Gold downtrend has begun?

[timLou]

Just read this on my market club blog section, I figured its a good read and I would share it with the rest of you.





"March 19, 2008
It's Over… and the hedge funds will devour their young
As we used to say in the pits of Chicago "This is going to get ugly."

Today, we confirmed that "Ugly" has arrived.

Trade update: We exited long gold positions on the 18th at 981.34 basis spot.

Today (the 19th) we also had a major sell signal in spot gold. Very unusual that this happend so quickly after our exit signal. Like I said "Ugly" has arrived.

Downside targets for gold are:

1. $855
2. $800
3. $750

Stand aside and give these guy a lot of room as every hedge fund and commodity fund is bolting for the exit doors in all the commodity markets, including gold.

You have read on this blog before that the markets slide faster than they glide. Just look at Googles slide and several other recent meltdowns.

WIth the end of the month and the quarter fast approaching these hedge funds have got to have something to show for the month and the quarter. This slide may wipe out all their profits.

It all reminds me of what Bette Davis said in her 1950 movie "All About Eve"

"Fasten your seatbelts, it's going to be a bumpy night"

Look for more bumpy markets, more volatility as the hedgies continue to bolt for the exit door that just got a whole lot smaller today.


"

[rodney]

Thanks for sharing that article.

We'll wait and see how good the prediction is.

I don't think the commodity rise is finished though, probably just a correction!

[robsrdd]

James West, publisher of the Midas Letter—click here—has a warning for gold bugs. Writing on SeekingAlpha—click here—he predicts that the continuing collapse of the American economy will result in the failure of a U.S. Treasury auction, followed by a debt default and massive dollar devaluation, as much as 10:1. This would seem to be good news for gold holders, but he points to 1933, when the U.S. government seized gold holdings and says it could happen again. Gold has been performing very well recently but this is some very interesting information.
Via stockresearchportal.com