Wednesday, March 3, 2010

Screen Shot of the Day

This was the featured advertisement on the bloomberg.com homepage:



The ad links to a video, and I'm not going to argue with the ultimate point the guy is making, in fact, back in my day I've said things very similar.

But an ad like this on the bloomberg homepage? I mean it doesn't pay to go around looking for contrary indicators, in fact that is the most important part of the art of contrary indicators -- don't look for them, but when they stick it in your face like this, man it's hard not to be a bear, not forever, but at least till this sentimentality wears off.

The fact of the matter is that the overall momentum in gold has been decelerating ever since 2006, as evidenced by the declining peaks in the Consolidated Rate of Change (CROC) indicator:



Or, if you prefer, you can view a regular ROC, like the 465 day:



Now at some point, a languishing ROC can become a bullish indicator, but it's really debatable whether we have arrived at that point yet.