More on the dollar

Here Peter Schiff and Stephen Moore are interviewed about the recent congressional approval of the mortgage bailout bill. Although Glenn can be a little too radical for me when it comes to foreign policy issues, he usually does a good job bringing up problems with our economy. Few journalists expose our economic policies like he does. This is one of the biggest issues of the year in my opinion. Our governments socialization of private losses is bankrupting our country (along with the prior deficit spending).

Despite the short run strength in the dollar, the long-term trend is still down. I’ll be watching the dollar very closly next week as we have the Fed meeting as well as announcements by the ECB and BOE. I’m not anticipating a rate cut anytime soon.

2007 GDP revision

So now we have proof of how the financial news networks try to spin the data. Or I mean how the government manipulates the data to begin with in order to make the average investor believe we are in a slowdown rather than in the beginning of a long-term recession.

July 31 (Bloomberg) — The U.S. economy shrank at the end of 2007 and grew less than forecast in this year’s second quarter, signaling that the country is in worse shape than investors had anticipated.

Now, I don’t like focusing on stupid technicalities such as what is a recession and what’s a slowdown because we live in this country, we know things are bad. The government under reports inflation, which gives them the ability to manipulate GDP. If we used actual inflation figures rather than government figures it would be evident that we were in recession months ago.

Unemployment data comes out tomorrow meaning we will have bad news again. The dollar has been very resilient throughout the week so I’m expecting some weakening with the bad jobs number. I expect another big move in gold tomorrow.

Mid-day update

With the metals markets coming down after this mornings rally we don’t see the big gains in the miners that I initially expected. Still seeing slight gains in HL any AUY but very mixed across the board with the miners. I’m sticking with this play as I think most of the commodities are entering the next possible up leg.

Here are some key levels on HL. If we can get a late day rally above the 9.45 level I will be very bullish for tomorrow to possibly get up near the $10 level. Despite 6 up days in a row, they have all been small moves so we are no where near overbought.

Rally in gold imminent

Well unfortunately I did not post this chart last night or earlier this morning. Anyone who trades gold could have spotted the powerful bounce yesterday off the august trend line, so my analysis here is not so critical. The miners in the ^hui also showed great resilience with a powerful rally from the morning lows. This signals a turning point for this sector, which has been very badly beaten over the last month.

This is a very similar consolidation pattern to last summer. The breakout coming after a final retest of the summer lows. I’m currently holding Hecla mining(hl), and yamana gold (auy) with positions in the mid 8’s and low 14’s respectively.

I’ll be watching resistance at 10 on hecla. We tested this level in two weak rallies, by the third we should break through.

Welcome investors, young and old!!

When I named this blog The Active Young Investor I was not intending on using this title to refer to myself or readers. I happen to be a young investor. You may happen to be 18 years old just learning the ropes, or a 52 year old getting a late start on their retirement account. I’d like to welcome all investors to this blog regardless of investment experience. I hope my insights can prove valuable in some way.

One of my intentions with this blog is fairly selfish. I simply want to log all my trades so that I can learn from past mistakes as well as understand the rational behind profitable trades. That doesn’t mean that you cannot benefit from being here. Trading is very risky; trading alone is potentially more risky. So let’s talk and work together for all our benefit.

I’ve spent a great deal of my investment career following the commodities markets and main indexes. You will find that a lot of my discussion may revolve around the same industries simply because that is what I trade. Discussion will include fundamental analysis, technical analysis, as well as macroeconomic commentary.

Even though I’d consider my past investment results excellent, I do not wish to be the ultimate authority on anyone’s personal investments. My ideas are simply that, ideas. I want this to be a place where investors share insights on the financial markets, not a place for hot stock tips. Please consult with your own professional investment adviser before taking any action.