Quote:
Originally Posted by xort
The comodity market has been a speculators pig trough for many years. That is one of the reasons oil is spiking along with the drop in the dollar. Notice today that when the dollar rose, oil dropped. Hopefully the speculators got burned.
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Most of the speculators really got in during the past year or two.
I remember, vividly, years ago, that nobody wanted to have anything to do with gold. Oil, gold, and other commodities were mentioned only briefly in conversations on channels like CNBC and other financial news networks, and then only to talk about how much lower it was going to go. Gold at 270$us/oz was a SCREAMING buy with an obvious bottoming pattern, but it had gone down for so long nobody would even talk about buying it on television save the very rare Monex commercial. That is all good bottoming behavior, when everyone is convinced something can never recover, that the only direction is down, nobody cares about it and everyone has forgotten it even exists as an investment opportunity, when all forces have conspired to destroy it as an investment. And that's what gold bugs used to think, that central banks were in a conspiracy to destroy gold, they talked about it in the same way that people talk about mortgage companies conspiring to rip people off today. But, nothing goes down forever ....
Even when gold started making big gains the folks on the financial channels completely ignored it. They were much more content to move their focus from the crashing Nasdaq over to the thinning NYSE. You still never heard about gold, oil, or anything else except the occasional "congratulations to anyone who owns gold", like that was always some mysteriously brilliant third-party, certainly not part of "us", who are fully invested in the stock market and housing. Besides, how are tv folks going to make a U-turn and start talking about an investment they both haven't owned and have been talking bad on for the past decade ? Admit they are wrong ? Folks just don't do that!
It's really only been in the past year or two that people have gotten on board with the whole idea that the dollar has been going down, and that only since they have been trying to find a goblin to blame for the current dip in the stock market, and loss of price in the housing markets. Now that people are finally talking about gold as an investment, talking about inflation, the dollar losing value, oil going up another 100$us/barrel, 5$us/gallon gas by july, and all of this other junk - now that everyone is convinced it'll only go to the stars and the market really is filled with people who have been buying commodities, yes, that is probably topping activity ... the end is near.
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As a former Wall Street broker . . .
