GSR close 69.67 today 2-4-10

gsa1fan

Why so high? Best ratio buying point?

roadrunner

There is no best ratio buying point until it finally turns around for good. GSR has been in a general uptrend since mid-September and the half dozen or so minor turnarounds have lasted for only days at a time. It's possible GSR could be correcting the 18 month down leg that began in March 2008. If that's the case it has to correct some % of the 90 to 58 drop. A good time to buy might be a long ways off. So far it's pulled back about 34%. It's possible it could pull back 50% (74), 62% (78), or even something larger. It might take a min. of 6-9 months to correct an 18 month decline. So far we're in the 5th month of the pullback. The dollar's key point of 80 seems to be matching the GSR's round number of 70.

The only positive indication I can see is that GSR is currently in a 3 week up move that is in it's 5th and probably final short term leg. It should be time for at least a short breather. Worst case is that the GSR pattern of the past 5 months has a striking similarity to the pattern from March-July 2008. And then in August 2008 GSR went balistic with the markets tanking. It briefly topped out just above 90. It has reached highs of around 100+ in past decades.

A rising GSR indicates money flowing out of the marketplace. That trend has accelerated over the past couple of weeks which means everyone is starting to hunker down by dumping anything not considered "safe." That's not good for stocks and commodities. For now it's good for dollars, yen, and treasuries.

roadrunner