CanOz
Home runs feel good, but base hits pay bills!
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- 11 July 2006
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Am I the only one surprised by the size of US gold reserves?
CFE White Paper Available by Russell Rhoads, CFA
by Administrator mkearney on 08-27-2012 05:45 PM - last edited on 08-27-2012 08:06 PM by rrhoads
The CBOE Futures Exchange recently published a white paper introducing trading the volatility of gold through futures on the CBOE Gold ETF Volatility Index (GVZ). GVZ determines 30 day implied volatility of the price of gold through pricing of options on the SPDR Gold Shares Exchange Traded Fund (GLD). GLD is an excellent proxy for the price of gold and implied volatility of GLD options is a great indication of expected gold pricing volatility.
The paper describes the GVZ index, the relationship between GVZ and GLD, and methods for trading GVZ futures contracts. The paper may be downloaded for free at the following link –
http://cfe.cboe.com/products/GVZWhitePaper.pdf
Russell Rhoads
The Options Institute
“The euro zone has been quiet of late, but that doesn't mean the problems have disappeared,” said Jeffrey Rhodes, global head of precious metals at INTL FCStone Inc. (INTL), who expects gold to rally to $1,975 by year-end.
http://www.marketwatch.com/story/bullishness-rising-faster-than-gold-2012-08-28?mod=wsj_share_tweet...there’s some bad news to accompany the good: Gold timers have reacted to bullion’s recent strength by eagerly and enthusiastically jumping on the bullish bandwagon.
And, according to contrarian analysis, that suggests that the rally has gotten ahead of itself.
Consider the average recommended gold market exposure among a subset of short-term gold timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Gold Newsletter Sentiment Index, or HGNSI). It currently stands at 47.8%.
Gold and silver have been on a good run in spite of other risk assets going in the other direction. I wonder if it will be a false move brought on by a squeeze starting with the run up of platinum. Some of the softs & grains look to be in a bull market but this worthless stuff??
Finally, Bernanke speaks at the start of the Jackson Hole holiday camp for economists. Paul Donovan, managing director of global economics at UBS, says:
Paul Donovan said:Those hoping for hints as to September policy action are likely to be disappointed. Hoping for a hint of the September FOMC outcome is probably wishing for the wrong thing anyway.
The value of the Fed Chairman's speech will be if he elaborates on the philosophy of monetary policy today. Economists want to understand how policy makers perceive policy is interacting with the economy (as so much has changed), to get a better understanding of longer term policy trends.
Silver and the HUI are showing relative strength to gold, we are close but I still want to see if Ben disappointing will lead to the final lows. QE is close but it may not be as close as the market wants.... then there is all this fiscal cliff tax stuff in the US that prolly will not be addressed until post election, it should weigh on the general market until and if they kick it down the road. Kinda surprised that it has not hit the DJI harder already.
IMO things are being held in reserve until the Euronuts sort things a little better and it becomes clear what is happening with Morgan Stanley... the chatter about them has not subsided and a couple of Euro Banks are rumored to be in the same sort of trouble. Another Lehman event coming right up? I think they will be prepared if so and I think it may be the reason the QE tool is being kept in reserve.
Pure speculation OFF COURSE! but I am still thinking we are in the rough for a month or two.
Z do you think that another event of similar magnitutude to that of Lehmans could be contained given the current state of the global economy? Seems to only be hanging by a thread as it is. I guess being prepared and being able to contain are two different things.
Im surprised no one has mentioned the one thing that the market is waiting on to decide whether to head further north or take profits.
All I say is Jackson Hole & Bernanke!
Yes, with enough fresh money.... but then you create a bunch of other issues... but then they will have little choice. IMO in the end we will all pay for this through inflation, the silent taxation mechanism. Otherwise they allow failure, as capitalism demands, but I can't see that occurring on the scale needed to flush this system properly. Ironically the politics wouldn't support it, but IMO it is the fastest way back ---> see Iceland. Again JMO.
Also consider Japan's banks, many have been technically insolvent for years but due to political support they have not really had to confront the issue head on... nobody wanted to recognize the failure... but I think many of the issues are still there all these years later, 30 years later!
Still...still, but looking like pretty soon a real move will be required. At this point lower highs and lower lows, so the preference would be a support break. But that is some serious support there, as long as the current low holds it'll need 1556 for a higher high.
View attachment 48513
We might be at some kind of a sweet spot here if all goes as some suggest - The AU/USD is giving some good currency leverage at 105. I view the exchange rate as a harbinger of recession here in Oz as our manufacturing struggles to remain competitive and our government keeps adhering to the failed 'level playing field' in global trade - we play the game while everyone else still slaps duties and excise etc on their imports.....
Anyway, could be a good time for a pairs trade - short AUD/USD @1.05 & long gold @$1550.....
Time for an update, if only to keep some people amused
short AUD/USD @ minimum of 1.05 up to 1.06, current = 1.025, gain = minimum 2.5c & max 3.5c (leveraged)
long gold @$1550, current = $1650, gain = $100 per oz (physical)
See you on the other side comrades................:fan
Get physical gold......
[video=youtube_share;vWz9VN40nCA]http://youtu.be/vWz9VN40nCA[/video]
Man up and show a statement...otherwise it's just another baseless claim.
CanOz
Whatever. I posted last month what the trade was. I posted today where the positions are at.
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