its just warming up. (compare then vrs now charts)

Target: when the weekly charts intersect again. (see chart)


  1. Expect a period of consolidation as corn traders adjust to > $4/bushel.

  2. Got inflation?

    CBO 2x's TARP funding estimate:

  3. the dollar is tanking right now in futures, but GOLD is tanking harder X2....

    indexes and commodities obviously all up pretty high too

    its like a mad equity/commodity/something/anything rush, me want to "invest"....

    great again for this trade though

  4. That's a nice trade. What you thinking for gold intermedite term?

    The dollar chart looks kinda wobbly intermediate term, short term bullish. But to be honest, I am not saying that w much confidence.

  5. dollar went up today on a huge rally....what gives?

  6. that's a extremly Bullish day

  7. you think we see a reversal to dollar up/ market up conditions like several months ago?
    where's jpmoy when you need him?

  8. 90.02 is the line in the sand for $USD

    that's a lil ways up, but that the 38.2% retracement from its high, so if it can break that, it's suggestive that it's headed to 95.

    a rising dollar puts pressure on the market.

    Thurs was a very bullish day, but i dont think that the dollar AND the market both continue to rise together. no way, the last time that happened was the .com bubble, where the market was going .com bazerk AND we had a record low 2% unemployment at the same time, and had basically NO debt. (the economy was tremendous)

    pull up a 20 year chart of SPX, and put $USD behind it, and compare.

    the thing w/ the dollar vrs the spx weekly charts

    the dollar is in a long established up-run, with strong rsi support

    the spx JUST broke out here.

    one in an established consistant long trend

    the other is a brand new "breakout"

  9. Hey Erik, can I have an email for you? and pls update your blog... we need you.... hope you are ok.... luv Lara