Slope of Hope Blog Posts

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Getting Ready for the Gold/Energy Short

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So, I wonder what cuteness the Feds are going to pull this weekend? Use taxpayer dollars to bail out Lehman? Send everyone a $2,000 check they can spend at WalMart? Cut interest rates to 0%? Make short-selling illegal? You just never know.

Everything is waiting to see what happens to LEH, of course. With only 365 cents left to its share price, there's not much left to fall.

This last posting of the week is going to be somewhat different – – I'm not going to provide any opinion on the broad market. Instead, I'm going to offer a "theme" to invest. Specifically – – re-entering short positions on the energy/gold sector (I think of them as one sector these days, strange as that may sound). My narrative is pretty simple. I think the EUR/USD, which has been firming up, won't get much past the ~1.43 level, tinted below.

Here's a closer look. As you can see, the retracement level is just about at 1.435.

Simultaneously, I think OIH (which has firmed up most of this week) also won't be able to get past about 170 (I don't rule out that it won't get much farther at all; I simply think all this stuff has a bit further to climb).

And, finally, gold/silver (as I measure via the $XAU index) won't get past the mid-130s (thanks, by the way, to giggity for the PAAS suggestion since I expressed an interest in going long silver; it was up nearly 10% today).

Having said all that, I think there are a bevy of short/put-buying opportunities. Some of these I've already entered; some I plan to enter next week. Here are some favorites:

And I'll close this week out with a bizarre 4+ minutes with Bill Gates and Jerry Seinfeld, which was just released this week. Actually, I think it's pretty funny. Adios!

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