Sunday, December 05, 2010

Gold Market Volatility Makes Cycle Low

The use of volatility in trading systems is generally under appreciated yet we are in a cycle of volatility.  That means many people have been and are going to continue to be punished. 

The gold bulls have generally been increasing the level of commentary enthusiasm over the last few months as quantitative easing two has been announced.  Remarks of a dollar collapse, hyperinflation and parabolic financial markets has been on the lips of many.   Contrarily, unlike quantitative easing one, we wrote quantitative easing two changed the game.  

Most gold prognosticators, like equity market prognosticators, are imposters.  To believe that gold is going up because the U.S. is corrupt or the dollar is doomed is ridiculous.  Politicians have been corrupt since the beginning of time.  It’s just that now they have taken it to an art form.  And as we have incessantly ranted for years, the greatest risks in the world lie outside of the U.S.  This is something gold bulls clearly don’t understand.   If they did, it would be quite a dubious position to be gold bulls. 

Most prognosticators on any topic are along for the ride and simply regurgitate what they read some place else.  If you pull back the curtain, there are a handful of high priests pulling the levers of ideological rhetoric and the advent of blogs and instantaneous access to information gives all lemmings the ability to perpetuate an echo to every corner of the globe.  Most are simply part of the group grope rather than seekers of truth. 

Life is all about containing risk and understanding reward in that context.  Will gold go parabolic here?  We shall see.  But since most remarks regarding the gold market have absolutely no merit, I wouldn’t be banking on it.    


Click on the pix for a larger view.

posted by TimingLogic at 5:55 AM

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