Random Thoughts: Is Gold a Leading Indicator of Equities?

By Todd Harrison  JUN 28, 2013 10:05 AM

Weighing in on quarter-end, the stock market, and Apple Inc.

 


Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

The final fifth of our five-session set is upon us and not a moment too soon!  This was a long week on Tuesday, much less Friday, and with quarter-end on tap and the holiday stretch ahead, financial folks are looking forward to the requisite respite. 

I, for one, think the tape has the potential to be extremely volatile next week (global crosscurrents + thin markets = outsized moves), but we'll cross that bridge when we get to it.

First things first, some top-line thoughts in no particular order:
And Finally, a Minyanville Mailbag: The Other Side of Gold

Minyanville reader Ken writes:

Please listen to the Kyle Bass video.

He told the University of Texas to take the 1 billion for delivery and there was only 1.7 billion left to deliver of the 80 billion.  Why does this story only get told on Gold Bug sites that have little credibility? Your Gold Scold was dead on but I think this also needs some light...no?

Ken,

There are always two sides to every trade; I have no horse in this race.  I made my trades in the yellow metal, left the party too early, and have largely been a spectator since.  Kyle Bass is scary smart and I have much respect for him.  I also 'see' that gold is up from $300ish in the early '90s, and it hasn't rallied with $10 trillion of liquidity pumped into the system (quite the opposite), so I respect that as well.

We could—indeed should—see a nice snapback rally next week as fund managers take a shot on the extremely oversold metal once the quarter-end purge is over.  I'm not there—I think longer-term it works lower still—but it could help shape sentiment, so I'm watching it. All for what it's worth; we certainly don't take pleasure in other people's pain, and I hope this finds you well.

Todd


R.P.

Twitter: @todd_harrison

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Position in SPY.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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