Bull

Submitted By Gary Tanashian

You know who they are - they are commodity complex and resource bulls and they are becoming alarmed about the possibility of the end of their bull market in the inflation-fueled 'resource trade'. Rightly so in my opinion as I have been bearish the complex for months now in anticipation of Deflation Scare '08.

So they are selling and selling and selling; anything that is not nailed down and the fact that gold and silver rise and fall with the complex is sending the PM's out to the wood shed. This situation, while anticipated, turns out to have been a bad miscalculation on my part because if I had known the depth of the collective precious metal-commodity tie-in I would certainly have been free of gold and silver mining stocks heading into last week. But the question I ask myself is 'how do you account for other people's mis-perceptions?' and if the fundamental view I go by is correct, that is certainly what this is, incorrect perception.

I am that most sad of things; a technical guy cursed by bias. That is because I was a macro-fundamental guy (due to my real world business experience) before I overlaid the technical on top of it. So while I can be cold hearted about the stock market, commodities and economy, I cannot be when it comes to currency and precious metals - the last store of sanity (in my opinion) and value in the monetary world. So be it. The hedge funds, newsletters and their flocks are now stampeding out the door. The casino has a feel to it that I have not sensed in years; it is starting to quiet down. The din silenced by collective self-reflection on the part of all participants.

I am not happy about recent events but there is nothing I can do about it but wait it out and take advantage (last wad of expendable cash awaiting HUI 265). I have always been something of a loner and while it may take quite a while for this to work itself out, I am getting more comfortable with the big picture now that Uncle Buck (weekly now over bought, joining daily and monthly is threating the down trend line - that ought to really freak out the USD bears/commodity bulls) has finally popped some steroids and slapped the world upside the head. This sets the stage for whatever is next.

Anyway, here are the most pertinent charts to my stance. I am not submitting this stuff to the din of the analysis websites. If you are here reading you have at least recognized value in the thoughts presented and this is a time to tune out the noise, know who YOU are (you are not me and I am not you) and make peace with yourself. 'Come to Jesus' as the saying goes. We soon find out who is right and who is wrong.

Good luck and good fortune to us.

Edit (9:32) Received this email from a reader this morning:

This A.M. from a blogger, Howard Blackstein, whom I follow on Stockcharts:

8/14-11P.M.- A BIG ,BIG THANK YOU TO LEEANN FOR EMAILING ME WITH THE
FACT THAT THE U.S. MINT HAS JUST DISCONTINUED THE SALE OF 1 OZ. GOLD
AMERICAN EAGLE BULLION COINS TO DEALERS.( I KNEW SOMETHING WAS ROTTEN IN DENMARK,WHEN A LARGE BULLION DEALER HAS NO KRUGERRANDS FOR
SALE)-INVESTORS ARE BEGINNING TO HOARD GOLD COINS.I DON'T OWN ANY GOLD
COINS,BUT I MIGHT START ACCUMULATING ,NOW-WHY THE [DISCREPANCY] BETWEEN GLD AND GOLD COINS? CASH STRAPPED SPECULATORS (HEDGE FUNDS,QUANT FUNDS,ETC,)ARE BEING FORCED TO UNWIND GLD TRADES AS MARGINS ARE CALLED ON THEIR LOSERS. WE NOW KNOW THAT PHYSICAL DEMAND FOR GOLD IS HIGH.